In the past, being selected for an audit used to be a death knell for a business. Given the pervasive power of the IRS to investigate and review records, and then to institute penalties and interest that could cripple a business.
To make things worse, businesses can’t always predict when they will be audited. But there is a silver lining to this; the number of audits in total has declined in recent years. Essentially, the IRS has taken a different approach towards businesses with $250 million or more in assets.