There is no guarantee that you will not be audited by the Virgin Islands Bureau of Internal Revenue (BIR), but there are four (4) simple steps that you can take to minimize your chances of being audited and, if you are audited, to minimize your chances of having to pay additional taxes, penalties and interest.
- The first rule of keeping the BIR auditors at bay is to maintain good records. Many audits are by correspondence and if you quickly produce records to substantiate your deductions, you most probably will not be transferred to a live audit;
- File all documents personally with the BIR in order to get a date stamped copy of the original filing. If you are not in the Territory, then identify someone that can submit the filing and obtain an date staemped copy for you. BoltNagi routinely does this for its tax clients;
- Secondly, keep and report all Form 1099’s provided in your tax return, whether for income or for deductions, e.g. mortgage interest; and
- Finally maintain all buisness and personal records and transactions separately. Mixing your peronal finances with your business inceme and expense is the quickest way to lose an audit challenge.
The attorneys in the Corporate, Tax and Estate Planning Practice Group welcome the opportunity to meet with you to discuss your tax concerns. Tom Bolt can be reached at (340) 774-2944. BoltNagi PC is a full service business law firm.