There’s nothing like an IRS audit to rattle the nerves of even the most honest small business owner. Losing a payroll tax audit can be financially devastating for a business. Not only are there taxes, but in most cases the IRS will impose penalties and seek to collect interest. And from misclassifying independent contractors to simple book keeping errors, there are many pitfalls for businesses when it comes to payroll tax.
In this nuts & bolts series Sam Brotman walks you through how to handle a payroll tax audit, from the first meeting with the client to the meeting with the auditor. Sam will mainly cover analyzing the books for liability, how to engage the auditor, controlling the case, how to proceed after the initial phone call to the auditor, analyzing the client’s liability and the meeting with the auditor. Sam will also talk about establishing a system for the business, the payroll test, verifying independent contractors, analyzing the general ledger, reviewing the initial document request, handling 1099 workers, setting deadlines and the 12 factor EDD test.
Samuel D. Brotman is the founder of Brotman Law. His practice primarily centers on all aspects of tax litigation and criminal/civil tax controversies. Although a strong proponent of early stage tax resolution, Sam’s practice is uniquely tailored to assist clients in all phases of their tax controversy from administrative resolution of the lawsuit.