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hi everyone i'm stephanie collins and i'm eric thomas from thomas thomas and thomas pc and also known as the sales tax sisters and this is the beginning of our second series which is basically devoted to audits and so um let's just get started normally when you are being audited for sales and use tax you get a nice lovely letter in the mail from the taxing authority letting you know that they are going to audit you and um in texas what normally happens is they let you know they're going to audit you and that an order will be contacting you to set up a time to to discuss everything and once they set up a time to discuss everything with you about when the fieldwork should start and things like that get some additional some preliminary information they send you a nice lovely letter with a laundry list of all the records that they are requesting and i think that that process is pretty much the same depend i think that process is pretty much the same across jurisdictions i do too and so you get that letter and quite honestly it can be a little bit intimidating because it's a lot of information that they're requesting typically they want uh the general ledger uh they want uh federal returns they want your sales and use tax returns as well as work papers they want access to sales invoices purchase invoices asset listings just uh bank statements financial statements it's a laundry list of things and so the simple thing to do is don't freak out just know that you need to give the auditor the information that they requested just start getting ready you know just start getting ready the thing about it is that until you talk to this person the auditor you don't know exactly what they're going to be uh asking you for so we've had people who call us up and they're just running chasing their tails trying to get every every every every you don't know what this you don't know what they're going to be asking you for yeah the letter is it's a standard letter and some of it may not be applicable to your business but the big thing is one note that you can't hide your head in the same thinking the audit is not gonna happen if you don't provide records and um they have deadlines like everybody else you need to start preparing and just start getting start getting the things that they've asked you for start getting them together so that when they do show up you have something yeah um and and the main point of this is our first video in the audit series um the one of the things that i wanted to make sure that we said upfront is that you want to give them what they ask for but you want to limit it to what they ask for there's nothing more annoying than on their end i'm sure then you ask for specific information and you get a whole lot of other extra information to go through to get to what you're trying to see you don't want to do that to somebody you really want to have it very professional have you very clean and from your standpoint as the company is being audited or the person who's being audited you really don't want to i know at one point there was an example of someone who didn't pull all the information together and make it clean and and say hey here's here is this piece that you're looking for they sat this person down in their computer system and just said oh take what you need you don't want to do that either because again number one the person didn't ask you to see all that so you're making their job a little bit harder number two if you did something wrong that they would not have noticed if you had not given them the keys to the kingdom you're not helping yourself out either no so it's just it's a case of they let you know the records they want to see they let you know the period of time they want to see it don't give them extra stuff yeah don't if someone if your art period is 2016 to 2020 don't give this person 2014 exactly they're not interested in it and you're just wasting time exactly exactly but you don't know what that 2014 transaction may tell them about what's happening in 2016. exactly it's just you're opening pandora's box so the best bet is to give them what they request and only what they request and if you need help because again we do this you know we do our representation if and which is how we can talk to you about it if you need help say that you need help as quickly as you know it and then you get it because that stephanie said it's not going away no you can make it worse yes uh you don't want a situation where an auditor says well you know i'm going to estimate how much you owe because i don't have any records from you and you and you not even attempted to give me anything you don't want that brush paint you don't want to be painted with that brush of being a difficult a difficult taxpayer so it's just easier to just act as professionally as possible give them what they need to to conduct the audit and and you know address issues as they pop up and they're going to tell you the time frame under which they want the information so give them only what they want within the time within the request within the requested time frame exactly and you will be good now that's not going now if you owe money you know your own money but it's another story that is another story so i think that's it for this first video if you have any comments any questions please let us know and thanks again for clicking on the video we love subscribers and we love questions so i that's the first one some more will be coming thanks have a good one if you like it please thumb it up true and consider subscribing yes bye