Did you know the IRS can request your QuickBooks file?

Last year the IRS purchased dozens of QuickBooks licenses for use with tax audits of small businesses. They can now request a copy of a business’ QB company data file as part of their discovery during an audit. What does that mean to a business owner? Well, the IRS can say that they want to audit the last tax report you filed but if they have your QB data they will actually have access to look at all your accounting transactions for any period they please.

So what are your options if the tax man asks for your QB file so he can perform an audit on your 2009 tax return. Your best option is to contact a local Certified QuickBooks ProAdvisor who has licensed copies of tools which allow only the relevant part of your QB Company data to be exported and imported to a new file and that new file is given to the IRS agent.

The process for that would simply be:

• Create a new, empty QB Company file
• Use a tool which sets the Balance Sheet accounts to the 12/31/2008 ending balances
• Use a tool which can export 2009 transactions from the live QB data
• Import those transactions to the new QB Company file.
• Make a copy of the new QB Company file for the Tax agent

By doing this the tax agent can only see activity for the year in question and not go on a fishing expedition to find anything in periods outside the period in question.

A Certified QB ProAdvisor should be able to do that task for a fee ranging from $750 to $1,000. It will likely be necessary to upgrade your QB to the latest version if you are not current.

If this situation arises I would be happy to assist. Click the “Contact Rick” tab or call 404-787-5835.


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