Did you know that auditor findings of improper or inadequate tax payments have been linked to the demise of some organizations, despite their best attempts at compliance? The average audit penalty costs around $34,000, but the penalties can go as high as hundreds of thousands of dollars. Despite a company’s best effort to be in compliance, many small and medium sized business owners are not aware of their audit exposure, and do not take necessary actions to address exposure until an audit occurs.
Reactive sales tax compliance methods that rely on manual reporting and systems open up exposure for a business and increase audit risk. Reactive processes are just one trigger; inconsistent reporting compared to others in your industry can also trigger an audit. Tax auditors who represent our cash-starved state governments give companies little latitude when it comes to compliance. Thus, despite today’s tough economic climate, state taxation departments continue to increase their collections by scrutinizing sales tax payments.
The truth is, there are just
Sales tax automation might not help you avoid an audit, but it can help your business reduce audit exposure and minimize the impact on your business in the event of an audit. Automation provides a consistent, documented, and predictable process, which is exactly what state examiners want to see.
Learn more about how you can avoid unintentionally pulling one of the triggers that could lead to an audit notice by downloading our