What happens if a Virginia sales tax audit is closed before the taxpayer has a chance to review the findings and provide documentation?

Plain-English summary

The taxpayer's chief complaint was procedural: the Department's sales and use tax audits were concluded before it had enough time to review the findings with the audit staff and provide additional information for the items it disputed. It asked for that opportunity. The Commissioner agreed.

The audit staff will contact the taxpayer to schedule a review meeting. After that meeting, the taxpayer will have 60 days to provide any additional documentation — and it must bring everything then, including properly executed, valid exemption certificates and all invoices and accruals supporting its self-assessed tax. The auditor will review the documents and make adjustments as appropriate.

The appeal is being closed, but this is not the taxpayer's last word: if contested issues remain after the auditor's review, the taxpayer may file a new appeal within 90 days of the audit revision under Va. Code § 58.1-1821 and 23 VAC 10-20-165.

What this means for you

If an audit is wrapped up before you get a fair chance to respond, say so on appeal — the Department can send the file back for a taxpayer review rather than deciding the merits. But the opportunity comes with a hard deadline: gather all your documentation before the review meeting, because you get one 60-day window to produce valid exemption certificates and records supporting your self-assessments. And note the appeal clock resets — a revised audit gives you a fresh 90-day right to appeal any issues that remain.

Common questions

Q: The auditor closed my audit before I could respond. Can I still submit records?
A: Yes. Here the Commissioner ordered a review meeting with the audit staff and gave the taxpayer 60 days afterward to submit supporting documentation.

Q: Does closing the appeal end my rights?
A: No. If issues remain after the auditor's review, you may file a new appeal within 90 days of the revised audit under Va. Code § 58.1-1821.

Citations and references

• Va. Code § 58.1-1821 — application to the Tax Commissioner for correction of an assessment (90-day appeal window)
• 23 VAC 10-20-165 — administrative appeal procedures

Source

• Landing page: Virginia Laws, Rules & Decisions
• Ruling: P.D. 20-121

Original ruling text

July 14, 2020

Re: § 58.1-1821 Application: Retail Sales and Use Tax

Dear *:

The Department previously acknowledged receipt of the appeals filed on behalf of * (the “Taxpayer”). The main contention in the appeals is that the audits concluded before the Taxpayer had sufficient time to review the audit findings with the audit staff and to provide additional information for items included in the audits with which the Taxpayer did not agree. The Taxpayer requests the opportunity to review the findings of the audit with the audit staff and to provide additional documentation if necessary.

Based upon a review of the information before me, the Taxpayer will be given the opportunity to review the audit findings with the audit staff. The audit staff will contact the Taxpayer to schedule a meeting for the review.

Following the review, the Taxpayer will have 60 days from the date of the meeting to provide any additional documentation to the audit staff. The Taxpayer must provide all documents for review at that meeting, including properly executed and valid certificates of exemption and all invoices and accruals supporting the self-assessment of taxes. The auditor will review all documentation and make adjustments, as appropriate.

The appeal matter is being closed. At the conclusion of the auditor’s review, should issues remain, the Taxpayer may submit an appeal within 90 days of the audit revision in accordance with Virginia Code § 58.1-1821 and Title 23 of the Virginia Administrative Code 10-20-165.

If you have any questions regarding the review of the audit findings or any associated documentation, you may contact the auditor. If you have any questions about the appeals process, please contact * in the Department’s Office of Tax Policy, Appeals and Rulings, at ***.

Sincerely,

Craig M. Burns

Tax Commissioner

AR/2019P