Why am I being audited?
The Department of Revenue (DOR) routinely audits businesses to determine whether state excise taxes were reported and paid correctly. Audits are a learning opportunity for correct excise tax reporting.
What will the auditor review?
The audit period is usually for the four preceding calendar years, plus the current year through the end of the last completed calendar quarter.
An audit of your business activities will cover several major areas, including:
- Income – verification of proper amounts, classifications, and documentation.
- Deductions and exemptions – verification of proper amounts, classifications, and documentation.
- Purchases – verification of retail sales or use tax paid on capital assets, supplies, or articles manufactured for your own use.
The above three categories relate to the major excise taxes you may pay on your tax returns such as:
- Business and occupation tax
- Retail sales tax
- Use tax
- Public utility tax
What happens after the audit?
You will be notified of the audit findings. The auditor will explain any adjustments to you or your representative before finalizing the audit. If you have information we have not considered or you believe we made a mistake, please contact the auditor promptly.
How to prepare for an audit?
If you're facing an audit, or just want to know more about audits, this video will give you information about what to expect before, during, and after an audit by the Departments of Revenue, Labor and Industries, and Employment Security.