Audit Defense by Tri-Merit
Sometimes the best defense is a good offense.
While audits can’t always be avoided, they don’t have to be scary. With proper planning, a sound methodology, and an experienced team working on your behalf, you can feel confident and prepared to defend your position should an audit occur. Tax audit defense is included with every Tri-Merit study, so we will be by your side the entire way.
The Tri-Merit team combines a detailed understanding of the engineering-based tax credits you’re seeking with technical expertise that reaches beyond your financials. The goal is to get you the largest return possible without inflating or overestimating your credit simply for short-term gain.
Audit Defense by Tri-Merit
When the IRS comes knocking at your door, you have to be prepared to defend what’s written on your tax returns. An IRS audit examines your financial information to check if the reported amount of income, deductions, credits and resulting tax is correct. It may sound like a simple review, but an audit scrutinizes an engineering firm’s finances extensively to uncover mistakes. If it reveals that the firm has misreported its taxes, the taxpayer must pay any additional amount owed as well as interest and penalties in some cases.
An IRS audit doesn’t automatically mean a mistake was made; some taxpayers engaging in research and development activities with clean tax records still catch the eye of the IRS.
As such, the best way to avoid an audit (and the negative consequences that come with it) is an accurate, ironclad tax return. By reporting the proper figures, firms engaging in research and development reduce their chances of triggering an IRS audit. Moreover, if the business does get selected for an audit, the management doesn’t have to worry; they should possess all the documentation needed to substantiate the company’s claims.
Tri-Merit gives you the peace of mind that your tax records hold up against the most stringent IRS audits. With strict attention to detail and a firm grasp of qualified activities for engineering-based tax credits, our team will defend our work during an IRS audit.
The Odds of Getting an IRS Audit
While companies dread the possibility of an audit, the chances of undergoing one are low. In fact, in 2018, the IRS audited only 0.5% of the 196 million tax returns it received. As such, the odds of being selected for an IRS audit is less than 1 in 200.
It doesn’t mean, however, that taxpayers should be complacent. Certain characteristics make a business more likely to be audited than the rest. For instance, failing to report a part of its income may catch the attention of the IRS, so does claiming too many charitable donations. Reporting too many losses on Schedule C (if you or your client is self-employed) and deducting too many business expenses also raises the chances of triggering an audit.
So, to maintain clean records with the IRS, you need 1) accurate calculations for tax claims and deduction and 2) an ironclad defense should an audit occur.
Tri-Merit provides these with every service.
Tri-Merit Minimizes Your Risk
If you obtain services from Tri-Merit (engineering R&D tax credit, cost segregation, etc.), you will receive audit defense services in case of an IRS audit. We’ll pool the resources needed to substantiate your claims and deductions.
Should an audit occur, our team helps you:
- Respond to audit notices
- Prepare a detailed report on IRS documents
- Prepare witnesses for interviews or testimonials
- Defend yourself during audit hearings or meetings with auditors
To learn more about our audit defense strategies for engineering firms, get in touch with our team.
With Tri-Merit, you will avoid:
Unnecessarily High Fees
Losing Great Clients
Lack of Responsiveness
Dissatisfied Clients
Poor Audit Results
Inefficient Processes
You deserve an R&D Tax Credit & Cost Segregation Partner You Trust.
Tri-Merit produces highly successful and sustainable results to reduce your risk of audit.
From the beginning of your engagement with Tri-Merit, you’ll feel confident that our team is working on your behalf to ensure:
- proper processes are followed
- IRS guidelines are met
- all reports and documentation are clear, concise and meticulously detailed to substantiate every claim
If you’re taking an incentive for the first time on a timely filed return, your odds of being audited are really no higher than if you weren’t taking the incentive. However, if you’re amending returns to claim credits that you didn’t previously realize you qualified for, you can expect the audit rate to go up. This is logical as you are essentially writing a letter to the Treasury asking for a refund.
By developing a sound methodology for calculating a credit and putting in place strategies to ensure the information and documentation gathered improves over time, you dramatically improve your ability to successfully deal with an audit should it occur.
Sound methodology and the right team positions you to handle the audit process.
Should an audit occur, Tri-Merit will do what it takes—at no additional cost to you—to defend your tax credit claim and dramatically improve the odds of retaining the savings your company deserves.