Question : Should the state auditor who recently performed an audit of our company have given us credit for any overpayments of tax our company made during the audit period?
Answer : Theoretically, yes; but in all likelihood the auditor probably did not. Auditors usually give credit for a few de minimis items, but generally they do not look at the transactions to identify refund opportunities for your company. If you have recently been through a state audit, it is an ideal time to do an internal review or bring in a Sales & Use Tax consulting firm to review the audit and your other records to look for refund opportunities.
Question : Is it really more beneficial to bring in an outside consultant to perform a reverse Sales & Use Tax audit?
Answer : You can attempt to recover any overpayments of tax on your own, but there are two reasons why using an outside consultant is typically a better solution. First, consultants perform these reviews on a daily basis and are more familiar with the details. Second, you and your staff most likely do not have the time or resources to dedicate to the review the same way that a consulting firm would.
Question : If I perform the review myself rather than hiring a consultant, won't I receive a larger refund since I will not have to pay the consultant's fees?
Answer : Generally speaking, a good consultant will identify more refund opportunites than if you were to perform the review with your in-house staff because of the familiarity a consultant has pursuing these refunds on a daily basis. Even net of the consultants fees you should receive a larger refund.
Question : If I file a refund request, will it trigger an audit?
Answer : No, it will not necessarily trigger a full audit of your company. Frequently, the state will ONLY audit the records submitted with the refund request and will not perform a complete audit of your records. Regardless, if you are due a refund an audit is nothing to fear, however, prior to filing any refund requests with the state, you should look for possible liabilities and tailor your approach based on the specific circumstances.