In need of Sales Tax Audit services ? Come to Sidago
With years of experience in accounting services, Sidago offers premier sales tax audits services to businesses of any domain and any scale. Our objective is to make sure that the business goes through the annual sales tax audits without any turbulence or disruption to the current business. Sidago employees the finest tax accountants and tax auditors in the market to provide a valuable services for your money.
In order to make sure that your sales tax audits don’t cause you any trouble, there are few fundamental things you need to know about sales taxes.
How the state determines who undergoes sales tax audits?
Federal states use a number of systematic methods and data available electronically, to determine the taxpayers who are at a risk of not reporting or not paying sales taxes. Some tax payers – due to their size, sales volume or the complexity are chosen regularly. Some ends up in the radar of the tax authorities because of a specific event or incident.
Following are some of the triggers that cause authorities to subject a tax payer to an audit.
In Texas, tax payers who are labeled as ‘prior productive’, which means that they have received tax adjustments over USD10,000 in previous auditing years are likely to be audited in the current year.
Tax payers who record significant exempt sales are also likely to be audited frequently because of the discretion involved in determining the cause of except sales.
Tax payers who are frequently late to file their tax returns are likely to be audited.
If a vendor of a company didn’t charge proper use tax, and if that vendor gets audited, there’s a high probability that the customer organization too will be audited.
Auditors themselves may pick firms to audit, based on their casual observations, while attending to their day-to-day personal activities such as pumping the car, doing domestic shopping etc…
The process of sales tax audits
When a business is selected for Chicago tax audit, the legal representative of the tax payer will be notified regarding the audit by an auditor, who would mutually agree on the commencement date. The auditor has to explain how the business was selected for the audit, and the selection can happen in various ways.
through referral from another division of the Finance Department
through referral from the City Department
through referral from another business/competitor
from information gathered during another audit
random selection from the registered tax files
through referral from a government agency under information exchange agreement
During the preliminary discussions with the organization representative, the auditor will explain the tax types and the tax period which is taken in to account for the audit. Later, he will send an audit notice highlighting the taxes, tax period, date and location of the audit. The location is where the audit is taking place and it is required that all the relevant tax records, documents to be available at the said location at the agreed time, to start the audit.
Typically, an audit can be completed within 3-4 months, assuming that the auditor will spend a total of 3-4 weeks at the audit site. However, the exact time taken to complete the audit may vary based on different factors.
Taxpayer responsibilities pertaining to an audit
The tax payer has certain responsibilities on a sales tax audit, to support for a smooth auditing process.
the taxpayer has to ensure accurate and timely bookkeeping of the business and its financial activities. This bookkeeping should include original source documents (bills, receipts, etc…) and books of entries.
during a tax audit, the tax payer needs to submit all duly completed documents for the purpose of the audit.
Tax payers following the above guidelines will make it easier to get through the tax audit process.
Tax payer rights
With respect to U.S. Federal Income taxation regulations, a tax payer is entitled for several rights during a tax audit.
IRS employees need to treat the tax payers with professional courtesy during an audit
A tax payer has the right for privacy and confidentiality about his tax issues
A tax payer can be represented either by himself or a qualified, authorized representative
In a dispute and disagreement between the tax payer and the IRS, the tax payer has the right to appeal – either to IRS or to a court
A tax payer has the right to inquire the tax officer why he’s asking for certain information, how the information is going to be used and the consequences of not providing the requested information
Sales tax audit services offered by Sidago
Sidago’s services for sales tax audit covers the following:
Reviewing the tax authority notice or inquiry and explain what it means
Researching issues involved and investigate how to resolve theme
helping you with assembling relevant financial documents and records for the tax audit
Reviewing the tax audit findings and explaining them to you
Explaining the appeal process and other options available to you in the event you disagree with the tax authority’s findings
No matter what, an audit is a frightening thing, you always worry that you will have to pay more than you expected. However, it’s not necessarily the case. IRS allows a tax payers a number of opportunities for tax saving, therefore, if you maintain proper records of your deductions, it’s highly probable that your tax audit will go smooth. One of the best practices in tax file maintenance is to collect and organize the financial records throughout the year, so that you don’t have to worry about spending all your time to clean your tax file, when an audit is due.
Tax auditing is pain sake, with the right hand to support, your business can survive it smooth as ever. Call our Sales Tax Audits services department to schedule an appointment as soon as possible, so that you and us will both be ready when your tax audit starts.