Updated: July 4, 2024 Explore why sales and use tax audits can be lengthy and learn proactive strategies to manage and expedite this process.
Key Takeaways:
If you think your or your client’s sale and use tax audit is taking too long, you are probably right: The taxing authority would (normally) like to conduct the audit as expeditiously as possible. But there are all sorts of reasons why that may not happen.Â
There are legitimate reasons why the audit may be taking a long time: Staffing shortages, a backlog of audits, the complexity of the business, etc. can all conspire to turn the sales and use tax audit into a drawn-out affair. Â
Provide documents and records ASAP, be proactive & manage your expectations: Business owners and their representatives do not control the pace of the audit. The only thing they control is how quickly the requested documents and accounting records are submitted to the auditor. It is also a good idea to be proactive. Ask the auditor for updates consistently.
Other things you can do: If the delays are due to the taxing authority, you may be able to request the waiver of some of the interest charges. Business owners have the option of not signing statute waivers, which gives the parties involved extra time to complete the sales and use tax audit, but a failure to do so can bite the business owner in the… (you know where I am going). Â
My general advice is to take a breath and be patient. Manage your expectations, sales and use tax audits are not conducted quickly. Just focus on achieving the best result possible.
Our mission to provide a resource so business owners, accountants and bookkeepers can understand sales & use tax compliance. We know that sales and use tax laws are not the easiest to understand. Our focus is on empowering you with a framework and general understanding, so you know what questions to ask and where to go to get the information you need to stay on the right side of sales and use tax compliance.
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