Audits. The word alone strikes fear and anxiety into the hearts of many citizens. If you own and operate your own business, tax audits can be a major source of stress. While the IRS has been known to conduct audits on businesses across this great nation, states such as Maryland have aggressively conducted operations on local entities regarding sales and use taxation. Understanding tax law can be challenging enough for anyone, and entrepreneurs facing tax audits have to deal with additional complexities in order to resolve their case to avoid tax evasion penalties. As your team of certified tax attorneys in Maryland, JDKatz is here to help you navigate this complicated process. With decades of experience in Bethesda and Washington D.C., our legal team is ready to construct a personalized plan to optimize your outcome when facing tax issues.
Maryland’s approach to sales tax audits make this sort of ordeal more common than you might think. Today, we’ll continue to look at the Maryland Sales Tax Audit Program and how it can affect your business. If you need professional tax advice and litigation, be sure to contact our firm today.
Your Initial Tax Assessment is Probably Incorrect
The complex methodology used to determine your tax liability often results in inaccurate figures that may overstate or understate the true amount. Maryland’s Comptroller Office utilizes a system that has been known to fall victim to:
- Basic math errors
- Block sampling errors
- Misapplied formulas
- Use of straight line growth formulas
While these errors are understandable from a human standpoint, the consequences can end up taking a major toll on the business owners and taxpayers involved. Our knowledgeable tax attorneys will be able to help you interpret and correct any issues found, delivering an accurate report that may prove very helpful in reducing your tax burden.
Ambiguous Purchases Often End in the State’s Favor
One important notion to consider when facing an audit is that any purchase that does not come with a proper invoice will most likely be deemed a taxable amount. Regardless of the true nature of this transaction, a lack of proper bookkeeping will result in a favorable result for the State. The outcome of your audit can vary a great amount depending on the auditor’s methods for completing their job. It’s important to keep accurate, complete records of all transactions in order to minimize the ambiguity that can plague your audit process. Our knowledgeable tax attorneys can prove to be an invaluable resource when guiding you through this stage of an audit.
Minor Mistakes can Add Up
Unfortunately, the errors born from your auditor’s methodology can prove very troublesome when dealing with minor bookkeeping mistakes. Sometimes, these small errors can lead to multiple charges against the entity being audited. If your audit counts the same mistake numerous times, the ending result can prove to be disastrous for the taxpayer in question. It’s important to work with a team of tax experts to look through the audit and amend any discrepancies in the report.
Results may Vary
One common occurrence happens when a citizen receives the report from their state auditor. Upon seeing the figures and numbers, many citizens will accept the results and sign to begin working on restoring that good standing. It’s important to know that the complexity and lack of quality assurance in the industry may lead to incorrect figures. Simply put, your auditor may not be correct in their assessment of your tax liabilities. It’s important here to find legal help to check and double-check the results.
Effective Tax Risk Management
Whether through an accident in reporting or a lack of planning, many business owners fret over the outcome of their operations if they were to be audited by the state. It’s important to conduct proper financial operations, including accurate and comprehensive bookkeeping, to keep your company protected in the event of an audit. Tax law is inherently complex, creating issues with taxpayers and auditors alike. Hiring a team of tax attorneys for your Maryland business can prove to be a very beneficial move for your business.
From simple tax advice and assistance with record keeping to litigation against IRS fraud, our legal team is here and ready to help your case. Our personalized approach to tax law enables our attorneys to help your situation to the best of our abilities, clarifying errors and providing staunch legal representation. Contact us today to see what our legal firm can do for you.
