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Texas 1099 K Sales Tax Audit Attorney

By December 7, 2023March 27th, 2024Texas Sales Tax

Texas 1099 K Sales Tax Audit Attorney


What is a 1099 K sales tax audit?

If you are undergoing a sales tax audit and you do not have adequate books and records, the auditor may just give up and take the 1099 K that was provided from your merchant services company and apply the full retail sales tax rate. It sounds unfair, but it does not end there. The auditor will then “gross up” cash sales. Essentially, if you are retailer A, then, they will take the average of cash sales in your industry and in your zip code and assume that you simply had that much more in gross revenue from your cash sales that were entirely unreported. For example, if your 1099-K reads $1,000,000 in gross sales, then, they will add another $100,000 in presumed gross sales if that the Comptroller believes that the average gross sale in your industry and your locale is 10%.

Facing a sales tax audit in Texas? Contact our attorney for a consultation.

Ansari Law Firm

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