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Prepare for a Successful Sales Tax Audit (Part 1)

January 30, 2020 by OSYB Staff

At some point or another, it is possible that you will be audited by the Internal Revenue Service (IRS) on the collection and remittance of the appropriate sales tax. It may be a good idea to be prepared way in advance and have a good system in place. Intuit QuickBooks shares some pre-audit tips:

  • Make sure you know your inventory thoroughly and the sales tax rules that apply to all the items and services.
  • Create a process for the exemption certificate process that includes compliance, verification of all information, and storage of the certificates.
  • Verify and check the marketplace facilitator agreements to be assured that you are collecting, reporting and paying on your sales via the facilitator and meeting requirements. Also verify that your marketplace facilitator agreements are in compliance with any tax changes.
  • Create a process that will record business purchases, the sales tax implications if any, and to report use tax. Failure to do so may trigger an audit.
  • Ensure that you are set-up to receive, review in a timely manner and respond to audit notices upon receipt. Make sure that all your contact information is up-to-date with the the DOR.

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

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