State & Local Tax Blog

Don’t Let Auditor Sleight-of-Hand Cost You An Arm & A Leg

1/3 of Sales Tax Audits Result in a Credit, But Does That Mean You Made Out Like A Bandit?

Not necessarily. Before you go bragging about your last sales tax audit while running to the bank, your sales tax auditor may be breathing a sigh of relief while peeling out of your parking lot after narrowly avoiding a much bigger refund check.

Take it from a bunch of Ex-Auditors who’ve been there. Auditor Priority #1: Bring in revenue to the State. You can probably imagine how much priority “Making sure Taxpayer gets credits for all taxes overpaid” has. Yes, it’s way down there. Especially now with bone-dry state coffers and meager revenues stacked up against bloated budgets.

The first thing an auditor looks for is easy money. Like unpaid tax on fixed assets, or missing & incomplete exempt/resale certificates, or unremitted tax on sales or rentals, or… the list goes on and on. But once an auditor depletes his bag of tricks and he’s found more credits than deficiencies, it’s time to get out of Dodge before more overpayments are found.

“You’re in good shape,” they say, hoping you won’t ask any more questions, “just keep doing what you’re doing.” Making sure you don’t pay too much tax is your problem (or opportunity?) not the state’s. So a no-tax due audit, and pat on the back might have (should have?) been  been a $100,000 refund.

The problem is, most companies after just getting a “clean” audit from the state become averse to review the same audit period for undiscovered credits or exemptions (due to recent court cases, and/or letter rulings, or flat out errors) even though it could result in a more accurate tax picture of their business activities and potentially much bigger windfall.

“Will Work For Refunds” is Our Cardboard Sign, & We’re Not Embarrassed By It

When considering a firm to do this kind of work, we are acutely aware that companies don’t want to pay hourly going after refunds they don’t even know exist, which is why most of the time we are willing to do this kind of work on a percentage of refunds found basis.

We can’t guarantee that we’ll find anything, but it won’t cost you anything to have us look either, and…

You Might Be Surprised To Find that you not only kept your arms and legs, but you thumbed your nose at the taxman while doing a victory dance.

No-Cost Consultation — We Don’t Want To Waste Your Time

We are happy to talk to you on the phone about your audit and discuss whether we think it’s worthwhile to get us involved or not. Sometimes a quick review of your audit documentation can tell us whether there is enough of an opportunity justify additional work.

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