Sales & Use Tax Compliance
Audit Representation & Defense
A field audit, as conducted by a State Auditor from the NY / NJ Division of Taxation, can vary greatly in scope and complexity based upon the nature of your business and the industry your company operates within. You certainly may be able to handle this process internally however, it's highly recommended that you immediately seek and obtain professional advice in determining your best course of action as to exactly how you should proceed.
You may engage us to represent and defend your company at any time before, during or after the audit but again, it's recommended that you contact us upon receipt of the Division's audit letter as initial audit planning procedures can then be timely implemented. These initial procedures, along with numerous other defensive procedures employed during and after the audit, will all contribute to the overall success of safeguarding the resources of your company. Our goal is to provide our clients with the best possible resolution to the audit process in the most efficient and effective manner.
Several of the audit considerations and procedures that BARR CPA LLC will generally plan for and conduct during a typical audit proceeding include the following:
- Respond to the audit letter and initiate communication with the auditor
- Determine when and where to conduct the audit
- Gather and review the appropriate books, records and documents
- Perform initial compliance review procedures
- Prepare for the pre-audit interview and associated questionnaire
- Conduct the audit process with the auditor
- Accurately determine what taxes, audit periods and tax returns are statutorily still eligible and subject to the audit process
- Review and analyze the Consent Form and its related issues
- Determine and select agreed upon sample periods that are reasonable and reflective
- Provide the auditor with the appropriate information requested upon completion of an analysis and review of all documents provided
- Review and evaluate the auditor's sampling methodology and procedures
- Review and analyze the auditor’s workpapers and associated tax assessments for accuracy, methodology, and correct statutory application of the related laws, regulations, court cases and Division policies
- Negotiate selected audit issues as well as the related tax assessments including penalty and interest abatements
- Apply reverse audit techniques
- Professionally resolve disputes
- Conduct post audit conferences
- Prepare correspondence
- Plan for and conduct informal meetings with the auditor's supervisors (when req)
- Plan for and conduct formal conferences and/or appeals (when req)
If your company does business in more than one state, it may have additional sales and use tax exposure.
Sales and use tax laws and regulations are full of surprises, particularly in certain industries. If your company does business in more than one state, those surprises can multiply. You may even be doing business in another state without realizing it, to the extent that you need to register and report that state’s taxes.
Here’s where we can help. We will review your company’s operation for potential nexus issues before an outside state contacts you, and we’ll help you develop strategies to minimize your exposure. If you’ve already received a state’s nexus questionnaire, we’ll help you prepare a truthful response that will put your company in the best possible position. If a liability is asserted, our company will negotiate with the state and fight to minimize the assessment.