Texas Sales Tax Litigation Consultants
The first sign of sales tax trouble in Texas is usually when the taxpayer receives a letter from the state agency with notice of intent to conduct a sales tax audit on the individual or their business. At this point, it is wise to contact a Texas sales tax consultant to ensure you understand the process, know your rights, and develop a plan to ensure the auditor is held to their standards and procedures. Our Texas sales tax litigation experts are here to help you through every step of your sales tax issue from the audit notice to litigating your case in Texas tax or administrative court.
Why Not Use My CPA or In-house Tax Department?
Businesses will often utilize their CPAs or, occasionally, in-house tax departments to handle Texas tax audits. Even if the audit is handled expertly by the CPA or tax department, the Texas revenue agency may still take aggressive positions against the taxpayer. After the assessment is issued, the taxpayer can protest or challenge the assessment of the agency and if this is not done, the amount you owe becomes final. At this point, you can still usually ask for a reconsideration of the assessment in the form of settlement negotiation. When settlement negotiations are not working during or after the audit, then the taxpayer has a small window of time to use the only other means of getting a just result – controversy. If a taxpayer does not file a complaint or petition within a short deadline, generally 30 to 60 days of the notice of determination, then the ability to litigate or even protest their tax debt becomes much more difficult.
Texas Sales Tax Helper has over five decades of cumulative experience in assisting taxpayers who need to litigate their tax matters to get just results. Our firm focuses on the tough situations, the times when hard-hitting actions are needed to take a negative situation and get the very best out of it. Additionally, we work with CPAs and sales tax consultants whose clients need aggressive legal help when dealing with the Department of Revenue or other tax authorities. In fact, we have found that is not uncommon for the start of the controversy process to be the most effective settlement tactic the taxpayer has.
A Texas Tax Consultant Can Help You Settle Your Case
When a taxpayer sues the state taxing agency, it can change how the Department views a tax situation, sometimes dramatically. The litigation department of the agency may decide that the issue an auditor was so worked up about is not a viable issue to litigate. Alternatively, the litigation department might view the potential consequences of losing the case and being bound by the decision for all other taxpayers. Under the right circumstances, this can make settlement negotiations much easier and more successful once litigation has begun. When our sales and use tax litigation consultants bring a case to litigation, the DOR’s ability to reach compromise changes, which may be used to your business or your client’s advantage. Additionally, a large percentage of litigated cases are settled without a final court decision.
To find out how tax controversy may be the tool needed to successfully resolve your tax problems, contact a qualified tax consultant from our firm today.
Texas Sales Tax Audit FAQs
You inadvertently waived a red flag or your company landed in the small percentage selected for a random Texas sales tax audit. These red flags include: cash-based businesses, prior audits that resulted in owed sales tax, your sales reported to the state didn’t match what you reported to IRS, a high volume of exempt sales, filing a refund claim or a high number of credits. There’s also a possibility that your business happens to be in an industry that your state suspects rampant under-reporting. Often times, they will target industries effected by complex sales tax laws. Learn More
1. RESPOND to the notice
2. Get organized
3. Identify/Hire your audit manager
4. Notify your auditor of who they will be corresponding with
5. Compare your sales tax returns against the federal tax return
6. Test at least one month of exempt sales
7. Reconcile your sales tax payable account versus your sales tax payments
8. Review your fixed assets purchased, did you pay sales tax on them?
9. Review your purchases on your key expense accounts to ensure tax was paid on your purchases
10. Look at our complete list that explains these steps in more detail: here
Audit duration can vary dramatically from state to state and from business to business. Waiver issues aside, an audit generally takes 3-7 months to complete. Surprisingly, some audits can drag on for a few years. Time factors usually swing on the size of the company, the ability to produce reliable and organized documentation, and the level of sophistication of the business.
We all enjoy the occasional DIY project especially when it saves us money, am I right? Before opting to go that route, consider the risk vs. rewards involved. Avalara recently conducted a study and found that the average sales tax audit costs around $115,000. When facing a sales tax audit it is beneficial to have the expertise of the financial implications on your side. That is where Sales Tax Professionals such as SalesTaxHelper can save you a lot of heartache and money by avoiding a few missteps. Learn More
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