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Handling Texas Sales Tax Audits and Appeals

Handling Texas Sales Tax Audits and Appeals. Prior to fieldwork beginning. Complete the audit questionnaire. Prior to fieldwork beginning. Provide documents auditor requests Federal tax returns Sales tax payable account detail Bank statements Depreciation schedules Chart of accounts

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Handling Texas Sales Tax Audits and Appeals

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  1. Handling Texas Sales Tax Audits and Appeals

  2. Prior to fieldwork beginning • Complete the audit questionnaire

  3. Prior to fieldwork beginning • Provide documents auditor requests • Federal tax returns • Sales tax payable account detail • Bank statements • Depreciation schedules • Chart of accounts • Resale/exemption certificates

  4. Prior to fieldwork beginning • Control what the auditor sees • Determine where the bulk of the fieldwork will take place • Taxpayer’s site • CPA’s office • Auditor’s office

  5. Prior to fieldwork beginning • Get resale/exemption certificates in order!!! • Elements required for exemption certificates • Name and address of the purchaser • Name and address of the seller • Date and signature of the purchaser • A description of the item to be purchased • The reason the purchase is exempt from tax (exemption only) • Sales tax permit number for purchaser (resale only)

  6. Prior to fieldwork beginning • Timeline • Prior to entrance conference • From entrance conference through 60-day period after notification granting Redetermination Hearing • After 60-day period

  7. Timeline Notification of Audit Results Redetermination Hearing Request(SOG) Prior to Entrance Conference Entrance Conference Exit Conference 60-Day Letter 61st Day 1st Period 2nd Period 3rd Period

  8. During the Audit • Get a POA • Treat the auditor with respect in a non-confrontational manner • Document communications with the auditor – email • Tick and Tie – review the auditor’s work

  9. During the Audit • Waiver of statute – request interest waiver • Research sources • STAR • Tax help • Audit manual

  10. Post-fieldwork • Talk to the auditor’s manager/supervisor (Reconciliation Conference) • IARC (Independent Audit Review Conference) – schedule prior to Exit Conference • Exit Conference

  11. Post-fieldwork • Notification of Audit Results letter will be sent • 30 days to respond • Request Redetermination Hearing • Provide Statement of Grounds

  12. Post-fieldwork • Redetermination Hearing • District Court

  13. Benefits/Ancillary Issues • Refunds! • No downside • Interest – consider paying prior to appeals

  14. Questions? Sales Tax Specialists of Texas Stephen Hanebutt 972.422.4530 shanebutt@salestaxtexas.com www.salestaxtexas.com

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