LETTER 4108

IRS Letter 4108 is a cover letter for an IRS business audit. It is sent to businesses that have been selected for an audit, and it explains the purpose of the audit and what the business needs to do to prepare.

There are a number of reasons why a business might receive an IRS Letter 4108. Some of the most common reasons include:

• Random selection. The IRS randomly selects a small percentage of businesses for audits each year.
• Specific concerns. The IRS may target a business for audit if it has specific concerns about the business’s tax returns. For example, the IRS may audit a business if it has a history of late or missed tax payments, or if it has claimed a large number of deductions or credits.
• Related audits. The IRS may audit a business if it is related to another business that is being audited. For example, the IRS may audit a parent company if it is auditing a subsidiary company.

If a business receives an IRS Letter 4108, it should take the following steps:

• Gather the necessary documentation. The IRS will request a variety of documentation during the audit, such as tax returns, financial statements, and receipts. Businesses should gather this documentation as soon as possible so that they can provide it to the IRS in a timely manner.
• Respond to the IRS in a timely manner. Businesses should respond to the IRS’s initial contact within 30 days. If a business needs more time to respond, it can request an extension from the IRS.
• Cooperate with the IRS. Businesses should cooperate with the IRS during the audit process. This means providing the IRS with all of the requested documentation and answering any questions that the IRS may have.