The Internal Revenue Service randomly selects a business for an audit with no set pattern of timing or location. Usually your business will be audited where your financial records are located to ensure access to all the books. It can also take place at another location as long as you bring all your records and books. There are times that taxpayers will ask that audit be conducted at the Internal Revenue Service office so that they have a limited access to the records. It’s always prudent to get advice from a tax professional on making these choices.
By law, the Internal Revenue Service auditor must perform the audit where the business is located. If you are in disagreement regarding the location, you can ask for another venue. However, you must be certain to bring all records to be made available to the Internal Revenue Service auditor. Forgetting something can cause delays and trigger suspicion. If the audit is going to help your business, you must allow the auditor access to your facility and you must be present to answer the auditor’s questions.
If you request another location to do the IRS business audit, you must have an adequate reason. Two examples are:
• Protecting the image of the business
• Avoiding interruption of the flow of your business
Most importantly, just because you are being audited does not give the auditor the right to interview your employees or observe how your business runs.