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

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swifter

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We just got a letter Friday that they want to do a audit from the state of Wisconsin and we are kind of freaking out,We run a very small H.V.A.C. business and pay all the necessary taxes that goes along with it BUT for some reason they want to audit us???? Any suggestions Thanks Steve
 
OMG! Its scary but don't panic, I owned a drywall construction company in Florida and Colorado for over 26 years and was audited 5 times in that time span. Each one was scary but as long as you are up to date on all your licenses, insurance and all taxes paid accurately to what you earned as the company you own and operate and be sure all your employees taxes were deducted and accounted for correctly, you have nothing to worry about. We got nailed for the taxes for an employee that hadn't filed his taxes for 5 years! They audited us because they claimed we didn't deduct the correct taxes for the employee, but after a few months of BS we got it all straightened out. Be sure you have all your records for the past 7 years because they can ask for them, receipts and anything else business related including your own income you claimed. Good luck and remember be prepared for the audit completely they hate when you are disorganized, trust me we weren't the best at that lol!! Remember these audits are "random" so I wouldn't sweat it.

Heres a good read and a video from IRS to help

http://www.inc.com/welcome.html?destination=http://www.inc.com/guides/2010/06/survive-tax-audit.html

http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/IRS-Audits
 
Thanks its all BS if you ask me,We are so small its ridicules,2 employee's fighting to keep the business afloat and now this--Steve
 
Do you happen to have an accountant? If you do, refer it all over to them.

If not, get all your papers in order. Taxes, expenses, payroll, inventory etc for the last 7 years. You want to be as prepared as possible to make their job as easy as possible.
 
I myself own a small Hvac company in NY. less than a year after becoming An LLC. they did a sales tax audit.
 
This administration hates small business. Good luck.
 
If you have been operating according to the rules it will be uncomfortable but a non issue. If not and they find something, you will have to pay the piper. (and keep looking over your shoulder for the next few years because they will be watching. As long as you don't post huge losses for years in a row you will be ok.tmm
 
They are NOT the IRS....just state sales tax auditors

I had a sales tax audit when I was in the motorcycle business....no biggie. Their job is to make sure you are collecting and remitting collected sales tax (ya know....to the boys at the Capitol)

they nailed me for not charging or paying sales tax for the soda pop in the pop machine....woooohooo....only took 4 days,,,,hope they got their moneys worth

If you are legit....it is no big deal. If not....hide the incriminating paperwork.

Several years later I sold the agent a used car.....really nice guy...they are just people doing a job.
 
Yes we have a accountant BUT-she just informed us that she charges $140/hr to help us with the audit.Yes we TRY to run the business by the book and honestly BUT the fricken book changes monthly here in Wisconsin.
 
140/hr is a lot of dough, but IMHO well worth not having the headache.

not to mention, you still need to run the business while all this is going on...
 
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.
 
Thank guys for the help, my wife called the guy today to make the appointment and she said he sounded like he was 12 yrs old, yes we use quick books accounting software for the business, its just the feeling like you automatically did something wrong that sucks.i dont buy anything on the internet for my business so thats not even a issue so we'll see as this progresses. THANKS AGAIN F.A.B.O. Members
 
I did the same thru an Ohio sales tax audit and an IRS audit.....just answered the questions and gave them any paperwork they wanted. I wasn't about to pay an accountant to do what I could do.

If you are not intentionally fooking them....don't sweat it.

Let the accountant answer for any of their foockups on THEIR dime.
 
swifter said:
Thank guys for the help, my wife called the guy today to make the appointment and she said he sounded like he was 12 yrs old, yes we use quick books accounting software for the business, its just the feeling like you automatically did something wrong that sucks.i dont buy anything on the internet for my business so thats not even a issue so we'll see as this progresses. THANKS AGAIN F.A.B.O. Members
Click to expand...


12 year old, eh??

Look out for Napoleon syndrome. They make try to make a name for themselves on your back cuz you're an "easy" target. DAMHIK.

IF you want to tackle it on your own; have your papers in order and make Napoleon crawl on his belly and eat some ****...:D

If not; have the accountant {as long as you trust them, ya know} handle it. Usually, accountants have insurance if they if they screw it up. (hence the 140/hr.)
 
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