It is certain, as an owner of a company or business, at some point of time you will be selected for a sales tax audit by the taxation department. You will get an official mail from the taxation department about your sales tax audit. You will get comprehensive details of your audit in the mail, and you will be obliged to follow all the instructions explained in the mail.
Whether your business is a startup or has been around for years, you can be selected for a sales tax audit anytime in a tax year. And once you get a notice by mail, you become answerable to that mail. If you are prepared for the tax audit, you are obliged to be available on a determined day and time with all your accounting books and records. While on the other hand, if you are not prepared and need some time for a sales tax audit, you can send a written request to the taxation department. If you will have real reasons to extend the date of the tax audit, the taxation department will approve your request. On the other hand, the taxation department will reject your extension request for a sales tax audit when they will find your reasons for extension baseless and unrealistic.
For most businesses, it is a threatening legal procedure because their accounting books and records often have some problems. However, you don’t need to worry if your books are clean, all transactions are appropriately explained, balances are matched in every accounting book, and no records are missing. What you need to do is just be prepared for your next sales tax audit.
Here are some important tips that will guide you on how to be prepared always for an unexpected sales tax audit.
Abide by the Tax Laws
No doubt, everybody knows that they must abide by the tax laws, but not everybody abides by the laws. Being a true citizen of the United States of America, you must comply with the tax-related rules and regulations set by the tax law authority in the US. If you do so, you will never find any problem in your accounting books, and you will never lack confidence when facing auditors during your tax audits.
To abide by the tax laws, you must know what tax laws say about the category of business in which your business is. Learn what are some mandatory dos and don’ts set by the tax law authority in the US for your business. Follow all those, complete all the mandatory transactions in a tax year, timely pay your tax returns, and keep your records clean.
Audit Your Account Books Often By Yourself
Auditing your account and record books often by yourself is actually a great idea to always be prepared for a sales tax audit by the government agency. Here, with the word “yourself,” we are not referring to you literally. We are referring to an audition hired or salaried by you. For your satisfaction and to be prepared always for an unexpected sales tax audit, you must often audit your books by yourself. It will definitely help you to keep your transactions transparent, business’ activities clean, and be prepared to face the government auditors during your tax audit.
Approach Legal Assistance
When you get a notice from the tax law authority regarding your sales tax audit, don’t be confused, take a long breath, and look for reliable legal assistance. Sometimes, when business owners get a notice for a tax audit, they try to become a tax law specialist despite not having expertise and experience in this field. Consequently, they make mistakes and those mistakes cause huge penalties, and sometimes criminal charges. So, it is better to approach legal assistance when you are selected for a tax audit. In the US, you can easily find a reliable tax attorney or tax law firm for sales tax audit help
. Just contact your preferred tax attorney and explain all about your tax audit. He/she will examine your books, note down the issues, and provide an appropriate solution. So, make sure you approach the legal assistance as soon as you get legal notice for your tax audit.
Get Your Reasonable Answers Ready For Every Business Dealing
A government auditor deeply examines your accounting and record books to find out as many problems as possible. He/she can ask for an explanation for any dealing mentioned in your books and you must have a reasonable explanation for that. If you fail to appropriately explain the business dealings asked by the auditors, you will be the target. So, discuss with your accountants, auditors, business partners, and legal advisors about your business transactions and make sure you have a reasonable explanation for every business transaction mentioned in your books.
Learn How to Smartly Deal With The Government Auditors
If you are going to face government auditors for the very first time for your sales tax audit, then you need to be extra careful. You will have to learn the mandatory skills, etiquette, and behavior to smartly deal with the auditors. Government auditors are very smart. They closely analyze your books as well as your way of dealing. If they find any issue even in your dealing, they can target you. So, be careful and be prepared to smartly handle all kinds of situations. The best way to come out as a winner from your sales tax audit is- hire a legal assistant who can assure assistance in your tax audit process.
Attorney Timothy Hart
Timothy S Hart, the founding partner of the tax law firm of Timothy S. Hart Law Group, P.C. is both a New York Tax Lawyer & Certified Public Accountant. His area of expertise includes innovative solutions to solve your Internal Revenue Service and New York State tax problems, including tax settlements through the Federal and New York State offer in compromise programs, filing unfiled tax returns, voluntary disclosures, tax audits, and criminal investigations. [ Attorney Bio ]