Business personal property tax audit firms, who are hired by county taxing authorities, know that the audit process is confusing and that most business owners will give up and pay the fines. Discoveries made during the audit process bring in a lot of money. Penalties can be as high as 60%.
Generally, states have a mandated audit requiring business personal property to be reviewed periodically. Typically, these cycles include a small number of businesses and tend to be those that have higher tax assessments; the intent being, to audit every business within a certain period of time.
It has become more common in the last decade for counties to hire third party firms, who specialize in business personal property audits, to perform their work. Counties turn to third parties because they do not have the time, money, or people to perform audits internally. Anytime an outside firm is hired to perform an audit there can be an ethical issue regarding independence. That is to say, is this third party incentivised to do what is fair for the taxpayer or for themselves. This is an important question that is often overlooked when county commissioners hire audit firms to perform the reviews.
Third-party auditors are often paid based on the number of audits performed, and they can select who will be audited. This agreement creates another complex ethical question for both the county and the auditor.
On top of these ethical questions, being audited can be a stressful time. Without full disclosure from the counties and the audit firms they’ve hired, how can the average taxpayer know what is required of them or what protections they have?
THE AUDIT PROCESS TYPICALLY FOLLOWS A NUMBER OF MAJOR STEPS:
- Letter of intent to audit from the county
- Letter requesting supporting documentation from the Audit firm
- Discovery/No Discovery Letter
- Appeal
- Resolution
At Sharon Lyall, CPA., we provide experienced tax professionals to manage your audit and work directly with the taxing authorities as your partner.
During the audit process, we become intimately familiar with all of the data, such as prior tax returns and fixed asset listing, required for the audit.
ON YOUR BEHALF, WE SUPPORT AND MANAGE THE ENTIRETY OF THE AUDIT PROCESS, INCLUDING:
- Defending your property tax return
- Providing the auditing jurisdiction with necessary or requested information
- Finding opportunities to mitigate audit expenses
- Providing support for auditor-requested site visits
- Managing the back-end of the audit process
- Initiating audit appeals for unsatisfactory audit results
We identify areas of non-compliance, tax reduction opportunities, and solutions that will mitigate future overpayments.
If your business is under an audit we are here to help you through the process.