A California sales tax audit is really a technique where tax authorities conduct an audit of your organization to ensure you are filing accurate income tax information. The IRS and other taxing agencies often conduct such audits and it is important to understand how to handle the problem if your organization is subject to one.
Basically, sales tax is collected from consumers in the shape of an invoice or receipt. You should report all sales income on your own tax return. These sales must certainly be reported in a reasonable manner and in respect with applicable laws. By properly filing the taxes, the IRS can ensure that your business is getting the fair share of the total taxes collected.
A sales tax audit is conducted by a person or agency that specializes in conducting a specific form of audit. Put simply, these auditors will consider the current records and search for discrepancies. The goal of the audit would be to verify that all of the taxes you’ve paid were in fact filed correctly.
Since California sales tax is based on the value of the product being sold, which means if the tax stamps are too large, the audit could uncover a discrepancy. This will result in an adverse outcome for your tax return.
Typically, you’ll receive your tax forms and a receipt. You should then file the necessary tax forms with the county office in your area. When you’re not sure when you yourself have been audited, you may also call the county office to confirm in the event that you are in fact being audited.
It is recommended to help keep copies of tax forms you receive. In this manner, if there is a challenge during the audit, you may have the necessary documentation to exhibit that you will be not liable for any taxes. If you should be audited, it will help the auditor find some loopholes in your tax return and fill in the gaps.
Should you choose, get yourself a sales tax audit, you can protect yourself. Ensure you pay all taxes on your debt and never give out any information to an auditor without their approval. If you should be found to stay the incorrect, you can be hit with a civil penalty and lack of business.
The IRS and other taxing agencies may use different methods for conducting a sales tax audit. Should you feel you’ve been audited, speak by having an accountant to ascertain the source of the audit.