How to Defend Yourself When Your QuickBooks Files Are Part of an Audit


How to Defend Yourself When Your QuickBooks Files Are Part of an Audit

The world of technology has changed just about every aspect of our lives. The tax and accounting world is no different. Thanks to online tax programs and software packages designed for accounting purposes, keeping a solid record of your important financial information has never been easier. However, the IRS is also aware of this and it too is getting its tech-groove on, so to speak.

QuickBooks Audit

According to several reports, the IRS has been busy training many of its agents on how to use QuickBooks, one of the most popular and commonly used accounting software packages. Why have they been doing this, you ask? It appears that the IRS is now including QuickBooks files as part of many of their audits. Can they do that? Unfortunately they can. However, there are some things you can do to protect and defend yourself against an IRS audit that includes your QuickBooks files.

Don’t Give Out Too Much Information

The first thing you need to remember is that you don’t need to hand over all of your information. Be sure to give them only what they ask for. In other words, if you have been using QuickBooks for several years, but the IRS has only asked you to include your records for a single year, then don’t offer up your files from any other year. Only give them exactly what they ask for.

Technical Help

If you have a good handle of QuickBooks then you can probably manage this yourself, but if you need a little help there are some online resources that you can use for a fee. It’s also important to remember to disable any online service connections you may have, like online banking.

Keep Your Files and Records Safe

You should never give the IRS agent the administrator password to your QuickBooks Files. You should create an external account user and give that information to the agent, instead. If the IRS agent asks for a hard copy of the information, never send it via email. Instead, make a copy on a DVD or CD and turn that over to the agent.

Other Tips

There are some other helpful tips to keep in mind in the event of an audit that includes your QuickBooks files. You can attempt to avoid handing over the entire QuickBooks data file and instead provide the requested info in Excel spreadsheets. If you refuse to give them the requested info in an alternate format, like a spreadsheet, the IRS may subpoena the entire data file. Another option is to ask your tax preparer to submit QuickBooks reports to the agent instead of the entire QuickBooks back-up file. One other pre-emptive move to make regarding your QuickBooks Files, in the event of an IRS audit: create regular back-ups so your data is consistently refreshed and saved.

Seek Professional Help

Any kind of IRS audit can be challenging, which is why it’s always a good idea to hire a tax professional to help you get through the process. Whether or not your QuickBooks files have been included in your audit, it’s a good idea to have experienced CPAs and tax advisors in your corner.


We hope you found this article about “How to Defend Yourself When Your QuickBooks Files Are Part of an Audit” helpful.  If you have questions or need expert tax or family office advice that’s refreshingly objective (we never sell investments), please contact us or visit our Family office page  or our website at  Unfortunately, we no longer give advice to other tax professionals gratis.

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Alan Olsen, CPA

Alan Olsen, is the Host of the American Dreams Show and the Managing Partner of  GROCO is a premier family office and tax advisory firm located in the San Francisco Bay area serving clients all over the world.


Alan L. Olsen, CPA, Wikipedia Bio is a proud sponsor of The American Dreams Show.



The American Dreams show was the brainchild of Alan Olsen, CPA, MBA. It was originally created to fill a specific need; often inexperienced entrepreneurs lacked basic information about raising capital and how to successfully start a business.

Alan sincerely wanted to respond to the many requests from aspiring entrepreneurs asking for the information and introductions they needed. But he had to find a way to help in which his venture capital clients and friends would not mind.

The American Dreams show became the solution, first as a radio show and now with YouTube videos as well. Always respectful of interview guest’s time, he’s able to give access to individuals information and inspiration previously inaccessible to the first-time entrepreneurs who need it most.

They can listen to venture capitalists and successful business people explain first-hand, how they got to where they are, how to start a company, how to overcome challenges, how they see the future evolving, opportunities, work-life balance and so much more..

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Creating purpose in life / Building a foundation for their life / Solving problems / Finding fulfillment through philanthropy and service / Becoming self-reliant / Enhancing effective leadership / Balancing family and work…

Untitled_Artwork copy 4 (Also sponsored by GROCO) provides free access to content and world-class entrepreneurs, influencers and thought leaders’ personal success stories. To help you find your path in life to true, sustainable success & happiness.  It’s mission statement:

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