Ohio Sales Tax Audit

Is Your Business Under an Ohio Sales Tax Audit?

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Being notified and going through the procedure of an Ohio tax audit can be a daunting proposition. The process begins with your receipt of a Notice of Intent to Audit Books and Records from the Ohio Department of Taxation (ODOT). The auditor will be looking for violations of Ohio tax law and whether additional taxes, along with penalties and interest, can be assessed against you.

You should understand from the start that a Department of Revenue auditor’s job is NOT to help you accurately determine your tax liabilities.
THE AUDITOR’S JOB IS TO FIND ADDITIONAL TAXES DUE. It’s that simple. If the auditor can call into question an entry or record, they likely will — and often extrapolate that single error across the entire 3-year audit period, significantly increasing your proposed Ohio tax assessment.

What the Auditor is Looking For

For businesses, ODOT often targets instances where sales tax was collected from customers but not fully remitted to the state.

Collecting But Not Remitting Taxes

Collecting but not remitting Ohio taxes (Sales Tax or Unemployment Tax) is among the most serious violations under Ohio tax law. Penalties and interest are painful enough but failure to remit these taxes can also lead to criminal prosecution, including jail time.

Under Ohio law, these are considered “trust fund taxes”, and not remitting them is classified as stealing from the state. Both the business owner and employees involved can be charged with a felony under certain circumstances.

Representation During an Audit

Even if you believe you’ve been compliant, we strongly recommend that you do not represent yourself during an Ohio tax audit. Auditors have strategies that can limit your legal rights and increase your exposure.

It is essential to have a knowledgeable and experienced tax professional guiding you through each stage  from the initial notice to the final determination.

Ohio Tax Audit Protection

Desk Audit vs. Field Audit

ODOT will usually request either of the following:

• Desk Audit – conducted in one of their offices

• Field Audit – conducted at your place of business

You should say “NO” to either request or better yet, let us say no for you.
Do not let an auditor into your business. Make them come to your tax professional’s office.

We know how to control the audit, preventing the auditor from going on a “fishing expedition” where they try to uncover unrelated issues or broaden the scope unnecessarily.

Commonly Audited Ohio Taxes

• Corporate Income Tax

• Sales Tax

• Unemployment Tax

• Other taxes subject to ODOT review

Auditors typically request a range of business and accounting records and may ask questions beyond their legal authority. They might also try to get you to sign forms that are not legally required.

Our Expertise

We understand the tactics used by Ohio Department of Revenue auditors and how to counter them. With over five decades of experience as attorneys and CPAs, our firm is equipped to represent you, regardless of the type of tax under review.

The auditor has authority to:

• Assess additional taxes

• Impose penalties and interest

• Refer your case to the DOR criminal investigation division

While Ohio tax auditors are highly trained, their mission is to assume underpayment and build a case around it.

Don’t you want your tax professional to have more knowledge and experience than the auditors coming to scrutinize your business?

Call us at (888) 577-1482
Contact our attorney.

Frequently Asked Questions

What triggers an Ohio sales tax audit?
An audit is usually triggered by discrepancies in tax filings, complaints, or random selection. Receiving a Notice of Intent to Audit Books and Records from ODOT starts the process.

Can I handle an Ohio tax audit without professional help?
Yes, but it’s strongly discouraged. Auditors are not neutral parties , they aim to find additional tax owed. Handling an audit alone can limit your legal defenses and increase liability.

What are “trust fund taxes” and why are they serious?
These are taxes collected from customers (like sales or unemployment tax) that must be remitted to the state. Failing to do so is considered theft, and may lead to felony charges.

Should I allow an auditor to visit my business?
No. Always decline. Instead, have the audit take place at your tax professional’s office to avoid auditor overreach or unnecessary investigation.

What taxes are most commonly audited in Ohio?
Typically, Ohio audits target corporate income tax, sales tax, and unemployment tax , but other taxes may also be scrutinized.