|
How Can A State Audit Be Reduced?
Audit Reduction
There is an extremely good chance that we can reduce your sales and use tax audit. In fact, we may even be able to turn your assessment into a refund. Based on past history, we have been able to reduce nearly all audits that we have examined.
With certain audit assessments we have been able to eliminate the audit entirely. With others, we have been able to file for a refund after we have eliminated the entire audit assessment. In fact, during one of our last audit reviews, we found additional overpayments (overpayments that the auditor had not listed) that were approximately one thousand times the amount of overpayments that the auditor had given credit for in the audit assessment.
To be a valid audit review, the review should be an extensive review that examines and lists all overpayments as well as underpayments. The generally two types of audits:
Types of Audits
The 100% Review
The complete 100% review is a review of 100% of the records for the audit period. These reviews are generally limited to smaller companies where sales and purchases are reviewed entirely. Sometimes on larger companies the review of sales is conducted using a 100% review process.
Sample Review
This is the most common type of review. These reviews are performed on larger corporate taxpayers in order to provide a speedy audit review. In these reviews, all of fixed assets are reviewed and a sample of expenses is reviewed. The sample is usually a block sample. However, due to the increased workload of government entities statistical sampling has come to be used quite frequently. Now lets look at a typical audit review. |
|
 |
Typical Review
In a typical review the auditor will tell you the audit period to be reviewed and the type of audit review that will be used. You will be asked to provide the necessary records that are to be audited. That is generally where the conversation ends, that is, until the auditor gives you a copy of the worksheets. He usually gives these to you without any direction other than to say: “this is what we have found and want to give you a chance to look over them before we compute the audit”. If these are not reviewed then he will compute the audit results and you will be billed.
The Auditors Job
It is the auditor’s job to look for items that are taxable and have not been taxed. Auditor’s job performances are reviewed using certain criteria. Those are usually the number of audits conducted and the total amount of assessed tax. Auditors are not in the business of filing refunds for you. While that is the norm, auditors will sometimes include credits in the audit. These credits should not be construed to be all credits that are available to you. In addition, all items listed as underpayments, should be reviewed to determine if it should be listed debit, credit, or not be listed at all.
| 
