Updated July 24, 2015
Why Was I Chosen For Audit Chicago Illinois?
This is always the first question that clients ask. If you ask a Revenue Auditor, they will generally say that they don’t know, and were just assigned to complete the examination.
At the end of the day, it really doesn’t matter because no matter why you were selected, we’ve still got to get you through the audit.
From experience, I know that “just because” isn’t a good enough reason for the pain and agony that you are about to go through so here are five of the most commonly occurring reasons why businesses are selected for audit.
- You were reported
Someone called the anonymous “800 Number”, and reported you as being someone who is breaking the law.
- Your returns were completed incorrectly
Remember that both your sales tax returns and your Illinois income tax returns go to the same agency. The years sales tax returns, which would report total receipts on a cash basis, and your Illinois Corporate Income Tax return, which also reports your sales on either a cash or accrual basis should either match, or the difference should be easily explainable. If there is a large, material difference, you might be selected for audit.
- One of your vendors was audited
This is a phenomenon called Crabbing, a reference to the fact that crabs only walk sideways. The assumption is that birds of a feather flock together. If one of your vendors was audited and was dirty, many times they might go to the largest customers of the vendor and audit them. This happens a lot when a customer who has never filed a sales tax return in their life, gets an audit notice.
- Your industry has been targeted
If traditionally your industry has not collected and remitted sales tax, and the tax laws have changed, or it has been determined that many of the people in your industry do not follow the sales and use tax laws, then you might be audited.
- Your accounting firm was targeted
The firm that prepared your return could have been targeted as a questionable preparer, if they got caught helping others cheat on their taxes. In this instance, usually the taxation service will audit the rest of their customers to clean up the situation. You could be caught in a real mess.< If you are having problems with your Why Was I Chosen For Audit Chicago Illinois? or have issues with your accounting in general, we would love to help. I enjoy hearing from my readers, and can be contacted at Chris@AccountingSolutionsltd.com Additional Accounting Articles and information on my firm can be found at www.AccountingSolutionsLtd.com Chris Amundson is the President of Accounting Solutions Ltd., a full service public accounting firm of Certified Public Accountants and Enrolled Agents handling the bookkeeping, accounting, tax preparation, and audit representation needs of Businesses, Estates, Trusts, and Upper Income Individuals