Mock audits are used to assess a company’s possible overall tax exposure, identify credits and/or potential refund opportunities, improve compliance processes and prepare your business for a potential audit conducted by the Texas State Comptroller. In general, a mock audit can identify positive and/or negative Texas Tax issues for a business.
What to Expect
A Texas Tax Group consultant who is an expert with the sales/use tax rules, regulations and policies related to your business will perform a complete audit of your records. This includes:
- Gross Sales Reconciliation: Compares the gross sales from the books, accounting records and other sources to the gross sales reported to the state
- Sales/Use Tax Reconciliation: Compares sales tax itemized on the books to the sales tax reported to the state
- Resale/Exemption Certificates Review: Ensures that all certificates are valid and facially complete
- Taxability Research: Includes tax policy letters, statutes, tax rules, Administrative Hearing decisions and other legally binding documents
- Asset and Expense Purchase Review: Verifies that tax was paid on the appropriate purchase transactions at the appropriate amount; tests for internal controls
- Sales Review: Determines if tax was collected and remitted at the appropriate rate where necessary; tests for internal controls
Records examined during a mock audit include:
- Bank Statements
- Financial Statements
- Material Purchase Invoices
- Federal Income Tax Returns & work papers
- Sales & Use tax returns & work papers
- Sales Journals
- Sales Summaries
- Purchase Invoices (assets & expenses)
- Purchase Journals
- Sales Invoices
- Asset listings
- Chart of accounts
- Customer lists
- Contracts
It is important to note that a mock audit may uncover tax liabilities or overpaid or over accrued taxes. Tax liabilities can be addressed through a separate Voluntary Disclosure Agreement. Overpayments could be addressed through a refund claim.
Why Texas Tax Group
- Our Policy Experts are well versed with Comptroller rules, regulations and policy, have written over 5,000 private letter tax rulings while employed with the Comptroller
- Texas Tax Group’s team of 18 former Texas Comptroller State Tax Auditors, Supervisors and Tax Policy Experts have over 400 combined years of work experience with the Texas Comptroller’s office
- Our consultants have performed over 5,000 tax audits while employed as auditors by the Texas Comptroller’s Office and are familiar with the audit procedures employed by the State
- TTG has offices located in Houston, Dallas, San Antonio and Austin