When it comes to Sales & Use tax, what is the most accurate measure of your company's effectiveness?

The most obvious measure is whether you consistently pay large audit assessments and/or get big refunds of overpaid tax. Boil everything down and that's really the measure, isn't it?

So, why do companies have large audit assessments year after year? That's a good question, because with a good system in place, the big audit assessments should not happen again and again. The system we offer?  We call it the Total Sales Tax Solution.

For many of our clients this problem was recurring. They would work on the audits and then hire a tax consultant to come in and search for additional reductions and then train your employees, only to have the consultant return again to retrain, re-review, or conduct more research.

This model of using contractors to work on sales and use tax projects is common. Virtually all consultants follow this pattern, except Peisner Johnson (we'll explain in just a minute).

The problem with this approach is that the real problem doesn't go away. For example, if a consultant fights a sales tax audit and achieves a significant reduction, three years later that company often gets another assessment from the state. You then numbly work the audit and call the consultant in again to review and re-train. Some consultants treat the symptoms of tax ailments, not cure them.

You have to believe that most consultants honestly try to end tax problems through training and taxability research. So why is the problem recurring? There are many reasons why assessments continue to happen, some are due to tax law changes or employee turnover; some are from rate changes or overworked employees; some are new business acquisitions, mergers, sell-offs, etc; and some are just low-skilled or untrained employees. Training has never solved the problem of recurring tax assessments.

Tax Managers, Controllers, CFO's, and Owners of companies have come to understand and accept that these problems are a cost of doing business.

So how can you end audit assessments once and for all? To end assessments you could review every purchase invoice, expense purchase, and sales transaction to ensure the proper tax was collected, accrued, and remitted. However, you most likely do not have the time or resources to do this. You could not afford to have a seasoned expert on staff for this purpose, and in some cases, it may not be cost-effective. But you must agree, this would end the problem.

Peisner Johnson's Total Sales Tax Solution (TS²) Ends Recurring Audit Assessments.

Once and For All.

Briefly, here's how it works:

Sales, Expense & Fixed Asset Review
 
I think you would probably agree that if you had the time, systems and personnel to review in detail every one of your sales and purchases you could eliminate all audit assessments. If you did so, you would safely ensure that you do, in fact, accurately collect and remit, and/or accrue the appropriate tax amounts.

Unfortunately for most companies, the "if's" are about as real as a wish. Most of our clients don't have the resources or expertise at every level to appropriately review all transactions in their business. What happens over time is companies begin to view audit assessments as a way of life. It doesn't have to be that way.

Peisner Johnson created TS² to end audit assessments, not audits. Over the years, our clients could have saved millions of dollars in tax penalties and interest (and consulting fees!) by using our Total Sales Tax Solution service.

The Main Component Of TS² Is:

• A Thorough Review of Your Purchases and Sales
  • 100% Review of Fixed Assets
  • Statistical Sample Review of Expense Items
  • Statistical Sample Review of Sales Invoices

We will conduct these reviews on a monthly, quarterly, annually or other appropriate intervals depending on your company's transaction volume. We will maintain an electronic scan of these items for future reference and review.

After each review, we calculate exactly how much you should remit/accrue for tax purposes. There is nothing for you to do. There are no employee problems, no software to maintain, and it's always accurate.

Just imagine what the auditor's reaction will be when, in your initial meeting with them, you are able to present to them CD's or binders containing copies of all of your fixed asset purchase records, tax returns and exemption certificates. They'll be speechless.

Exemption Certificate & Document Management
 
It was mentioned earlier that 70% of audit assessments were due to lack of complete or proper documentation. Even if you paid the taxes correctly to a vendor, you have to be able to document it. Or if you sold some item to an exempt organization and properly did not collect tax, you will have pay the tax unless you collected the proper certificates.

Many times we have companies who come to us with audit assessments and hope that we can magically reduce their audit without providing any documentation. Auditors simply do not waive tax owed without proving it through documentary evidence.

The Next Component of TS² is:

• Document Management
  • Maintain & Electronically Store All Exemption Certificates
  • Maintain & Electronically Store Applicable Sales, Expense, and Fixed Asset Invoices
  • Maintain & Electronically Store All Sales Tax Returns

Your documents are electronically and securely stored at our facility and a duplicate is kept offsite. Copies of your company's tax returns are also accessible through our password encrypted SSL secure server, 24 hours a day, 365 days a year.

State Sales Tax Returns
 
In an area as demanding and ever-changing as sales and use tax, keeping up with the hundreds of changes each month to tax returns, tax rates, and tax law can be both frustrating and a real drain on departmental resources. In working for clients we discovered 5 main problems when it comes to the monthly hassle of sales tax compliance.

