Need help with a Georgia sales tax audit?
Learn how a sales tax audit defense Consultant in Georgia can help you. Have you received a letter from the Georgia Department of Revenue notifying you that you have been selected for a sales tax audit? Have you simply received a phone call from a Georgia tax auditor asking seemingly harmless questions about your business and how you handle Georgia sales taxes? However you have been contacted, a Georgia Sales Tax Audit can target the last 3 years of your business activity and even farther back if sales and use tax returns have not been filed. Even a minor error on a type of transaction, when multiplied over three years, can add up to a considerable amount of sales tax liabilities. Often times a sales tax audit can be a “gotcha tax audit” and simply not having the correct paperwork can result in a huge sales tax assessment.
In Georgia, a sales tax audit begins by the Department notifying the company that it has been selected for audit. From there, an initial meeting is set to discuss the nature of the business that has been audited. After an audit plan is developed, the auditor will perform an examination by comparing the taxpayers books and records to the items reported on the sales tax return. Upon completion of the examination, the Department will issue a report with adjustments. It is important to know that you have the right to have a professional represent you during your audit by completing a power of attorney form.
Sales Tax Consulting Services in Georgia
An advantage of working with our Georgia sales and use tax audit consultants is that we are often aware of issues that cannot be resolved with the sales tax auditor and need to be protested. Knowing which issues cannot be resolved often result in a more efficient resolution of the case. Our regularly handle administrative protests, administrative and tax court filings, and appeals against state revenue agencies.
If you disagree with the adjustments cannot be resolved with the auditor, a notice of proposed assessment is issued. It is critical that if you wish to protest the proposed assessment, you must do so within 30 days. Protests of contested Georgia sales tax assessments can be completed on the Georgia Department of Revenue’s protest form.
If the issue cannot be resolved informally with the Georgia Department of Revenue, a case can be filed by the taxpayer or his lawyer in the Georgia Tax Tribunal. The Tax Tribunal provides independent review of the Department of Revenue in tax disputes. While it is not required, it is often advisable to have a qualified professional handle your case in Georgia’s Tax Tribunal.
Georgia Sales Tax Audit FAQs
You inadvertently waived a red flag or your company landed in the small percentage selected for a random Georgia 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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