Did authorities select you for an Illinois sales tax audit? Are you preparing for the possibility? Either way, we’re here to answer your questions.
Illinois Sales Tax Audit: What is an Audit?
An audit is a civil claims investigation. Illinois sales tax audits are probes into how much sales tax you’ve collected and calculate how much should be paid to the state. Additionally, sales tax auditors often explore employee reporting, use tax remittance, and payroll issues.
For the most part, case examiners are looking to answer one question: Have you paid the correct amount of tax?
Illinois Sales Tax Audit: Why Was I Picked?
The majority of people targeted for an Illinois sales tax audit are notified by letter. Upon receipt, you may ask: Why me!?
It can be one of two reasons:
- You were randomly chosen; or
- Something in your tax return looked odd to an agent, which triggered an investigation.
Read our blog on sales tax nexus to learn more about states’ sales tax laws.
Illinois Sales Tax Audit: What Can I Expect?
Your Illinois Department of Revenue (IDOR) audit notification letter will reveal what years the agents will examine.
At this point, the best move is to hire an Illinois tax lawyer. He or she will serve as an invaluable, experienced advocate and interact with the IDOR on your behalf. Don’t worry: hiring help is probably not as much as you think. Plus, the money you’ll likely save using a lawyer instead of representing yourself is generally well-worth the effort.
Your attorney will first assess if an irregularity triggered the audit. To figure it out, he or she will ask for sales journals and bank statements, in addition to documentation for untaxed sales, charitable gifts, resales, and interstate commerce.
A word of experientially gained wisdom: Even though the IDOR says it’s focusing on a sales tax audit, examiners will likely also review your income, use, and payroll taxes.
Your Rights As The Subject of an Audit
What rights do you have as the audited entity? According to the Illinois Revenue website:
“You have the right to know why we are asking for information, how that information will be used, and what will happen if you do not furnish the information.”
Illinois Sales Tax Audit: How Can I Best Help Myself Get Through This?
The ideal outcome of a sales tax audit is getting money back. The second best outcome is a “no change” letter. And the best way to ensure either is by working with a tax audit attorney. Our tax relief team has extensive experience negotiating with the IRS and Illinois Department of Revenue. We know what they’re looking for and how to best protect you from “gotcha” questioning and standard pitfalls.
It is the government’s job to hunt for tax revenue; it’s our job to save you from becoming prey.
Connect With An Illinois Sales Tax Audit Lawyer
Did you receive notification of an Illinois sales tax audit? Give us a call today. Our tax law team is here and ready to take over and deliver the best possible result!