The best time to contact our firm is when you’re first notified by an auditor of the California Department of Tax and Fee Administration (CDTFA) that he wants to schedule a sales tax audit. We specialize in controlling the audit from day one. We will assist you with a pre-audit of your business records, setting the boundaries of the audit with the auditor, making sure that the sampling of invoices or receipts is fair and restricted in scope to relevant items. In some cases, this has resulted in sales and use tax audits taking no more than 3 days.
“I hired Rex to help me prepare for a tax audit. He very clearly explained the process to me, which was important because this was my first audit. Rex then worked with me to put together my files and structure a cover letter presenting those files in a methodical way to the auditor. Most importantly, Rex was available throughout the course of my audit to answer my questions – and this really helped calm me down every time the auditor asked for additional information. I highly recommend Rex.”
Our vast sales and use tax experience has proven to be invaluable to our clients. Call us 916-444-0015 or schedule a consultation to find out how we can help you. The initial consultation is free.
Our Tax Audit Methodology
Having a Game Plan Before the Auditor Calls
We understand that an auditor has time constraints and we know that any auditor will appreciate our efforts in promoting a quick and easy audit. We will work with you to anticipate and prepare for potential issues and questions that an auditor may have. That is to say, we will strategize with you.
This begins with a pre-audit of your business to identify potential issues. We will then research the law, regulations, annotations and case law that pertain to your particular business. We will also ask about the skeletons in the closet. Throughout the process we will consider alternative but workable responses and strategies to the auditor’s proposed audit methodology.
Remembering the Golden Rule When Dealing with the Auditor
We make sure to treat the auditor as he would like to be treated. That is, we treat an auditor as a real person and not an adversary. This requires that we be prepared, respectful and professional.
Controlling the Audit From the Get Go
We will act as the audit coordinator and require the auditor to give all information and document requests to us. If desirable, we will provide the auditor with adequate workspace that is away from your employees.
Answering the Auditor’s Questions, But Saying No More & No Less
We will provide the auditor with exactly what he requests, but we will not volunteer any extra information or documents for the auditor to scrutinize. We do not want to invite the auditor’s suspicion; instead, we work with you to deliver only verified facts to the auditor.
Remembering that It is Far Easier to Keep a Questioned Item Off the Auditor’s Worksheets by Providing a Good Explanation Than to Get it Removed Later
Similar to a diet, it is easier to keep it off than get it off. We know how important it is to timely request a credit for any errors made when the original quarterly sales and use tax returns were filed.
Exhausting All Administrative Remedies Timely
We will make sure to timely respond to all requests for documents and notices from the taxing authorities. After all, your appeal depends upon it. We will also meet with the auditor and his supervisor whenever it is necessary or advantageous.
After the audit, we will request a complete set of the auditor’s work papers. If you disagree with the audit findings, we will file an appeal with the Board of Equalization once a Notice of Determination is issued. To do this, we file a Petition for Redetermination within 30 days of the date on the Notice of Determination. In that Petition we will request an appeals conference with the Appeals Unit and a formal hearing before the full 5-member Board.
If we do not prevail at either level, we will meet with you to discuss whether to file an appeal to a Superior Court. Such an appeal requires that the complaint be filed in a county that has an office of the California Attorney General.
Throughout this process, we will strategize with you as to whether to make a Settlement Offer or an Offer in Compromise. This will not impact your Petition for Redetermination except to hold it in abeyance while the CDTFA considers accepting the Settlement Offer or Offer in Compromise. If the Settlement Offer or Offer in Compromise is rejected, your appeal remains intact.
Learn More About Board of Equalization Tax Audits
- When To Consider Hiring An Attorney
- CDTFA Sales & Use Tax Audit Process
- How To File An Appeal With The Board of Equalization
- Tax Audit Statute of Limitations Explained
- How to prepare for a California Sales Tax Audit
We Have Experience Resolving Sales Tax Audits And Appeals
I sat on the 5-member Board of Equalization as the Deputy State Controller – Taxation from 1995-1998. Thus, my experience is rather unique amongst tax professionals. I have seen first hand how the Board of Equalization handles tax appeals from both sides. In addition, my staff includes a former BOE sales and use tax auditor who has successfully handled countless audits.
Our vast sales and use tax experience has proven to be invaluable to my clients. Call us 916-444-0015 or schedule a consultation so that we may assist you. The initial consultation is free.