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Troubleshoot tax notice issues because of filing frequency mismatch

This article applies to:Avalara Returns for Accountants

Filing frequency mismatch occurs because of discrepancy between the following:

  • Filing frequency that Avalara was asked to file while scheduling returns
  • Filing frequency registered for an individual taxpayer.

Because of such discrepancy, tax notices are issued. This issue usually occurs during the first few months of a year, when each state reassess filing frequency based on the previous fiscal year of tax data. For example, a state may switch your filing frequency from quarterly to monthly. If this frequency is not updated in AvaTax, Avalara will file the Q1 return covering three months, whereas the state is expecting three monthly returns. This will result in the need for amended returns and a resolution of late filing/payment penalties by the taxpayer. 

Identify the filing frequency mismatch

Compare the following information:

  • The filing period and/or filing frequency listed on the notice received.
  • Filing frequency configured for the scheduled return in AvaTax.

If you see any mismatch either between the frequency outright or if the period listed on the notice is not valid for the frequency selected in AvaTax (for example, January is not a valid period if you are registered quarterly), then this is a frequency mismatch.

Resolve the filing frequency mismatch

To resolve the mismatch, do the following:

  1. Contact the state directly for the next steps.
    The state may be able to switch back to your original your filing frequency, and accept the return / payment that Avalara filed.

  2. If step 1 is not successful, amend/backfile the returns with correct information.
    You can perform this step in-house. Alternatively, you can avail Avalara Professional Services for an additional fee. Contact your account manager if this service is needed.

  3. Update the filing frequency of the scheduled return in AvaTax. For details, see Change the filing frequency for a return.

Prevent filing frequency mismatch

To prevent filing frequency mismatch, do the following:

  • Keep a check for filing frequency notifications / notices.

  • Check with the state to ensure that the contact on the account receiving these notifications is updated.

  • Set a reminder in January of each year to check if your registered filing frequency has changed. You can check this information in the online filing portal in most states.
    Note: Filing frequency changes for the new year would need to be in no later than the end of January.

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