You’re Audited. Now What?
What to expect when you receive an audit notice
Despite all of the systems and meticulous processes put in place to avoid a sales and use tax audit, auditors will most likely come knocking at some point. The good news is that automation can provide a solid audit trail. This makes it easier to address and correct any errors to avoid problematic future sales tax filings.
When you get an audit notice, here are some steps to take:
- Review documents supporting deductions taken;
- Review sales tax accrual accounts;
- Review expenses;
- Review use tax liability/accrual accounts;
- Review purchase invoices to verify that the seller’s use tax has been charged or consumer’s use tax has been accrued; and
- Be prepared before the audit process starts, as it will make the audit process go smoother and can aid in bringing the audit to an early conclusion.
If your company has been previously audited, revisit the previous audit documentation to ensure that any concerns noted at the time were addressed. Knowing what auditors are going to find before they perform the audit will enable you to be proactive. For more information on audit triggers, check out our blog post here.
If you are considering cloud-based automation for your company, check out our solution and schedule a demo to see what Vertex can do for you.