Our Sole Proprietor service provides an exceptional audit report involving IRS examinations of small businesses. The typical client generally involves a service business that is a sole proprietorship (not a separate business entity) that is reported on the owner’s personal tax return as a Schedule C. These Schedule C businesses would not include LLCs that are disregarded entities because there is only one LLC member. The business will have fewer records and sales generally of $1M or less. Businesses that are formed as corporations or partnerships will have more complex tax returns and involve more complex issues that require additional analysis and different legal issues.
Our most popular service is intended for mid-size businesses formed as corporations or partnerships (i.e. LLCs, LLPs, General Partnerships, etc.) with gross revenue greater than $1M. These companies will generally have more transactions and bank accounts and more employees working for the business.
This service offers a more extensive review of both a company’s tax return and supporting financial documents and records to substantiate the amounts reported as income and deductions on a business return. Having the benefit of reviewing a company’s financials and documents provide more details about the type of transaction and how the business transactions were reported. For instance, an expense incurred to purchase parts could be misclassified as “supplies” and may be required to be reported as “Cost of Goods Sold.” Reviewing the company’s financials and supporting documents may provide additional details.
Clients who purchase this service will speak with an experienced tax professional who will review the details of their Audit Report and answer questions.
The Premium service offers additional services beyond the standard Corporate or Partnership service that includes many tools and benefits to advise business owners of potential risks, which include:
One additional 60-minute conversation with a tax professional to discuss the Audit Report, review questions, and further strategize.
Increasing the quantity of business records analyzed to 150 pages.
Performing a benchmark study of the client’s business income tax return to provide insightful analysis comparing the client’s return with similar businesses in the same industry.
Our benchmark analysis provides incredible insight to compare a client’s business return with similar businesses in the same industry. The benchmark study can identify additional issues to explore that may be high-risk items flagged by IRS during the audit. For instance, a review of a client’s income tax return for a manufacturing company reveals a high dollar amount deducted Cost of Goods Sold compared to the company’s yearly gross sales and compared to its competitors. The benchmark study reveals the client may have improperly overstated the cost of inventory sold by deducting all inventory purchased in a given year.