Washington State Audits

An educational experience

If your company is under audit by the state, be assured that you will have a very different experience compared to an audit conducted by the IRS.  Most of the WA auditors will take the extra time to teach taxpayers what to do.  Nearly all of our clients who have gone through state audits tell us about positive encounters.  In reflecting on their experiences, clients also say that they wished they had not spent the energy getting so worried ahead of time. 

Survival Tips

1. For Washington businesses, know the www.dor.wa.gov requirements for your business.
2. Review your out-of-state purchases and be sure to always pay the sales ("use") tax on your Excise tax returns.
3. Review ahead of time paid invoices and lease agreements for large expenditures (e.g., fixed assets) to ensure you were charged and paid sales tax.
4. Always reconcile your accounting system's gross receipts to what you report to Washington and your city.
5. Ensure that your total gross business income reported to WA equals the gross business income reported on your IRS corporate tax return.
6. Clear a room in your office for the auditor(s) to work.

For your audit, gather all of the items required in the audit notice.  Ask if the auditors will accept a copy of your accounting (QuickBooks, etc.) file.  Most auditors will accept a copy, and that step will help to eliminate much of your paperwork requirements. 

And, as our clients have confirmed, try to think of your WA audit as a business learning opportunity.  You will benefit from the experience.