SOURCE: National Association for the Self-Employed (NASE)

National Association for the Self-Employed (NASE)

February 17, 2010 15:24 ET

How to Prepare Your Micro-Business for Future Audits

NASE National Tax Advisor Says 'Don't Panic'

WASHINGTON, DC--(Marketwire - February 17, 2010) - Since last November, the Internal Revenue Service (IRS) has undertaken a three-year campaign to review the tax records of nearly 6,000 randomly chosen businesses as part of their National Research Program. The goal is to figure out which areas of the tax code lead to greater noncompliance. The data collected is intended to help the IRS minimize the tax gap, or the amount the agency is owed versus the amount it collects each year.

The National Association for the Self-Employed (NASE) knows that many self-employed business owners meet their tax obligations fully, so the audit process need not be feared. For this particular round of IRS audits, business owners will be asked to provide documentation from three years prior. The focus will be in four areas, including worker classification, fringe benefits, reimbursed expenses and compensation of the business owner.

"The first thing I tell business owners is not to panic if they are facing an audit," says NASE National Tax Advisor, Keith Hall. "As long as you have adequate records and are organized, then it is a relatively simple process. You may even get an additional refund."

Preparing taxes that will sail through the audit process is as easy as following the Three Cs of Tax Preparation:

1.  Careful recordkeeping - Keep good records and notes to support each
    number on the return. Take the time to do this now, since the
    information submitted will not likely be reviewed until years later.
    You do not want to be stuck figuring out what was on line 21 of a
    past tax return from that long ago.
2.  Check the math - There are many good software packages designed to
    help you correct easy mistakes and reduce headaches in the long run,
    such as TurboTax, TaxCut or even the IRS online filing options.
3.  Consider a professional review - Multiple sets of eyes are better than
    one. It can be worth your time to have a tax professional review the
    return. Even if he or she does not prepare it from start to finish, a
    simple review of the work you have done is always helpful. This is
    especially true if you have a new issue this year, such as your first
    year of self employment, or hiring a new employee.

The NASE offers numerous tax tools and other tips to help you get through current and future tax season. For help organizing your taxes, visit the NASE's Tax Resource Center or ask our TaxTalk CPAs a question.

About the NASE

The National Association for the Self-Employed (NASE) is the nation's leading resource for the self-employed and micro-businesses, bringing a broad range of benefits to help entrepreneurs succeed and to drive the continued growth of this vital segment of the American economy. The NASE is a 501(c) (6) non-profit organization and provides big-business advantages to hundreds of thousands of micro-businesses across the United States. For more information, visit the association's web site at

Contact Information

  • For Immediate Release
    Kristin Oberlander
    (202) 466-2100
    Email Contact


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