Thing To Know If Your Practice Gets An Audit
The term or the word “audit” never fails to rattle many practices as it comes randomly. Be it a physician, a dentist, an organization or a company, and even business people, they all ask the same question. They have the same concern – what to do if your practice gets an audit?
For any practice, being audited is almost unavoidable. Many ways are being audited all the time, though many methods do well. Still, some medical practitioners haven’t yet to experience being audited.
An audit is imperative to all practices, even amid the global pandemic we’re facing today. As companies and preparations have begun operating after the initial lockdown, auditor practitioners have also started working. Maintaining audit quality has been an auditors’ most important job and goal during the pandemic.
An audit is an official and thorough inspection of any individual or organization’s financial statements, tax documentation and reports, books, and a lot more. It is done for three reasons:
- To determine the accuracy of your office’s document and tax reports.
- To measure the quality and the legitimacy of your practice.
- To ensure compliance with standards and requirements.
There is no sure way to prevent getting audited, but here are simple ways that you can put into place to lessen the chance of your office having to submit to an audit, and what to do if your practice gets an audit or when your office receives an audit request:
Try to calm down
In the event you receive a request for an audit, the first rule is not to panic. Panicking won’t get you anywhere. Receiving an audit request is indeed stressful and sometimes scary, but if your office complies properly and your documents are accurate, you don’t have anything to worry about.
Double-check and examine the audit notice or letter carefully
Determine why you’re being audited. Read the notice or the letter prudently and wisely. There could be many audit triggers; try to go through it and analyze the audit’s reason.
IRS audit letters provide a preview of why your practice is chosen for an audit; it also usually includes the allotted time on how long you need to respond.
Respond to IRS request immediately
Do not delay; respond as soon and as quickly as you can. Everyone chosen for an audit must provide a written response or respond with a phone call to audit findings within 30 days. You could be penalized and spend massively and unnecessarily if you try to ignore it and make it any longer.
Make sure you respond concisely and clearly to the audit report to avoid facing additional problems.
Prepare the needed documents
The auditing team will advise you exactly what documents and records you need to prepare and provide.
When you gather your documents, organize them by year and present what is only asked and relevant.
Here are examples of records IRS might request:
- Legal papers
- Canceled checks
- Loan agreements
- Medical and Dental Records
- Theft or loss of documents
Submit your documents on time
Be cooperative and follow the IRS guidelines; submit your document on or before the scheduled date of submission. Missing your deadline will make things unfriendly for you and your practice, resulting in hefty fines.
Bring a lawyer or CPA to assist you
There’s nothing wrong with bringing a trained agent or professional to represent you, help you walk through with what’s happening, and help you understand unfamiliar terms and issues.
If your practice is facing an audit or facing counts of criminal charges, it is just right to hire a professional tax lawyer to represent you before the IRS and tax professionals.
Be responsible and pay your penalties
You have no choice but to pay immediately what you owe if you want to avoid additional payment for interests and penalties.
But if you don’t have available money, you can arrange a monthly payment plan with the IRS or request an extension. The IRS offers arrangements that may help you settle your payment.
The best way to avoid a possible audit is to secure your documentation and records. Keep and organize all necessary, relevant, and detailed descriptions of your office; it can go a long way toward preventing your practice from facing future audits.
Whether you and your office are being audited or would like to look into practical measures on what to do if your practice gets audited, we hope this article has helped you.
If you want more tips other than this, discover the secrets of scaling your own practice here on our free 43-page report. Learn and know how to earn more.