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Sales & Use Tax Audits: Working with a CPA

Download this article here: CPA Questions.

Sales and use tax is a highly specialized area of accounting, which is why, when faced with a sales and use tax audit, business owners should consider working with a Texas sales and use tax audit consultant that specializes exclusively in these complex tax areas.

If you are considering working with a CPA for your sales and use tax audit, be sure to ask him or her the following questions; or if you are a CPA considering engaging in this area of tax practice, ask yourself the following questions:

1. Do you have intimate and up-to-date knowledge of the State of Texas sales and use tax laws and how they are applied to the specific business in question?
2. How many sales and use tax audits have you defended?
   1. What types of businesses (contractor, retailer, etc) have you represented?
   2. Can you provide three references from clients you have represented where the state auditors said a large amount of tax was owed and through your efforts, navigating the appeals process, this amount was dramatically reduced or brought to zero?
3. What steps do you take to prepare for a sales and use tax audit, and how will you ensure your clients receive proper representation?
4. Is it possible that an auditor may indicate that the client owes a significant amount of money on an audit when in actuality the client does not owe that money?
5. What is a statute waiver and when is it appropriate to sign one or not to sign one?
6. As a CPA, if you have a question or need advice during a sales and use tax audit, whom would you lean on?  What is their background and experience in sales and use tax audits?
7. Are you aware of a program with the State of Texas that allows a business owner to invoke his or her right to remove the agency from the audit and do it himself?
   1. Why would a business owner want to or not want to take advantage of that program?
8. What is the one mistake that a taxpayer can continually make over and over again that would cause his or her sales tax audit to go on for years?
9. As a CPA, do you feel confident that you are the best person or organization to handle this audit on a client’s behalf?
10. As a CPA, if a business owner hires you and that person is not satisfied with the results at the conclusion of the audit and chooses to hire another firm to assist with reducing the audit, are you willing to split that firm’s fee with the client?

The above questions are important questions to ask a potential CPA prior to hiring him or her to represent a business owner in a sales and use tax audit. CPAs should be fully prepared to answer these tough questions in order to demonstrate that they are in fact the right firm to handle the audit.

Streamline Tax works with businesses of all sizes and also partners with CPAs to ensure that sales and use tax audits are completed efficiently and effectively.

Contact Streamline Tax to assist with your sales and use tax needs.