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Sales Tax Audit Defense

A specialized matter handled by a CPA firm.

Direct representation, not advice from the sidelines.

The short version

Audit defense is representation against a state's proposed sales tax assessment: contesting the sample, the projection, the penalties, and the number itself.
A proposed assessment is not the final word. There is a defined window to petition before it becomes final and collectible.
Most defense value comes from the method, not pleading. Showing the sample was unrepresentative or the projection overreached is what moves the number.

The audit ran, and now there is a number: additional tax, penalty, and interest, often built from a sample projected across years. That number is a proposed assessment, not a final bill. You have a limited window to contest it, and missing that window turns a disputable assessment into a collectible debt.

Its length varies by state: California gives 30 days to petition for redetermination, while New York allows 90 days to petition the Division of Tax Appeals. Miss whichever one applies and the assessment is final. Audit defense is the work of contesting that number on the merits and protecting that deadline.

What audit defense covers

Reviewing the auditor's workpapers to see how the sample was chosen and how the projection was built.
Challenging the sample where the period or transactions used were not representative of normal operations.
Contesting the projection where applying the sample rate across the full period overstates the result.
Disputing penalties that do not fit the facts, including negligence findings.
Filing the petition for redetermination and carrying the appeal through the state's process.

The leverage is technical: an assessment is only as strong as the sample and method behind it.

How an audit defense runs

Get the workpapers and the deadline

We pull how the auditor reached the number and pin the date the petition is due, because that date governs everything.

Build the challenge

We test the sample, the projection, and the penalties against the records and the law, and assemble the evidence that the number is wrong.

File and pursue

We file the petition in time and carry the appeal, negotiating the assessment down where the case supports it.

How sales tax audit defense lowers the number

An assessment comes down when you show the sample was unrepresentative, the projection overreached, or the penalty does not fit, each with records behind it. Arguing that it is unfair does not move the number.

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Protecting that date is the first thing a defense does, before any argument about the sample. The strongest case is worth nothing filed late.

What an audit defense costs

Cost depends on the size of the assessment, how the sample and projection were built, the number of issues contested, and whether the matter resolves at the petition stage or goes further in the appeals process. We size it after reviewing the assessment and the auditor's workpapers.

When you need audit defense now

You received a proposed assessment and the petition deadline is running.
The assessment was built by projecting a small sample across several years.
You were hit with a negligence or other penalty on top of the tax.
The sample period the auditor used does not reflect a normal stretch of your business.
You disagree with the number but are not sure how to contest the method behind it.

Every one of these comes down to one date. Miss it and the number is final; act while it is open and everything stays contestable.

Contest the number before it is final

You do not need to know what is wrong with the assessment before you call. Finding that in the workpapers is the work. What matters now is moving before the deadline does.

This page provides general information about contesting a sales tax assessment and does not constitute tax, legal, or financial advice. Any result depends on the specific facts, the records available, the assessment itself, and each state's process, so no particular reduction or outcome can be guaranteed. Petition and appeal deadlines are strict and vary by state; consult a qualified Dimov Tax professional about your own notice before the window closes.

Sales Tax Audit Defense

Tell us your notice date and we will tell you what can be contested and protect your petition window. You can share the assessment and workpapers at the next step.