Sales Tax Audit: What To Do And What Not To Do?

Admin 2020-03-07

Wouldn't it be great to get an input from a state tax auditor before you come across one? Many business owners are afraid of the Revenue Department (DOR) feared notice because sales and tax audits are, at best, an annoyance and, at their worst, very costly.

Situations put you and the auditor at risk in which you are unable to seek advice, pick their brain on how to escape fines, or seek advice at any point during most of the process.

Which is why sales tax audit services in the United States is becoming a very popular thing now.

Here at BlueSky we provide excellent sales tax audit services in Lake Charles and in this article we present you some advice on what to do regarding your business’ sales tax audit.

Advice #1: Correctly Determine, Measure and Report Taxation - The First Time!

This may sound like a no-brainer, but enterprises quite often get into distress or jeopardize the audit process when they have inaccuracies in either evaluating or presenting sales and/or tax.

Whether you have small errors in your payments, such as requesting the incorrect price on a particular invoice, or a serious blunder, such as failure to pay the collected taxes, the audit process radically changes once the auditor feels that there has been cause to probe.

Begin by reviewing your tax obligations and don't waive the research needed to do it properly. Conduct a Nexus Analysis with a CPA if in doubt, ideally one that deals in State and Local Taxes (SALT).

At BlueSky we have a whole team of tax professionals that provides sales tax audit services in the United States and also do/prepare business taxation in the USA.

Advice #2: Conduct Your Internal Audit First

Nobody really likes surprises except if one party is involved. Performing a pre-audit or invert audit once you receive a state notice allows you to check inaccuracies — and right them in time.

You could do an audit yourself, however, it is beneficial to outsource this role to a company that provides taxation & accounting services in the USA. Your accounting department may attempt to prevent disclosing their own errors, or may simply ignore inaccuracies.

It's like writing your book to test yourself. When you are so close to the cycle it is hard to be objective. But even if you don't hire professional experts, it's worth the effort to perform an internal audit and will probably pay off down the road with reduced fines.

However, our financial experts at BlueSky don’t recommend this practice as not getting sales tax audit services in the United States does more harm than good.

Advice #3: Hold Your Accounting & Reporting Practices Clear

This seems obvious, like Tip # 1, but contradictory accounting methods can at any time sneak into your company. Let's say you hired a three-month temp instead of a professional company providing sales tax audit services in the United States when your accounting professional was on leave.

The temporary employee may have a different approach to management or documentation. That is not a big deal at face value, but an auditor will examine any adjustments to your accounting procedure.

Another probable cause why incoherent procedures are creeping into your company is when you implement changes to your accounting system and technology back office. Shortly after you move to a new system and/or purchase a new e-commerce site, do a quick audit on your transaction records etc.

Coherence is even helpful when you have incorrectly administered sales tax. When you have recognized a common mistake, it is far easier to correct transactions, instead of combing through thousands of records and identifying mistakes one by one.

Why Hire Us To Audit Your Business?

BlueSky Accounting is a highly advanced accounting and bookkeeping company that has audit professionals do the auditing for you. Also, we provide the following services that make us an excellent provider of bookkeeping & accounting services in USA: