3 Records That Retailers in Bradenton Should Keep in Case of an Audit
Type “IRS Audit” into Google, and one of the top results is, “how bad is an IRS audit?” In other words, no one wants to get audited by the IRS. But if your business has to face an audit, you need to prepare as much as possible. You’ll need to have all the proper documents to satisfy the audit process and have them organized to keep the ordeal as short as possible.
What The IRS Expects
For retailers, the IRS will be looking for three types of records:
Keep accurate journals of cash transactions, non-cash transactions, all invoices, sales slips, ledgers containing these journals一everything that proves your business’s income.
All documentation of purchases, including inventory and raw materials, the purposes of every purchase, any tax-exempt purchases, purchases subject to taxes, and proof that all taxes you’ve paid.
Point of Sale (POS)
Records of all items sold, sale dates, prices, taxes charged, payment methods, vendor names, invoices, and any purchase orders or POS ID numbers.
How Long to Keep Records
The IRS can request documents up to three years old during an audit. In some cases, they can request records that are six years old. You’ll need to keep all forms showing any wages or income, including interest, dividends, and capital gains or losses, such as W-2’s or 1099’s.
Any documentation regarding health insurance (or lack thereof) such as 1095’s needs to be on hand. Receipts for charitable giving and expense records should also be in your files.
Documents you should keep for more than three years include purchase records of stocks (inherited or otherwise), investments, and mutual funds. Also, keep records that show taxable gain or loss and reinvested dividends.
The Right Attitude
How you act during your audit matters. You might experience the audit in person, in which case you need to be on your best behavior! Be honest, be courteous, and double-check your math ahead of time. The IRS auditor is also obligated to abide by your basic rights during an audit, which includes professional and respectful behavior to you and your staff, maintaining privacy and confidentiality in the audit process. You also have the option to request further review or mediation if you disagree with the audit findings.
Safe Destruction of Documents with ShredQuick
When you breathe a sigh of relief after your audit, perhaps it will be time to destroy some of the documents, whether due to regulations or as a matter of course. You don’t want that information to fall into the wrong hands! ShredQuick will come on-site with one of our mobile shredders and ensure the complete elimination of your documents. Once we’re finished, we’ll hand you a Certificate of Destruction. Here’s hoping you won’t need it in a future audit, but it’s good to prepare!
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