See if any of these sound familiar to you:

Problem #1: Return Preparation takes up too much time. Time that could be spent looking for ways to reduce tax liability rather than performing the administrative task of filing tax forms.

Problem #2: Return Preparation is a redundant, "non-value creating" task and no one wants to do it. Calculating and filing returns on a monthly basis can be monotonous, tedious, labor-intensive, and non-rewarding assignment.

Problem #3: It's true you can get forms software, but all it really does is help you fill out the forms quicker. The data-gathering and organizing is usually the most tedious and time-consuming part of the process --and that remains to be done even with forms software.

Problem #4: Outsourcing would be great, but it's probably too expensive. Outsourcing usually is too expensive; here's why: someone still has to do the work. When you outsource you're paying someone else's staff to perform all of the same tasks you do internally -- at a premium hourly rate. No wonder it's so expensive. It saves you the headache, but it will cost you dearly even under normal circumstances.

Problem #5: Anything that can go wrong will. Tax returns are a monthly burden. It doesn't matter to the state that your staff goes on vacation, has a death in the family, gets married or is sick, or any other issue that might come up. For instance, consider the time and cost to retrain someone when your employee is promoted, or leaves the company. Then the whole process falls on your shoulders --unless it is already on your shoulders, in which case you simply don't need any of the above happen to you.

The Next Component of TS² is:

• State Sales Tax Returns
  • Simply Send Us Your Tax Data Electronically Each Month
  • We Calculate & Print Ready-to-File Returns
  • We Can Even File the Returns for You
  • We Then Send You Copies of the Returns with Reports and Archive the Documents.
  • Your Sales Tax Returns are Available Via Our Website 24 hours a day, 365 days a year.

A company's personnel should be focused on tax processes where they add the most value. Employees should be spending more time analyzing their tax obligations and searching for tax reductions or tax savings opportunities and responding to audits. Actually, it seems to us that most sales tax department employees spend a disproportionate share of their time focusing on sales tax return preparation and running around getting checks signed at the last minute. We can streamline that whole process and let you take care of the more important matters. By outsourcing the process to us, you eliminate redundant, administrative work, which allows you to reallocate those resources to the tasks where risk is greater and more value can be created. For companies without a sales tax department, our services ensure that your people stay focused on accounting, not sales tax returns.

Monthly Tax Consulting          
 

A Senior Manager is assigned to each client. They act as the primary consultant on your account. They administer TS². Each Senior Manager has staff at their disposal to work on your account.

Since your Senior Manager becomes intimately involved in your business, they become a valuable asset. In addition to performing the functions of TS², they are also available for the inevitable tax questions that come up.

The Final Component Of TS² Is:

• Monthly Tax Consulting
  • Tax Research Projects
  • Nexus/Registration
  • Training
  • And more...

In addition to the various monthly consulting, we also search for go-forward tax savings strategies. We identify changes to your business structure or method of operations to maximize reductions in tax. We have saved clients untold millions of dollars by implementing our strategies.

Finally, we handle all correspondence with the State Taxing Authorities upon your approval. By doing this you can focus your attention on more important projects and duties.

Here's What We Do To Get Started:

Step 1: Call or email us to schedule a no-obligation initial meeting (phone or in person) to discuss your situation.
Step 2: We submit a proposal.
Step 3: After approval we begin implementing the service.

That's it! There's very little else for you to do.

The Top 9 Biggest Sales/Use Tax Challenges Companies Face. See if Any Apply to You.

The Total Sales Tax Solution was developed over many years of working with our clients fighting sales and use tax audits and consulting on all kinds of multi-state tax issues. We found that most companies face pretty much the same set of challenges regardless of their industry or company size.

So what are the tax challenges? The first challenge is by far the most critical.
 

