With the increasing pressure to close budget gaps, state revenue departments must look for opportunities to revitalize their revenue streams. One way is to increase the number and scope of audits performed on taxpayers, thereby allowing states to collect more revenue without enacting new taxes or increasing tax rates. As a result, taxpayers are becoming the target of sales tax audits more frequently.
There are many steps accounting firms and corporate tax departments can take to reduce the administrative and other costs that result from the increased number of audits:
- The initial contact with an auditor is important, as it sets the tone for the audit process.
- Sampling is widely used in audits. Even small sample errors can translate into a substantial dollar amount when extrapolated to the entire population of records.
- Many common issues lead to problems in audits, including tax rate changes, resale and exemption certificates, use tax, and document retention problems.
Many states provide opportunities to minimize sales and use tax problems, including amnesty programs, voluntary disclosure agreements, and managed compliance agreements.
If you have a Sale Tax Problem, contact the Tax Lawyers at Marini & Associates, P.A. for a FREE Tax Consultation at www.TaxAid.us or www.TaxLaw.ms or Toll Free at 888-8TaxAid (888 882-9243).
For more information on this topic go to AICPA - Sales Tax Audit Best Practices.
For more information on this topic go to AICPA - Sales Tax Audit Best Practices.
Read more at: Tax Times blog
