Avoid Common Mistakes for Your IRS Document Submission
Getting your business ready to sell can seem daunting. The many steps to selling your business can be long and tedious, and chief amongst those steps in terms of length and tedium is due diligence. We discuss the many complexities of due diligence and getting your business in order in this article here.
One item that may be overlooked by the seller, is their tax returns. Having your tax returns unfinished or not filed to the IRS at the specified tax deadline, can cause big delays when you go to sell your business. Here are a few tips to make sure you’re in good graces with the IRS:
Try to file electronically. The IRS has processed more than 1.2 billion e-filed individual tax returns since the program began according to the IRS. It’s a faster and more accurate than filing a paper return with typical IRS-issued refunds within 21 days give or take.
Sign the return. Because a signature is a necessary element of a valid return, any return received by the IRS that is not signed by the taxpayer is an invalid return and cannot be processed. This causes delays and the return must be resubmitted and could cause late fees.
Avoid making changes to filing status for the upcoming year until proof is obtained that the prior year has been processed. Amended returns also go through a screening process and the amended return may be selected for audit.
Verify that the tax returns have been processed into the IRS system and that tax transcripts are available.
A little follow up with your accountant and/or the IRS prior to putting your business up for sale, may go a long way during the closing process. If you have questions, please speak to your tax representative or contact us for assistance.