Anyone with a small business ever get audited by the state????

As long as you keep files and invoices and receipts you will be fine.

Most of the time they are looking for things like mis-classified equipment or failure to pay E-tax if your buying parts of the internet. They will find something you/your accountant messed up and you will be asked to pay.

If you have the paperwork in hand then you don't need your accountant. I had an audit after being in business for 10 years the audit was 4 years ago and they spent 2 days here. I did my thing while they looked over all the paperwork.

In the end they got me on e-taxes, back taxes on a 20 yr old bobcat that I hadn't used on a job in 2 years and some office equipment I hadn't claimed. No biggie. $1200 bucks and I haven't heard back. They did inform me that I had been paying to much tax on certain jobs and they were able to "retire" my bobcat so I don't have to pay tax on it anymore....so they aren't all bad.

That being said, if you don't have a good paperwork system or computer programs that you use for your business then it could get ugly. Be calm and just try to give them whatever they ask for. Don't be defensive if they ask questions and if you have done something wrong just face up and they will not harm you.

Remember that you make them money so they don't want you to be out of business.....they just want their share and then some.

Good luck.