More IRS Audits Coming ...
According The CPA Practice Advisor, the IRS plans to increase their audits of small businesses by 50 percent. That is a lot!!
So what should you do now?
Well, if the increased audits begin in 2021, there is not a lot you can do because those will be audits of 2017 to 2019 tax returns ... those already filed.
IRS has three years from the due date, including extensions, to audit. For instance, a 2017 Form 1040 with a Schedule C business is due on October 15, 2018, so the last date to audit - except if fraud is suspected - is October 15, 2021.
Know you have errors or expense items for which you do not have proper substantiation?
Take a look at the IRS website for statistics on tax returns filed by businesses at: https://www.irs.gov/statistics/soi-tax-stats-business-tax-statistics
Evaluate if you fall within the parameters indicated by IRS statistics. Even if you do, and you know you have unreported income or over-reported expenses, consider amending those returns. Contrary to popular opinion, amending a return is NOT an audit trigger.
Lastly, file an accurate return for 2020 and beyond ... you'll sleep better for it. And if you need help, contact a local CPA for assistance, the earlier the better!!