1.	Recurring Large Sales Tax Audits Working on sales tax audits has become a common part of a Tax Manager/Controller job description. Audits are like a bad cold, for most companies, they fight them off  with a huge effort, only to have it return again next year. So most Controller's or Tax Managers say to themselves, "We're going to fix this problem, now, once and for all." The problem is the fix they usually apply doesn't work. A common method for curing the problem of audits is to train all tax and accounting personnel to review transactions and documents as they happen. Sounds easy enough. Why doesn't this work? There may be many reasons, but mainly it comes down to these four: tax law changes, tax rate changes, company changes, and personnel changes. The solution to the problem would require constant research and knowledge of tax laws and rates, and consistent, reliable, and skilled employees to expertly review every transaction (purchase & sale) and maintain all proper documentation.
So how can you overcome these 10 common tax pitfalls? How do you avoid large recurring audit assessments once and for all? Well, you can spend over 12 years and 30,000 research hours; or you can spend $1.5 Million in systems and personnel, or you can simply consider our Total Sales Tax Solution (TSTS) or as we like to call it: TS².
2.	Tax Law Changes There are over 34,000 taxing jurisdictions in the United States. Each of these jurisdictions reviews their tax code on a regular basis (usually yearly or every other year). They can add, revoke, alter, or interpret their tax code in order to generate revenue and/or entice certain types of business into their jurisdiction. As you can imagine, each jurisdiction has volumes of tax code and letter rulings (rulings on tax interpretations) and these laws are constantly changing. These changes can positively or negatively affect your business. Virtually every client we have worked with has areas of exposure (under-payments) and opportunities for refunds (over-payments). It is the responsibility of each business to know and understand the tax law in the jurisdictions in which they conduct business. The potential solution to the problem is a regular and thorough examination of the tax law as it affects your business in the applicable taxing jurisdictions.
3.	Keeping Personnel Trained & Skilled As we discussed above, due to all of the changes in tax law, it can be a monumental task to stay current with tax law and to train and retrain employees. What often happens is that very few of your staff understand and apply the training received on behalf of the company. The solution to the problem is to constantly research tax law in all your jurisdictions you operate in and create a regular training program for all personnel, and to implement a method to ensure that employees are applying their new knowledge.
4.	Personnel Turnover & Limited Staff Once you've created this efficient, streamlined training process and compliance method, you still have the problem of employee turnover, which leaves you short-handed. There are many reasons for employee turnover: employees are promoted, take new positions, move, start a family, quit, and some are fired. The process of training and retraining starts all over. Given our turbulent business environment, if you have specialized tax employees you're one of the lucky ones. The solution to this problem is difficult to find, especially if you have a limited budget for personnel. In most cases a consultant is the best option, however, like hiring an employee, finding the right consultant can be difficult, and costly.
5.	Filing Accurate & Timely Returns Sales tax return preparation is also a regular part of your administrative duties, however, it can also be a frustrating, inefficient, and unprofitable process. The number of locations you have, the number of states you operate in, and your type of business compound this monthly annoyance. The number one frustration in producing returns is accuracy. Filing inaccurate returns can result in penalties and interest. The second frustration is filing timely returns. Filing late returns also incurs unnecessary penalties and/or interest. No matter how efficient you are in preparing your sales tax returns, it will never be a profit-generating activity. Filing returns are a necessary part of your business, but can often be completed more cost-effectively using other methods depending on how much time you spend and how many returns you file.
6.	Paying Unnecessary Penalties and Interest Penalties, interest, late fees, fines, and liens are an unfortunate but frequent occurrence in many businesses. Usually, it's a sign that your employees are overloaded with work. The tragedy of penalties and interest is that they are always avoidable. The solution is to create systems to eliminate late and inaccurate filings.
7.	Document Management 70% of audit assessments are because of the lack of proper documentation. The number one culprit is exemption certificates. Missing certificates are always tragic because it means that tax you could have collected from your customer at the point of sale now comes out of your pocket. The responsibility for maintaining exemption certificates is typically assigned to the least qualified person in the company. Document management is not complex or difficult, it's just time consuming and tedious. The other culprit in the documentation problem are attributable to missing invoices. When the auditor requests documents that go back 4 years, it can be impossible to find them. That makes it easy on the auditors - they just schedule the item assuming no tax has been paid. The solution can be found in establishing a proper system and using qualified personnel.
8.	Software Costs & Upgrades There is excellent software available that handles tax form preparation. The problem for many companies is that the software is prohibitively expensive and implementation of the software can cost 2 to 5 times the software cost. It's not unusual for a company to pay $60,000 to $100,000 to get the correct software implemented properly. Implementing the software is just the beginning; there are annual costs involved as well. But the software programs seem to work most of the time. It can be a viable solution; that is, until your company changes accounting systems and you're back to square one. The solution is to use an affordable service that handles the return preparation. It's like fractionally purchasing the software.
9.	Unpredictable Costs Nobody in the world of accounting/finance likes surprises. Even good surprises are not always welcomed. Corporations operate on budgets. Everyone is evaluated relative to his or her budgeted numbers. Well, sales tax audit assessments are just plain budget busters. They're a surprise no one wants to get. Most companies can handle just about any problem as long as they can budget and plan for it. Sales tax audit assessments always seem to come out of the blue. Ending the unpredictable cost of audit assessments has been difficult; however, Peisner Johnson has found a way to end audit assessments for good. Click Here To Get Started