A sales and use tax audit can be an expensive business. The large majority of sales and use tax audit situations result in assessments against the company the government audits and the IRS is quick to try to take advantage of this source of revenue. You do your best to make sure that your accounting procedures are correct and accurate but with a big company full of moving parts, it’s easy for some items to fall through the cracks. These items will come out in a sales tax audit and your company will end up paying. So what can you do to protect yourself and your company?
Sales and Use Tax Audit Services
More and more companies are taking advantage of sales and use tax audit services to protect themselves. Many states have enacted Managed Audit Programs which provide a less expensive and less disruptive option than standard audits. These programs often allow companies to play a lead role in the sales tax managed audit process by performing some, or all, of the audit functions. As such, it can be beneficial for the taxpayer to conduct managed audits and remit sales tax per a direct pay authority. Managed audit agreements outline acceptable audit procedures and allow the majority of the audit work to be completed internally to save on time and expense for both parties.
Our experienced professionals evaluate alternative compliance procedures to determine which, if any, will benefit our client. Because alternative compliance procedures are not suitable for every company, we help our clients explore their options to ascertain whether the benefits outweigh the costs of a sales tax managed audit.
How Managed Sales and Use Tax Audit Services Work
Many states in which you may be subject to a sales tax audit offer managed or certified audit programs. These are programs that allow the outsourcing of your company’s audit, saving the state government the time and expense of performing the audit itself. The benefit of a managed sales and use tax audit is that it gives your company control over the situation. Benefits of taking advantage of a managed audit program can include identification of any overpayments that might result in a refund to your company, a waiver of the statutory penalties that a standard audit might generate and the ability to continue work without the kind of disruption the presence of revenue agents at your type of business can cause.
Which States Offer Managed Audit Programs
Currently, you may be able to take advantage of a managed audit program if your business’s main base is in one of the following states: Arizona, Colorado, Connecticut, Florida, Georgia, Idaho, Illinois, Kansas, Louisiana, Maine, Maryland, Michigan, Minnesota, New Jersey, Nebraska, New Mexico, North Carolina, Ohio, Pennsylvania, South Carolina, Texas, Utah, Virginia, Washington or Wisconsin. Contact TaxMatrix today, as your next audit could be just around the corner.
TaxMatrix can assist with the negotiation and implementation of alternative tax compliance procedures to ensure your company only pays your fair share.