How it works
IDOR auditors examine whether a business collected and remitted the correct sales tax, targeting restaurants, grocery and liquor stores, and other cash-heavy retailers, and increasingly online sellers. They reconstruct sales from purchase records, bank deposits, and industry markups, then assess tax plus penalties on the difference, and they assess use tax on purchases made without tax. The Fast Track Resolution program and the Informal Conference Board offer settlement routes before litigation.
Why it matters
Reconstruction methods can overstate sales substantially, and challenging the method early is where these audits are won.
Related: use tax, sales tax nexus. Read more: sales tax audits.
