In Texas, the Texas Comptroller of Public Audits routinely conducts invasive Sales & Use Tax Audits and Excise Tax Audits of Texas businesses. It is not uncommon for a large company to be under a tax audit by several states at the same time.  We have experience representing clients in audits of the following types of taxes:

  • Sales & Use Tax
  • Direct Pay Sales Tax
  • Franchise Tax
  • Mixed Beverage Tax
  • Severance Tax
  • IFTA Tax
  • Hotel Occupancy Tax
  • Motor Vehicle Taxes

Auditors usually request large volumes of transaction data and vendor file access to complete audit field-work. Effectively navigating the audit process is essential to successful, favorable results. Xcellent Tax offers several tax audit services to our clients:

Audit Defense

Xcellent Tax works closely with the state auditor throughout the audit.  All audit findings are reviewed for merit with defensible positions presented by Xcellent Tax to ensure sales tax law is interpreted in the client’s favor.  The audit process is lengthy, requiring in-depth knowledge of sales tax law and how it specifically applies to a client’s operation.   Often, Xcellent Tax may conduct a Reverse Audit for the audit period under review resulting in a reduction in any sales tax liability or an overall refund for our clients.

We have the capacity to assist clients in the initial gathering and presentation of financial statements, formulas, and presentation of information and documents. We handle all communication between our clients and the field auditors representing the state. We review all methodologies used by the state for determining their markups and explain these to our client. We zealously advocate for our clients best interest throughout the processes. Often, we assist our clients in reaching reasonable settlements and payment plans with the State.

We assist clients in sales and use tax audits as well as audits in the following fields:

  • Franchise Tax
  • Mixed Beverage Tax
  • Severance Tax
  • IFTA Tax
  • Hotel Occupancy Tax
  • Motor Vehicle Taxes

Due to the fact that we have attorneys and CPA’s on staff, we are able to assist clients in the presentation and analysis of financial statements and information, as well as zealously defending them to make sure they are being treated fairly.

Reverse Audit / Overpayment Reviews

A Reverse Audit is a proactive exercise to identify and recover sales tax paid by our client’s on exempt transactions.  With the burden on the seller to collect sales tax and the seller’s potential liability (tax, penalties and interest) associated with non-compliance, many vendors simply charge sales tax on most transactions whether or not the transaction qualifies as non-taxable.

Xcellent Tax professionals follow a refined approach to conducting sales tax overpayment reviews requiring only minimal internal resources to complete.

Managed Audit

Many states have programs for companies to conduct a self-audit.  State agencies provide guidelines to follow and in some cases, interest may be reduced and penalties waived by conducting a “Managed Audit.” Xcellent Tax is often engaged to represent clients during the managed audit process, providing our expertise to not only conduct the audit, but to identify overpayments and develop defensible positions where appropriate

Nexus Review (Multi-State Sales Tax Issues)

Multi-State Taxation – A Growing Concern

In order to determine if your company has a legal presence (NEXUS) within Texas, or other taxing jurisdictions, an analysis must be completed. We can provide help with the complex and confusing laws regarding NEXUS. If you are not a Texas company but you are making any sales into Texas, including labor, you MUST be concerned with NEXUS. This is also true of many other taxing jurisdictions. If you have agents, property, or make deliveries into a taxing jurisdiction where you do not have operations, you may maintain NEXUS and therefore required to collect and pay sales and use tax in the appropriate state.