Fergus Cleaver: Small Businesses Can Take Action to Avoid Tax Audits

NEW YORK, NY, August 20, 2012

For most taxpayers, the prospect of an audit from the IRD is supremely daunting. When tax season rolls around once a year, most individuals try to do everything in their power to ensure accurate tax returns, if for no other reason than to avoid the inconvenience and potential consequences of an audit. According to a recent Fox report, however, tax season is not the only time of year when the prospect of an audit should motivate sound financial behavior. For small businesses, in particular, audits can happen any time, at any point throughout the year. Fox has shared some tips for small business owners seeking to avoid trouble with the IRD; meanwhile, New Zealand business accountant Fergus Cleaver has responded with some tips of his own, geared toward small business owners in his own country.

Fox notes that the best way for small business owners to ensure full IRD compliance is to maintain built-in accountability as they file and document their financial records. In particular, Fox says that either a professional accounting service or a tax software suite can help small business owners maintain full legality.

The same report goes on to suggest that small business owners should make certain to report their full income. While some well-intentioned companies report only their net income, the article says, proper tax returns will list the gross income, ensuring the most accurate income appraisal.

Fox's tips for avoiding IRD audits has warranted a response from small business accountant Fergus Cleaver. In a new statement to the press, Cleaver says that many of the same principles that U.S. business owners should follow are also applicable in New Zealand. In his new press statement, Fergus Cleaver makes recommendations for how New Zealand business owners might protect themselves from the possibility of an IRD audit.

"Taking a proactive upfront approach with the IRD gives a business greater certainty, which can lead to better planning," says Fergus Cleaver, in his statement. "Audits I have dealt with have lasted up to two years before getting to a definitive result. This usually causes huge personal strain on top of increased consultancy fees."

Cleaver goes on to offer his bottom-line advice for New Zealand's small business owners: "Having your affairs in order will ensure you can respond to a Risk Review letter (which usually goes out before an audit commences) with accuracy and confidence. If the response is adequate, no formal audit will ensue."

Fergus Cleaver serves as the Senior Accountant for Cleaver Richards, a firm based in the Auckland area.

ABOUT:

Fergus Cleaver is an accountant based in Auckland, New Zealand. Known for his service to both business and individual clients, he serves as the Senior Accountant at Cleaver Richards. At this firm, Fergus Cleaver assists in providing business and personal services, as well as tax guidance. An established professional within the financial industry, Fergus Cleaver understands the importance of personalized service and the fact that every client has unique financial goals and needs.

Website: http://ferguscleaver.org/