Sales tax audit defense is one of the cornerstones of our sales tax consulting practice. We’ve represented hundreds of clients who were undergoing sales tax audits. We’ve fought audit assessments in all 45 U.S. states that have sales tax. One of the most common questions we hear from taxpayers upon receiving the notification of a sales tax audit is, “What should we do now?” We’ve put together the following list of the best tips and tricks of the trade from our experience as sales tax consultants defending a sales tax audit.
Sales Tax Audit Defense Tip #1 – Relax
It’s never good news when you find out that your company has been selected for a sales tax audit. It seems like the initial reaction everyone has is to cringe and think “I wonder what the auditor is going to find?” Followed quickly by the second thought of “I wonder how much time this audit is going to take?” While no one will ever confuse a sales tax audit with fun, it’s important to remember that there is nothing you can do to avoid the process. Stressing about what prompted the sales tax audit is a useless endeavor and it’s important to remember that it doesn’t necessarily mean that the state suspects any wrongdoing by your company. In fact, I’d say from our experience that less than 10% of audits are generated because of some suspected liability.