About State Tax Audit Assistance
State Tax Audit Assistance Services are generally provided in conjunction with audits by state and local taxing authorities. These services include support for audits of income tax, sales and use tax, and others audits and are usually a part of other services, including State Tax Research, and State Tax Negotiations.
Pre-audits or Self-audits are useful in discovering and correcting compliance issues prior to an official audit by state tax authorities. A successfully managed audit is always much less time-consuming and far less expensive than appeals and litigation. If an audit is already in progress, negotiations can help limit the audit scope, thereby saving time and money.
State tax audit assistance services are provided for the following types of audits:
- Nexus Audits
- Sales and Use Tax Audits
- Income and Franchise Tax Audits
- Managed Audits and Self-Audits
- "Reverse Audits" for tax refunds
- Audits by State Tax Compacts
- Multistate Tax Commission (MTC) Audits
Audit services can include negotiations and agreements regarding sampling methods and procedures (for sales and use tax audits) or compromises regarding apportionment factors ("factor relief" for income tax audits). Negotiated audit agreements can prove useful for many years after they are initially negotiated and put in writing.
How We Can Help with State Tax Audit Assistance
Our state tax audit assistance services, like all of our State Tax Services, involve careful and complete research that complies with the AICPA's Statements on Standards for Tax Services (SSTSs), which are enforceable tax practice standards for members of the AICPA. State tax auditors and administrators trust that we are competent and thorough in our fact-gathering, research, assessment and formulation of proposed audit resolutions. We are familiar with the way state tax auditors and administrators handle various types of state tax audits, and we utilize a synergistic approach, rather than the combative or confrontational approach that many attorneys and other consultants use.
In performing state tax audit assistance services, our tax professionals can help with all of the following:
- Responding to nexus determination surveys
- Computing sample size and sample selection
- Negotiating and drafting audit agreements
- Researching state tax issues under audit
- Obtaining appropriate exemption certificates
- Drafting letter rulings for audit positions
- Obtaining factor relief for apportionment of income
- Many other items with potential for favorable audit outcomes
Audit liabilities can be reduced and further negotiations conducted to mitigate the effects of any potential future liabilities. In addition, we can assist clients in obtaining state tax letter rullings from various state tax authorities. These letter rulings can be valueable in protecting the client from potential liabilities that would otherwise apply due to a change in tax administration or audit personnel.