Jim Beddow, CPA

As you may know, the states and cities are broke and they’re looking for income. Many local governments are relying more and more on audits and their traffic law enforcement income to balance the budget. I’ve recently talked to a few CPA friends about the kinds of audits they’re seeing in their practices. Here’s a list of what I heard about about:

• Sales & Use Tax – The auditor got them for not paying use tax on magazine subscriptions, software updates that came in the form of a CD (not a download), and the purchase of some used furniture. The auditor said that technically all businesses are supposed to file a use tax return at least annually. Internet purchases in the business are subject to use tax as well.
• GA Department of Revenue audit of income tax return – Disallowed a vehicle deduction because the vehicle wasn’t in the business name.  Also collected sales tax on firewood sales and cleaning fees in a vacation rental business.
• Unclaimed property audit by GA Department of Revenue – They were looking for uncashed payroll checks for a 5 year period. Most states have unclaimed property laws that eventually require that property to be turned over to the state.

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