Check Out Leading Tax Group Featured On Major News Outlets As Top Tax Experts!

What not to do in a sales tax audit

On: May 1, 2020

Facebook
Twitter
LinkedIn
Share
So you are about to go through a sales tax audit? Do not panic. Sales tax audits are not something that should cause you a great amount of fear unless you knowingly did something wrong. While sales tax audits are something that can be randomly triggered, it is always best to take the utmost precaution when having to go through them as they can bring a lot of unwanted fines your way if you are not careful. Figure out your records now If you are going to go through a sales tax audit, then the first thing you should do is go through your records and make sure everything is done correctly. An auditor is going to ask for a selection of records already, but could ask for more in the meantime or during the process.  Having an organized record system that is up to date and has all of the necessary documents will be crucial to your business regardless of if you are being audited. Sales tax audits are looking at the sales tax that you have reported from anywhere from last month to four years ago, meaning that you should have at least four years of records to go back to in case an audit happens. Most taxing agencies in California require that you have at least four years of records at the bare minimum. Some of the documents requested may include a general ledger, journal entries, sales and purchase journals, invoices, bank statements, resale and exemption certificates, financial statements, federal tax returns, sales and use tax returns and work papers, and shipping documentation. You may also want to go through and either hire a certified public accountant to go through things with you or get better software to do it yourself. It is not a bad idea for you to do your own sales tax audit on yourself to go through everything and make sure that you are following all the codes that you need to follow. Hire a lawyer After you have been notified that you are going to go through a sales tax audit, you are going to want to hire some legal representation. Hiring a tax attorney is a good idea since they will know how to navigate the complex tax laws and the government’s audit procedures and can help you on your behalf.  A tax attorney will make sure that you and your business are being treated fairly during the sales tax audit. This will make sure that the auditor or government does not overstep and cause you to end up with more fines than you want. The tax code is complicated, and while you should update yourself on any changes, a lawyer will know the ins and outs of the code and ensure that you do too when you hire them. Always make sure to call Leading Tax Group and don’t attempt to do it yourself.
Call Us Now