US Sales Tax Audit Assistance

WHAT IS A STATE SALES TAX AUDIT?

The purpose of a sales tax audit is to allow a state to determine whether you have correctly collected and remitted the correct amount of sales tax. The audit can be viewed as a tool of the state to promote compliance with tax laws, as well as a method to increase State revenues.  As part of the ordinary course of business, most companies eventually will undergo audit for sales and use taxes.

THE AUDITOR IS NOT YOUR FRIEND

Most auditors are courteous, professional and often even friendly.  Please don’t make the mistake that because the auditor treats you nicely that he or she is your new best friend.  Not many auditors will admit it, but their performance is often rated by RRBA (Revenue Raised by Audit).  To get a better performance evaluation, better pay or a promotion, auditors understand that their primary goal should be to issue a substantial sales and use tax assessment.  Add to that the underlying perception of some sales tax auditors (thankfully not all auditors share this view) that businesses routinely cheat, or at least intentionally try to skirt the sales tax law, and you can end up with a recipe for disaster. Many audits presume you to be guilty and work to determine how guilty and how much you owe.  This is contrary to Due Process standards which imply that you are innocent until proven guilty.  Additionally, should an instance where you erroneously overpaid tax come to light, some, but by no means all, auditors will quietly move on to the next transaction.

If you have been notified that you are to be audited, please get in touch with us as quickly as possible.  We can help you with the following audit related services:

  • pre-audit review of your books & records
  • preparation of necessary documentation
  • dealing with the auditor
  • outstanding information requests
  • prior period resolutions
  • overpayments recovery

WE CAN HELP

Whatever your sales and use tax needs, our specialists at Aylett Grant Tax LLP can help you.  We have considerable experience helping clients in many different industries work through the complexities of sales and use taxes.  We can help to see that your business is treated fairly throughout the sales and use tax audit.  We also help insure that gray areas in the sales tax law are interpreted in your favor. We also defend you against the sales tax auditor making unfair assumptions or erroneous projections about your business’s revenue.

 

Pursuant to IRS circular 230, this document is to be considered other written advice.  The information in this publication is accurate as of the time of its publication.  State and local taxes are constantly changing and AG Tax assumes no responsibility for changes to tax legislation subsequent to the publication of this document.  Readers are urged to work with their tax advisor to ensure that any tax planning decisions are made in consideration of current tax legislation available.  This document was not written to be used, and it cannot be used, for the purpose of avoiding any federal, state or local tax penalties that may be imposed upon a taxpayer.