What factors trigger a business audit?

There are two basic ways the IRS chooses a Form 941 Employment tax return to audit: 1. A computer program detects a return that has incorrect amounts or 2. Information from compliance projects (news media, public records, etc.) suggests the return may have an incorrect amount.  In addition, late filed or unfiled returns and late or unpaid payroll tax deposits often trigger the RS to look at the late return plus others going back a year or two. You should know that, once the audit begins, the IRS may contact neighbors, banks, employees, independent contractors and others for information.  If you are audited, you need to gather all your records pertaining to payroll taxes for the period under audit, including proof of filing and paying.