Millions of dollars in sales tax audit assessments have been made as a result of store owners and their accountants not keeping “adequate” records. How do you know if your records meet the test? NYS has hired over one thousand new auditors during the past year. The auditors are being encouraged to produce tax assessments to help close the budget gap. If you are not 100% confident that your records qualify as adequate according to NYS Tax Regulation and Case Law, you may be set up for a disaster. You must improve your system immediately. Do you have a point... Continue reading

In an effort to collect money from unsuspecting business owners, NYS has increased the number of desk audits they are performing. Letters are being sent to businesses stating that “taxable sales reported on your New York State sales tax returns for the above audit period may be understated” based on information received from your suppliers? The letter goes on to say they are conducting a limited scope audit. If you have received such a letter, it is very important that you respond within 30 days and, most of all, respond correctly. You may not need to send any detailed information,... Continue reading

Adequate records are very important to keep, but who defines what is adequate? The answer has to do with whom you ask. As a business owner, you may be interested in sales by category or sales by specific product. Some owners only care about total gross sales or total deposits to the bank. Sales tax auditors have been known to make an early decision that the sales records maintained by the business are inadequate. The reason behind this often premature determination is that it enables the auditor to use data from outside the business to calculate a sales tax deficiency.... Continue reading

You see the return address, New York State Department of Taxation and Finance. You just know the envelope contains a notice you wish you would never receive. Your palms shake, you break out in a sweat, your heart rate soars. You are not alone, This is the initial reaction most business owners experience. This may be the beginning of bigger problems unless you know what to do. The New York State Tax Department has become much more aggressive over the last few years. The keys to success from this point are the quality of your records and the actions taken... Continue reading

I had the “privilege” of defending a retail jeweler client of mine in a recent sales tax audit. After reviewing my client’s records and finding that they were properly kept, they sought to send letters to the jeweler’s customers requesting information about purchases that were shipped to them. It wasn’t enough in the mind of the auditor that my client kept excellent records. You can foresee the negative reaction a business' customers would have to a letter asking questions about a purchase they made. They might even decide to take their business elsewhere attempting to avoid confrontation. Many retail jewelers... Continue reading