It is never a happy day when a taxpayer receives an assessment notice from the Pennsylvania Department of Revenue, but there are common trends and issues to look out for to take some of the surprise out of the unwelcomed news that you may (allegedly) owe tax, interest or penalties to the commonwealth. Below are five issues that frequently result in assessments.

Industry Standards

An increasing number of assessments are being made involving so called industry standards. This approach involves the department making an assessment based upon the average sales of other taxpayers in a given industry. For instance, the department may look at pizza shops in a given demographic area and determine the average sales and corresponding sales tax paid among the taxpayers in that industry. The department will then make an assessment where it believes a taxpayer underreported its sales and corresponding sales and use tax (SUT) liability. This most frequently happens when a taxpayer fails to respond to a request for documentation or fails to provide enough documentation to the department.