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Sales Tax Problems
Is the State Board of Equalization (BOE) auditing you? Are you looking for a tax attorney that is ready fight and defend you against the BOE? The tax attorneys at Bismark Tax, Inc. have experience handling sales tax issues and can help you with your sales tax audit. An audit by Board of Equalization can feel like an overwhelming crisis. The audit is invasive, high maintenance, exhausting and high demanding. Essentially, the government is looking to make sure that you or your business reported all of your sales, which require a collection of sales tax.
The Board of Equalization administers California’s sales and use tax. In general, for retailers engaged in business within the state, sales tax is imposed on tangible personal property that is sold at retail. Retailers are required to determine their taxable sales, calculate their sales tax liability, and report this liability on their sales tax return. Periodically, the BOE selects certain retailers for a sales tax audit.
The purpose of the audit is to accurately determine the amount of sales tax owed. The BOE determines this tax liability by examining business records that show gross receipts that are subject to sales tax. These records include, but are not limited to, cash receipts, general ledgers, invoices, bank statements, as well as any other business documents that substantiate the taxpayer’s sales tax payments. In addition to examining business records, a BOE audit may also include various sampling tests to determine the tax owed. For instance, a sales tax audit of a restaurant or bar may include a “pour test,” which is an undercover observation of the amount of alcohol being poured into each drink. The results are used to determine the establishment’s expected taxable sales from alcohol.
For businesses that may lack adequate records, our sales audit tax attorneys can advise you on whether your records are sufficient. Additionally, in some instances where adequate records are unavailable, our sales audit tax attorneys can guide you through the process of lawfully reconstructing those records. At the conclusion of the audit, if any erroneous sales tax audit adjustments have occurred, our attorneys will intervene on your behalf and do everything possible to have these errors removed. If you do not agree with the initial audit findings, we can file a petition for an appeals hearing, file a petition with the settlement division, or petition for a hearing before the 5-member Board.
Ultimately, it is important to take proactive steps to ensure the BOE’s sales tax assessment is correct. If the BOE’s assessment overstates your gross receipts, this information may be shared with other agencies, such as the IRS or FTB, which could potentially trigger an audit by those agencies as well. Additionally, taxpayers who do not pay the amount owed may be subject to levy, revocation of your seller’s permit, or even civil warrants that authorize law enforcement to collect the contents of your cash register. For corporate taxpayers who are unable pay the tax owed, the BOE does have the authority to assess individuals personally. This personal liability may extend to officers, shareholders, as well as other persons who oversee the filing or payment of sales tax for the company (including CFOs or controllers).
The best thing about hiring our company for audit representation against the BOE is that you do not have to show up to the audit. Clients, primarily, wish to not show up and that is ok. Sometimes we will need your assistance at the audit exam, but for the most part our attorneys will handle the audits on their own. Bismark Tax, Inc. will handle all parts of the audit, so that you can go back to work and most importantly be able to sleep comfortably at night. Please give us a call for a Free Consultation (855) 829-6055