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IRS Business Tax Audits: What Business Owners in Boston Need to Know in 2024

Offshore Account Update

Posted on March 15, 2024 |

The Internal Revenue Service (IRS) has additional resources at its disposal in 2024, and it is using these resources to ramp up its enforcement efforts. The IRS has specifically signaled its intent to target businesses and their owners, placing particular emphasis on improper business deductions, payroll-related tax violations, Employee Retention Credit (ERC) fraud, and other fraudulent business tax practices. For businesses targeted in IRS tax audits, an informed and strategic approach is critical. This starts with engaging an experienced Boston business tax attorney to work with the IRS on your business’s behalf.

3 Key Insights for Boston Business Owners Facing IRS Tax Audits in 2024

What do you need to know if the IRS is auditing your business in 2024? Here are three key insights from Boston business tax attorney Kevin E. Thorn, Managing Partner of Thorn Law Group:

1. IRS Business Tax Audits Can Be Invasive

The first thing you need to know is that IRS audits can be extremely invasive. When auditing businesses, the IRS has the authority to request numerous types or records dating back several years. The types of records that your business may be required to disclose during an audit include (but are not limited to):

  • Account statements
  • Invoices and receipts
  • Canceled checks
  • Corporate financial records
  • Employment records
  • Legal documents
  • Loan agreements
  • Insurance documents
  • Schedule K-1 and supporting documentation
  • Other documentation that substantiates claimed business expenses and deductions

Failing to comply with a valid request for documents during an IRS audit can lead to a presumption of noncompliance. If failure to comply gives the IRS reason to suspect intentional tax evasion or tax fraud, it could also trigger a criminal tax investigation.

2. It Is Important to Understand Why Your Business is Being Audited

The IRS audits businesses for several reasons. While some IRS business tax audits are random, many are triggered by specific events or concerns. If the IRS is examining your business’s records for a particular reason, understanding this reason will be important for assessing your business’s risk (and your personal risk) in the audit.

3. Knowing What (if Anything) Revenue Agents Are Going to Find is Critical for Executing an Effective Defense Strategy

Along with understanding the reason for the IRS’ audit, it is equally important to understand what (if anything) revenue agents are going to find. Can your business use the documentation it has on-hand to demonstrate full compliance with the Internal Revenue Code? Or, are revenue agents likely to find information that warrants the imposition of liability for back taxes, interest and penalties? These are very different circumstances that call for very different defense strategies.

Request a Confidential Consultation with Boston Business Tax Attorney Kevin E. Thorn

If you are preparing for an IRS business tax audit in Boston, we encourage you to contact us promptly for more information. To request a confidential consultation with Boston business tax attorney Kevin E. Thorn, Managing Partner of Thorn Law Group, please call 617-692-2989 or send us a message online today.

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