If you have a sales tax liability in the State of Texas, you can appeal the auditor’s findings. An independent audit review, redetermination hearing, and a filing with the Texas Comptroller’s Office of Administrative Hearings are all options that you have. Remember to file on time!
Transcript
What Happens After the Sales Tax Audit?
When your auditor completes the sales tax audit of your company and shows you the actual amount owed, you still have three stages left of your appeal rights.
Exit Conference
At the exit conference, all the facts and figures will be reviewed by the auditor.
Reconciliation Conference
Next, there’s something called a reconciliation conference, where the audit manager will review any unanswered questions about your audit.
Independent Audit Review
If that doesn’t resolve your concerns, you can ask for an independent audit review. This is where a third party will assist in trying to solve any issues.
Redetermination Hearing
If the independent review does not resolve the dispute, you can opt for a redetermination hearing.
At the redetermination hearing:
- You will present all of your findings in a statement of grounds.
- You can list all of your issues.
- Provide substantiating law and documentation.
Filing with the Administrative Hearings Office
If the redetermination hearing still does not resolve your case, you can file a case for the Administrative Hearings Office.
At this stage:
- You would be working with the attorneys at the Comptroller’s Office to come to the correct liability.
Critical Considerations for Your Appeal
What’s most important is that you need to take a position.
You can never challenge an audit by simply asking questions, such as:
“How did you arrive at that number?”
You must have:
A clear, defined position
Supporting law
Supporting documentation
Frequently Asked Questions
What is the first step after a sales tax audit in Texas?
The first step after a sales tax audit in Texas is the Exit Conference, where the auditor reviews the findings with you, including how the tax liability was calculated.
What is a Reconciliation Conference and when does it occur?
A Reconciliation Conference is a meeting with the audit manager to address any remaining questions or unresolved issues from the audit. It typically occurs after the Exit Conference if the taxpayer disagrees with the initial findings.
How does an Independent Audit Review work?
An Independent Audit Review involves a third party who reviews the audit to help resolve disputes objectively. It is requested when issues persist after the Reconciliation Conference.
What happens during a Redetermination Hearing?
At a Redetermination Hearing, you formally present your case, including a written statement of grounds, legal arguments, and supporting documentation. This is a more structured and legalistic stage of the appeals process.
Can I still appeal if I disagree after the Redetermination Hearing?
Yes, if the dispute remains unresolved, you can file an appeal with the Texas Comptroller’s Office of Administrative Hearings. This is the final stage where attorneys review your case to determine the correct tax liability.