TEXAS SALES TAX AUDIT DEFENSE 

Like most states, Texas will often audit a business for sales tax. The audit typically starts with a phone call or a letter from the Department of Revenue.  However, you have been contacted, a Texas Sales Tax Audit can audit 4 years of your business activity from when a return was filed and even farther back if sales and use tax returns have not been filed. The slightest error on a type of transaction, when multiplied over four years, can add up to a considerable amount of sales tax liabilities. Often times a sales tax audit can be driven purely by simply not having the correct paperwork can result in a huge assessment.

In Texas , a sales tax audit begins with a notice from the Department. 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 taxpayer’s 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 an attorney represent you during your audit.

Following the audit, if you disagree with the adjustments cannot be resolved with the auditor, an assessment is issued. It is critical that if you wish to protest the assessment, you must do so within 30 days by fling a Petition for Redetermination Hearing and Statement of Grounds. If you do not agree with that decision you can file for reconsideration with the judicial court system within 30 days of the redetermination decision. While it is not required, it is often adviseable to have an attorney handle your case in Texas ’s administrative court.