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Sales & Use Tax Audit Extentions

Similar to other companies, we have been getting our share of sales/use tax audits. Upon showing up, the auditors automatically ask for an extension so they can audit another year. I have to this point refused to sign and extension. I am ok with an extension if the audit drags out for good reasons, but showing up and extending an audit year seems out of line. Anyone out there with similar experiences and what have you done?


Topic Expert
Christie Jahn
Title: CFO
Company: Prime Investments & Development
(CFO, Prime Investments & Development) |

We had a S&U Audit last year but once the auditor saw there was nothing to be concerned about he left. If they didn't find any cause of concern with the years they have already looked it, I may inquire as to the need to keep digging.

Sara Voight
Title: Controller
Company: Critical Signal Technologies, Inc
(Controller, Critical Signal Technologies, Inc) |

My response would be to let them know no extensions unless the current audit turns up material issues. I have been in two situations with very different processes. In basic retail, things were black and white and the auditor could see everything clearly and undersrtood it would be a waste of time to continue. In a dsitrubution environment, it became much more challenging to locate a transaction that was not a pass-through and therefore not eligible to be taxed. The auditor determined they had a migraine as they worked through the original time frame and unless they found something, they also passed on the opportunity to extend.

Topic Expert
Patrick Dunne
Title: Chief Financial Officer
Company: Milk Source
(Chief Financial Officer, Milk Source) |

I can give everyone an update as my approach worked. Both audits did not pursue the extension after I asked for reasons for the extension. They closed the audit and in both cases, we had no assessment.


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