A payroll audit (sometimes called an employment tax audit) is typically triggered when the IRS or your state’s Department of Revenue suspects inconsistencies in how you’ve reported and paid payroll taxes. The most common red flags include mismatched wage reports, unpaid or late payroll taxes, misclassified workers, and large or unusual changes in reported payroll from one year to the next.

Running a business involves hundreds of small financial and operational decisions every week — and each one leaves a mark. That “mark” is what accountants and auditors call an audit trail. Understanding and maintaining one can protect your business from costly mistakes, IRS trouble, or even fraud.

Business receipts may not be glamorous, but they’re critical for compliance, expense tracking, and audit prep. Losing track of them can mean missed deductions, inaccurate books, and stress if the IRS comes knocking. According to the IRS, businesses must keep supporting documents like receipts for as long as they may be needed to prove income, deductions, or credits claimed on a return【IRS.gov†source】.