More Facts Resolve Tax Risks -
Executive Summary -
TAXPAYERS NEED TO be in possession of the facts surrounding any transaction that a business is entering into. If the facts are not readily available, go and find them! It is no misconception that the nature of transactions varies considerably from the time of inception until they are signed off and finalized. The opinion that is often obtained at the inception stage should always be used as a guiding factor. However, due to the intricacies of many transactions, the opinion obtained may only be relevant in part with respect to the end result. Taking this into consideration it is imperative to conduct a post legal and tax audit. This is primarily for the organization to take it upon itself to determine whether the opinions set out in the initial documentation still stand in the final drafts. Experts should be brought in at the beginning, middle, and end of such transactions.
All your bases must be covered in order to explain, should you have to, the nature of the transaction in the years to come. It is no mystery that some transactions may be investigated five to ten years down the line. Record keeping can often make or break a taxpayer’s case when it comes to such investigations. This is why posttransaction audits must be carried out in order for you to track down and maintain records, thereby allowing you to be fully prepared should the IRS come knocking on a taxpayer’s door down the line.
For this series posted to date, please view TaxConnections Author “Daniel Erasmus”.