Middle market companies may see themselves as somewhat shielded from an IRS audit since the historical audit percentage is about 11.9%. After all, bigger companies have more at stake, right? Well, the answer is increasingly – “wrong.” The spotlight is on middle market companies due to the growth in jobs and revenues they add to the economy. And the IRS is shifting its focus as well to the middle market, with the understanding that such companies have the same or additional issues as larger companies.
Middle market is loosely defined as companies between $10 million and $1 billion in revenues. Companies in this broad middle category need to be aware of the potential for an audit and be prepared with accurate, organized records. If your company is audited, you can expect scrutiny on each line of your tax return, source documents and all records related to your return. Business owners and CFOs rarely have the extra time in their day to step outside of what it takes to run and grow a business. So, an audit is seen as a significant interruption, as well as an unanticipated expense for proper representation with the IRS.
The good news is that most audit issues can be handled and resolved at the IRS agent level. But even at the agent level, if audited, you’ll need representation to handle correspondence, proper organizing of records, meetings with the IRS and researching and reviewing all the documents. Salmon Sims Thomas is well versed in these issues. Please contact us if we can help.