What to do? Who to call? What are the implications? These are often questions that result from a state tax audit notice. Whether it is sales tax, income tax, or any other tax, the immediate concern is what the results may be and how to respond to them.
Utilizing expert to help certainly may help, but simply understanding the overall audit process can often be enough to get you completely through the audit with minimal paid and suffering. Some general guidelines that can help include:
- Understanding sampling and key-item selection methodology,
- Communicating often (in writing) with the auditor on the process and what is requested,
- Being thorough with all the document requests while still requesting clarification on items that seem to be "outside" what may be useful for the auditor's process,
- Reviewing all of the findings while still in the fieldwork or preliminary results stages of the audit to help identify and resolve outstanding matters, and,
- Performing your own review of opportunities for offsets or refunds for the same time period under audit.
The last consideration I have found to be the most valuable is understanding your rights once the audit has gone final. You should receive guidance that provides you a clear path on any appeal or "next step" available to you if there are disagreements in the final assessments, and it is always critical to preserve your rights within the prescribed timeframe that guidance provides.
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