Sales Tax Audit Representation & Defense
You have been selected for an audit.
Seven of the most dreaded words in the business world. In recent years, audit frequency has only increased. It is an inevitability that your business will eventually be audited for sales and use tax compliance. How will you handle it when a state comes calling?
Experienced sales tax audit representation mitigates the risk associated with sales tax audits and reduce the burden on in-house staff. At Agile Consulting, we have extensive experience working with state revenue auditors in all U.S states, aptly positioning us to defend your company.
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Do You Need External Sales Tax Audit Defense Assistance?
Many businesses choose to move forward without external sales tax audit defense representation, but those that do are almost certainly not achieving the best outcome. Since our inception in 2005, Agile has never been hired on a sales tax audit defense project and not found reductions or savings for our clients. Further illustrating the value an external sales tax audit defense team brings to the table, roughly 67% of our sales tax audit defense engagements are with companies who performed an initial review of the state’s workpapers and schedules prior to engaging Agile.
Even in those circumstances, our track record is perfect! We’ve always brought new and original ideas to the sales tax audit to deliver additional reductions or savings to help achieve better results for our clients.
Our sales tax audit defense engagements can be divided into two distinct categories.
Clients, which have:
No in-house sales and use tax support
Success rate of delivering savings: 100%
Most commonly cited benefit of working with Agile:
Immediate upgrade of technical knowledge in an area of prior weakness
Existing in-house tax teams
Success rate of delivering savings: 100%
Most commonly cited benefit of working with Agile:
Unique & original ideas presented by Agile
Our Sales Tax Audit Defense Strategy
Agile employs a two-pronged sales tax audit defense strategy:
Review The State’s Workpapers & Schedules to Reduce Liabilities
First, we review the state’s provided audit workpapers and schedules to ensure you are receiving the most favorable interpretations and we are in agreement with any liabilities or deficiencies identified.
Next, we research relevant case law and rulings to find those that most accurately represent the situation and circumstances facing your business.
Finally, if needed, we collect additional documentation. A lack of relevant documents is one of the primary causes of erroneous taxation. If all required invoices and supporting documents cannot be found in your records, we will contact your suppliers and vendors to gather the required documentation.
Quantify Sales & Use Tax Refunds to Further Reduce or Eliminate Liabilities
Concurrently with our efforts to reduce the liabilities or deficiencies identified by the state auditor, we review your business’ purchases to identify occasions where sales and use taxes have been over collected or overcharged. In nearly every sales tax audit defense project we identify overpayments overlooked or ignored by state auditors.
Once all supporting documents and sales tax law citations are gathered, all potential sales and use tax refunds are scheduled, quantified and submitted to the auditor to be included in the audit. Refunds provide an impactful offset to liabilities, interest and penalties. In fact, a dollar’s worth of refunds identified during an audit is worth more to your business during an audit than at any other time because it offsets liabilities identified by the state auditor, reduces interest assessed on those liabilities and reduces or eliminates non-compliance penalties charged by the state on audit assessments.
State auditors don’t want you to know these secrets about sales and use tax audits:
Agile experts turn audit assessments into fund recoveries.
Our ultimate goal is to turn every audit assessment into refund recoveries for our clients. 
While that cannot always be accomplished, with Agile’s experts supporting your business, audit selection can become a profitable opportunity. On many occasions, we have turned preliminary audit assessments into net refunds for our clients.
Here’s what several of our clients have to say about such experiences:
"Unbelievable - the state tried to assess us nearly $2M in underpaid sales & use taxes, but you flipped that result into a net refund of $1M!" - CFO, For Profit Hospital
"Great job! You've made a large difference." - President, Industrial Contractor (after $82k reduction in GA audit assessment)
"Total reduction of $73,459.82 in the TX audit. GREAT! Going forward I know we will surely use your services again." - Asst. Controller, National Retailer
Tax Audit FAQs
Latest Insights
Find the sales tax exemptions for your state
We’ve compiled state-specific research regarding the sales and use tax exemptions available in each state. You’ll also find helpful links to sales and use tax related content for each state revenue agency.
Ready to get started? Speak with an expert!
