How Much Is it Going to Cost Me for Brotman Law to Defend Me?

In a sales tax audit, as I've mentioned before, sales tax audits are very cumbersome processes. They involve a lot of documents, they involve a lot of data and they take a while to get through and our firm efficiency is one of our key factors in the work that we do. We want to make sure that the work and the value that we're providing for clients are in a line with their cost expectations. With that said, sales tax audits are a lot of work. There's a lot of organization and presentation and the materials. There's a lot of tendency for disagreements in sales tax audits, particularly when they're using statistical samples. Oftentimes those statistical samples come out wrong on the CDTFA side and we have to correct them and it gets tough when you have an auditor and you get into a conflict with that auditor and the auditor won't back down. So with that said, sales tax law does have the ability to drive cost. One of the things that we do to mitigate cost is by sticking and trying to minimize cost in three key areas.

The first one is with decisions. We'd like to put our clients in the position to make quick and accurate decisions. The easier decisions come, the easier it is to deal with the sales tax audits and the lower the cost to the client. Number two is documents. We work with the client and our team to streamline the document gathering organization and presentation process. A lot of the times we can put the burden on the client and the client has internal resources to handle document organization and delivery much more efficiently than our staff or at least at a lower cost. If that's not the case, we have a very talented team of junior staff members who have done a lot of sales tax audits and who can work through the process very quickly, assembling exactly what our senior team is going to need to defend the audit. The third avenue is bureaucracy. Unfortunately with most agencies, bureaucracy kind of goes hand in hand. Occasionally you're going to have good people in the CDTFA. We're going to move the audit through quickly and without hassle but also occasionally you're going to have some bad people. Most CDTFA auditors will fall within the middle but the goal on our end is to organize the audit, to come to terms with the auditor at the beginning and to agree on an audit plan to move the audit as efficiently as possible. With those caveats, what I tell clients is sales tax audits usually range between $5,000 and $15,000 to complete and obviously that's a pretty big range. But it depends on the client, it depends on the amount of data that we're dealing with and it depends on the difficulty that we're having with the auditor. Rest assured, we're going to try and minimize the cost. In the process, we certainly are cognizant of the fact that a sales tax audit is a marathon and not a sprint and we want to save and allocate resources for when we're actually going to need them. But we also want no illusions coming in about "How big the process is? and "How much risk it is to you if it doesn't get completed properly?" so that's the best estimate that I can give you about the cost of your matter. If you want to know more, the best way for me to give you a cost projection is by understanding your company, understanding how you sell and how you charge tax and in understanding the facts about your particular situation. When I can apply your facts to the situation at hand, I can give you a much better representation of what the cost would be in your particular matter.


Sam Brotman, JD, LLM, MBA

Owner and Director of Legal
Brotman Law