How to get through a sales tax audit

| Apr 5, 2019 | Sales Tax

Connecticut residents who have to collect taxes on items that they sell may find tax season a bit of a nightmare. Sales tax rules can be complicated and are often changing. This means that, despite one’s best efforts, one might be picked for an audit at some point. Here are some things that can help one through a sales tax audit.

There are a few things that can be done well before being audited. First, it is necessary to understand the sales tax rules regarding the goods and services one offers. Second, find out if any goods or services offered are exempt from sales tax. Finally, understand one’s use tax exposure — meaning make sure to pay taxes on items purchased for business use. Staying on top of these things can help businesses avoid sales tax audits altogether.

If selected for an audit, do not ignore it. Respond and set an audit start date. Then make sure to gather all documents requested and anything else that may help one’s case. When the date of the audit arrives, go to the designated audit spot — preferably a place that is quiet and away from employees.

When the in-person portion of the audit is completed, do not wait around for the results. It is possible to ask for updates. It is possible to ask to review findings before they are officially filed. It is possible to attempt to negotiate any found issues before the final report is released.

Finally, after the results of the sales tax audit are released, review and appeal if doing so would be of benefit. Not everyone agrees with an auditor’s assessment. If one wishes to appeal, just know it must be done in a certain time frame.

A sales tax audit can be a stressful thing to get through. Thankfully, it is not something that Connecticut residents have to go through alone. Legal counsel can be at one’s side throughout the entire process, working to ensure one does not have to pay more taxes than necessary and making sure one’s rights are not being violated.

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