Texas Sales Tax Audit Defense Attorney
Exactly what is sales tax audit defense? Why did you just enter that phrase into google?
Many times, clients call and ask us why they are being audited? Is it because they over underreported their sales, bought too much, or simply made to much money?
The correct answer is – WE WILL NEVER TRULY KNOW.
Amended returns are a major red flag for audit. This happens normally when somebody made an intentional error on their original return and then just severely reduced their tax liability months after receiving a notice from the State showing a tax liability for previously filed sales tax returns.
Sometime, industry standards are also used for determining your revenue. It doesn’t sound fair, but that is also a measure of how much you should have made in sales using credit card, cash, or checks. In essence, if the store down the street from you has cash sales the equivalent of 5% for their gross receipts, then, the auditor will wonder why you only report 4% of cash sales – even if that truly is the case.
So, back to audit defense – what is it and why you need it. Audit defense is a service that we offer to ensure that our taxpayer client is not getting the short end of the stick by the auditor. That means that the auditor is not incorrectly interpreting information and then in turn, writing up incorrect liabilities in conjunction with penalties and interest. You always have appeal rights, but there are just that many more errors to fix. During audits, we have seen clients sign away their rights in terms of agreeing to things that they should not have agreed with. This will also become another hurdle to appeal.
Audit Defense IS NOT A WAY TO HIDE YOUR BOOKS AND RECORDS. Unfortunately, some people think that when you hire a tax attorney, you no longer need to show your books and records. That is absolutely not the case. If you do not have all of your books and records, we will manage the audit and fill the gaps as best as possible. However, not producing documents will end in poor results.
I hope to have shed light on the Sales Tax Audit Defense procedure. Call us to discuss your audit and/or appeal.
Texas Sales Tax Audit Defense Attorney
