Denver Sales Tax Audit

[Brandon-And-Robert0]

Hey, community!! 

I just received a Sales Tax Audit notice from the City and County of Denver.

Has anyone else been sales tax audited that can give us any advice?

I have kept great records of everything, but I am nervous! 

Any help would be great.

Thanks, everyone!

[Letti0]

@Brandon-And-Robert0  It's not a big deal if you have proper records. If you only list on AirBnB they pay all your taxes due end of audit. If you list on other sites, just have your paperwork in order and they will sign off, been through more audits than I care to think about lol Unions, Insurance, Unemployment, etc. they seem to just like to bother people ;D

[Kelly149]

@Letti0 I think you give abb too much credit. For our Texas listings, abb collects the state tax but none of the city, county, tourist district taxes. I have no idea what is happening for @Brandon-And-Robert0 but just bc abb collects some tax does not necessarily mean all obligations have been met. 

[Letti0]

@Kelly149  I am well a where of the Texas issue and have helped a few Texas residents out when they got nailed in Galveston and other areas for not paying the taxes. In @Brandon-And-Robert0 case AirBnB collects all the town, county and state taxes he owes, so he owes nothing personally if he only books with AirBnB. If he does list on other sites yes he owes the taxes for those as I stated, but provided his paperwork is order as he states he's home free no issues. 

[Brandon-And-Robert0]

Well the audit is over, and I owe quite a bit of money. 

When I first established the business and sales tax license, I was confused so I called the city and spoke with my sales tax manager and was given very incorrect information, and now I have to pay for it. 

If you get an audit notice, do not willing give up your info, I was an easy target and now I know not to willing comply. Let them subpoena the info next time. 

[Cathy407]

 I'm sorry to hear of the large assessment, but I'm not surprised.  Denver and other home-rule cities in Colorado and the State Department of Revenue all perform audits.  Few seem to come back with $0 or low assessments.  

I handle multi-state sales and use tax day-in and day-out with a focus on Colorado specifically.  If you play hard-ball with Denver and don't signtheir Consent to Extend the Statute of Limitations, they'll likely issue a jeopardy assessment.  It won't be low!  Knowing what to expect is important.  Fixing issues before you're under an audit is even better.  Voluntary Disclosure Agreements are a great option to limit the lookback to 3 years and to get penalties waived.

Let me know if I can be of help.

Here's my recent blog on Denver Audits specifically: 

https://www.salestaxcolorado.com/2018/06/13/under-a-denver-sales-and-use-tax-audit/

Our Resources page has links to all States' and to all Colorado home-rule city sales tax pages: 

https://www.salestaxcolorado.com/state-sales-tax-revenue-departments/

Alan Smith

Sales Tax Colorado, LLC

www.salestaxcolorado.com

[Brandon-And-Robert0]

Thanks Cathy so much for the information!

Now that Airbnb handles the sales tax, I don’t have to worry about it! Haha. 

What happened was, I reviewed the tax code, was confused on the cleaning fee, so I called their dept to ask questions. What I was told, was not the same as the auditor told me. 

Luckily I had paid 90% of the taxes so it wasn’t a huge hit, just disappointing. 

I spoke with the audit manager and I am concerned about what he told me. It sounds as if this is a known issue, but instead of fixing the wording to be more clear, they are going to just keep charging people penalties and interest. 

Leason learned, pay someone like yourself to get the full story, and don’t trust info given from them directly. 

At least this will be a loss on my taxes this year!

[Zack51]

Hey Brandon and Robert - Can you clarify what the issue/question was regarding cleaning fees? (Im curious :))

You can Private message me or send an email to zack at odinasset dot com

[Brandon-And-Robert0]

 Well luckily Airbnb handles taxes for us now! If you were paying prior to 2018, you would have needed to pay on the full amount of income, and not deduct the cleaning fees. 

I was confused when I started so I actually called them, 3 times actually, to have them clarify how I would handle the fee and they directed me to deducting them on line 3a. Well that wasn’t right and I had to pay back taxes on all them, around $6000. Fun times!