State Tax Audits and Appeals

Strategic State Tax Audit Defense in Houston and Nationwide

While we are deeply rooted in the Houston business community, our expertise extends to every state jurisdiction. State tax audits are often more intrusive than IRS audits because they focus on transactional details like sales tax, use tax, and payroll classifications.

Our team steps in as your legal shield, managing all communications with the state to ensure you only provide the information you are legally obligated to disclose.

Common Focus Areas for State Auditors

• Nexus Determinations: Auditors look for “taxable presence” in their state, even if you don’t have a physical office there.

• Sales Tax Reporting: Examination of gross receipts, exempt sales, and the validity of resale certificates.

• Unpaid Use Tax: Searching for out-of-state purchases where sales tax was not collected but is legally owed to the state.

• Worker Misclassification: Determining if independent contractors should be reclassified as employees, triggering back-pay for payroll taxes and benefits.

The Texas Comptroller Appeal Process: A Case Study in Excellence

Because we are based in Houston, we have extensive experience navigating the specific and often rigid procedures of the Texas Comptroller of Public Accounts. Texas tax law is unique, and successfully appealing a Texas audit requires a mastery of local administrative codes.

How We Challenge a Disagreed Texas Audit

1. Initial Protest & Redetermination: You have 30 days from the audit results to file a written protest. We prepare the formal “Statement of Grounds” to trigger an independent review.

2. The SOAH Hearing: If the dispute isn’t resolved informally, we represent you before the State Office of Administrative Hearings (SOAH). This is a formal legal proceeding where we present evidence and cross-examine the state’s findings.

3. Judicial Review: If necessary, we take your case to district court. It is important to note that recent Texas legislative changes now allow businesses to pursue court challenges without paying the full disputed amount upfront, making justice more accessible for small businesses.

Why Choose Our Professional Audit Defense Team?

Facing a state auditor alone is a high-risk gamble. Our firm provides the high-level advocacy required to level the playing field.

• Direct Representation: We attend all meetings and handle all phone calls, so you never have to speak directly with an auditor.

• Attorney-Client Privilege: Your sensitive financial records and internal discussions are protected by legal privilege, unlike conversations with a standard CPA.

• Nationwide Scope: Whether you are being audited in your home state or for “Nexus” in a state halfway across the country, we coordinate a unified defense.

• Comprehensive Strategy: We don’t just look at the audit; we look at the future of your business to ensure you are set up for ongoing compliance.

The faster you engage professional representation, the more options we have to protect your assets and minimize your liability. Don’t wait until the state issues a “Notice of Intent to Levy.”