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Prepare for a Successful Sales Tax Audit (Part 2)

February 4, 2020 by OSYB Staff

You have received a sales tax audit notice and you already have put into action your pre-audit steps. Here is what Intuit Quickbooks shares as to what to do on receipt of the audit notice:

  • Contact the auditors and schedule an initial audit conference. Make sure that all correspondence is properly documented and that all communication is in writing and dated.
  • Gather all your required documentation. Be thorough and look over past audits if any and check for all tax rate errors. Also, use this time to check for over payments/refunds and make arrangements for reimbursements.
  • When the auditor appears on site, have a designated location for them to work that is quiet and private. Be very clear as to who in the office can communicate with the auditors and answer questions. In this matter, all communication should be documented.
  • Often auditors are third parties and it is vital that you understand your relationship and boundaries with the auditors. Keep these in mind:
    • frequently check in for updates
    • if your business is seasonal, request to have samples taken during both high and low seasons
    • request that single errors be removed from the sample pool
    • prior to auditors formal assessment, request for their data and negotiate any issues before a final assessment is submitted.
    • should the final assessment look precarious for you, immediately consult a tax advisor
    • review the assessment and appeal as needed with the support of tax advisor or lawyer.

Receiving a sales/use tax audit should not be a major stressor. Maintain a system to record your sales tax data and always be prepared for an audit. Ensure that you are in compliance every year and if there are errors correct them immediately. Initiate checks and balances to prevent the errors from occurring again. Find software that will help you stay in compliance from year to year, and throughout the US.

For full article: Ten tips for a successful sales tax audit

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