Audit Sampling & Compliance Review
Why Audit Sampling & Compliance Review Matter
Sales tax audits rarely examine every transaction. Instead, states rely on sampling methods that can dramatically inflate liabilities if errors appear in the sample set.
Our CPAs conduct proactive compliance reviews and simulate audit sampling before the state does. This allows issues to be corrected, documentation to be organized, and audit risk to be reduced — so you’re prepared rather than reactive.
What's Included
- Pre-audit compliance reviews to identify exposure early
- Simulation of state audit sampling and extrapolation methods
- Review of exemption and deduction documentation for supportability
- CPA-backed representation during state sales tax audits
- Penalty and interest mitigation strategies
We Help With
- Missing or incomplete documentation for exemptions and deductions
- Sampling errors that overstate liability during sales tax audits
- Inconsistent reporting across systems, locations, or filing periods
- Unexpected state audits that lead to inflated assessments
- Ongoing stress and uncertainty around sales tax compliance
Explore More Sales & Specialized Tax Services
Audit sampling and compliance review are just one area of our specialized tax support. Explore other services in our Sales & Specialized Tax category:
- Sals & Use Tax Compliance — accurate filings across states
- Nexus Discovery & Compliance — identify and manage multi-state obligations
- Excise & Property Tax — specialized compliance for industry-specific taxes
- Sales Tax Exemptions — ensure exemptions are valid and defensible
- Indirect Tax Recovery — recover overpaid taxes and boost cash flow
FAQs: Audit Sampling & Compliance Review
Audit sampling and compliance reviews are critical in sales tax audits. These FAQs explain how sampling affects liability, how compliance reviews reduce risk, why exemption documentation matters, how often reviews should occur, and how CPA representation protects your position.
What is audit sampling in a sales tax audit?
Audit sampling is when state auditors review a limited subset of transactions and extrapolate the results across the entire population. If errors appear in the sample, the state applies them broadly, which can significantly inflate assessed tax, penalties, and interest. Preparing in advance helps ensure the sample accurately reflects compliant activity rather than isolated mistakes.
Can a compliance review really reduce audit risk?
Yes. A compliance review identifies issues — such as missing exemption certificates, misapplied tax, or reporting inconsistencies — before the state discovers them. Addressing these items proactively reduces exposure and demonstrates good-faith compliance, which can help limit penalties and narrow audit scope.
What happens if I can’t provide exemption certificates during an audit?
Without valid documentation, auditors generally presume the transaction was taxable, even if it qualified for exemption. This is one of the most common causes of inflated assessments. Our CPAs help organize, validate, and remediate exemption records so legitimate exemptions are properly supported.
How often should my business conduct a compliance review?
At least annually, and anytime your business expands into new states, adds sales channels, or changes operations. Regular reviews help catch errors early, maintain defensible records, and prevent minor issues from becoming costly audit findings.
Will you represent my business if I’m already under audit?
Yes. Our CPAs provide full audit defense — managing auditor communication, reviewing sampling methodologies, challenging unsupported assumptions, and negotiating on your behalf. You remain protected and informed throughout the process, rather than reacting to state demands after the fact.
