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Audit Representation

Sales and use tax audits are a fact of life when you operate a business. No business is immune from being audited, and eventually your business will more likely than not be selected for one. While most jurisdictions will claim that audit selection is random, experience reveals that is not the case. Common reasons for being selected for an audit include habitually filing returns late, “leads” identified through other audits or whistleblowers, or by being in an industry that has a reputation for poor sales and use tax compliance.

If You Receive Notification of an Audit

First and foremost, don’t panic. When your audit notice is received in the mail, it is important to address the matter immediately by contacting the auditor. If a phone call is received, it is important to request written confirmation. An audit is always inconvenient, and the disruption caused by an audit may have you looking for ways to delay the audit until a better time. However, it is important to remember the purpose of the audit is to ensure compliance, not to assess tax. If tax is assessed, and the quicker the audit is complete, the lower the interest on the assessment (if any).

It is Important to have Experienced Representation

Professional Representation for an audit is critical to assuring the best possible outcome. Regardless of your reaction to being audited, it is never advisable go through the audit process alone.

Experienced representation is crucial in properly preparing for a sales tax audit in the most efficient way possible. Reviewing business records prior to the audit and determining audit exposure are important steps to complete prior to the audit.

Having experienced representation managing the audit process is critical to fostering positive and professional relationships with the auditor and his superiors. In addition, an experienced practitioner ensures the audit is conducted within the boundaries of the law.

When the Audit is Completed

Having an experienced practitioner is important when reviewing audit findings. The review is not just about understand the statutes applicable to creating the assessment, but the experience to refute the auditor’s position by finding why items may not be taxable. Additionally, challenging the audit methodology is often an overlooked opportunity when reviewing an audit.  Finally, if appealing the audit is necessary, experienced representation is crucial to make sure appeal procedures are properly followed, and if necessary, a settlement agreement is properly negotiated to reflect your best interest.