If you're a Quick Books user, you may have good reason to be concerned when it comes to the IRS. Within the last two years, IRS has promised to audit substantially more taxpayers that report income as sole-proprietors (using Schedule C) than it ever has before. Taxpayers that report more than $100,000 of revenue are the prime targets of the increased audit efforts. The prevailing justification is, at least statistically, that this type of taxpayer is more like to under-report income and over-report expenses. If you have a business with this level of revenue, you're probably a Quick Books user or, at the very least, have a bookkeeper that uses this popular program. So, what's the big deal about? The IRS now has a new power. When you are selected for an audit, IRS can compel you to provide a back-up file of your data. With their own Quickbooks license, they have a "full-access back stage" pass to all your transactions, past and present. Imagine that. Giving an IRS auditor the privilege to look at any transaction is scary at best.
What's the best defense? It's simple. Maintain good clean data. Our QuickBooks Pro Advisor, Joy Peterson, is available to help you maintain a clean, high-quality set of accounting records. Joy can be contacted at 207.990.3127.
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