Bellatoris Consulting, LLC

Archive for May, 2012|Monthly archive page

The Only Tax Podcast: Episode 2

In Podcasts on May 29, 2012 at 3:03 PM

It’s time to take over the podcast world with some straight talk on tax!

The Only Tax Podcast is designed to share stories and insight on ways we can better utilize taxes as a tool for our businesses or careers.

If you’re looking for legislative summaries or analysis on certain tax provisions, this is not where you’ll find those things.  Sorry!

In Episode 2, I get to interview Scott Rubin, a tax director for a Fortune 500 company, and get his take on the Amazon.com issue as well as an interesting trend that’s sweeping the tax universe.

Enough jibber-jabber from me, here’s the second episode of The Only Tax Podcast:

The Only Tax Podcast: Episode 2

 

How a Refund Turned Into an Assessment

In Refunds on May 29, 2012 at 1:35 PM

As a kid, I loved playing the board game “Monopoly.”

As an adult, not so much.  (I think adults tend to forget that you’re not playing with real money.)

Remember those Community Chest cards that read: “Bank error in your favor, collect $200”?  Have you ever heard of such a thing in real life?

I heard of a case where something similar happened in the tax world.  A state auditor called a taxpayer out of the blue with some great news: they were due a refund!

Here’s the punchline: before the auditor was willing to authorize the refund, he wanted to come out and conduct an on-site audit “just to double-check the overpayment.”

You can probably guess where this story is going, right!

The audit to double-check the refund quickly became an audit to issue an assessment.

Was it the auditor’s intent to turn the tides after coming for the on-site audit?

Who knows.

If that was the case, why would the auditor try to pull those types of shenanigans?

Most tax departments are spread so thin these days that they have to tell auditors to effectively “take a number” and wait in line.  This may delay the audit by anywhere from a month to almost a year.

Did the auditor mentioned above get an open invitation to stop by for his audit to double-check the alleged refund?

Absolutely!  He was on site within a few days.

See my point?

Before you work with your CFO, Controller, or whoever else is responsible for accounting for contingent liabilities (or gains in the case of the taxpayer mentioned above), be sure to do your homework.

Things in the tax world may not always be what they seem on the surface.

 

Three Sales Tax Take-Aways from Tiling a Bathroom

In Compliance, M&A, Use Tax on May 28, 2012 at 4:25 PM

 

 

If you’ve been keeping up with this blog, you’ve probably figured out that I enjoy doing home improvement projects.  Don’t laugh, but the sales tax nerd inside of me finds these projects to be great inspiration for my consulting practice.

When I decided to tackle the damaged tiles in one of my bathrooms a few years ago, I was nervous because I had never done any tile work before.

To prepare, I read books, watched videos, and even attended a “Home Improvement 101” class.

Along the way, I learned a valuable lesson: you need to obsess over the first row.

While some may argue that you need to obsess over each tile you lay, the first row is critical because it sets the trajectory for the entire project.  If that first row is slightly skewed, the whole room will be off center.

Connecting the Dots

1) When your company rolls out a new product or service, make sure you’re aware of any new sales tax and/or use tax responsibilities.

2) When your company opens a new office or expands its operations into a new jurisdiction, make sure you’re aware of any new sales tax and/or use tax responsibilities.

3) When your company acquires another company, make sure you’re aware of any new sales tax and/or use tax liabilities that you just inherited.

When a change occurs, that’s the best time to make sure that you’re aware of any new sales tax and/or use tax responsibilities.

If problems go unnoticed, and years pass, what started as a minor level of exposure can grow exponentially (topped off with a generous helping of interest and penalties).

Obsess over the first row of tile to get a beautifully remodeled room.

Obsess over the new aspects of your business to get a big fat bonus (after your CFO sees how much money you saved the company).

The Only Tax Podcast: Episode 1

In Podcasts on May 20, 2012 at 7:43 AM


It’s time to take over the podcast world with some straight talk on tax!

The Only Tax Podcast is designed to share stories and insight on ways we can better utilize taxes as a tool for our businesses or careers.

If you’re looking for legislative summaries or analysis on certain tax provisions, this is not where you’ll find those things.  Sorry!

In Episode 1, I quickly lay the groundwork for this platform and also dig into a story about IRS audits.  Plus, I’ve fired up a contest that you can enter for a giveaway.  So be sure to check out the podcast for more details!

Enough jibber-jabber from me, here’s the first episode of The Only Tax Podcast:

The Only Tax Podcast: Episode 1

 

Jack of all Trades

In Audits, Maryland, State-Specific, unclaimed property on May 15, 2012 at 3:20 PM

While I fancy myself as a do-it-yourself kind of homeowner, I’m not afraid to outsource certain tasks to professionals.

One service that I’m happy to outsource is pest control.  The company I use keeps Chateau Hoffman free of all unwanted guests, so I’m happy to write that check each month.

During my most recent pest inspection, the technician hit me with a left hook:

“Mr. Hoffman, would you be interested in hearing about the kitchen and bathroom remodeling services our company now offers?”

Home improvement services from a pest control company?

For a second, I thought that this might not be too crazy since their pest control work is within the home repair/maintenance industry.  That thought train lasted for about five seconds before my skepticism kicked in.

“No thanks, I appreciate the offer though.”

I had a gut feeling that the jump from pest control to kitchen/bathroom remodeling was too extreme for my level of risk tolerance.  They may be able to do it just fine, but the risk of errors is too much for me.

Connecting the Dots

I was speaking with my friend Karen Syrylo from the Maryland Chamber of Commerce recently and I learned a really interesting nugget of information.  To streamline audit operations in Maryland, sales and use tax auditors are now starting to act as unclaimed property auditors as well.

(If I just threw you a left hook, rub your eyes and re-read that last sentence.)

In some cases, taxpayers in Maryland are having auditors simultaneously do sales tax audits and unclaimed property audits.

Deja vu…this reminded me of the remodeling pitch I got from my pest control company!

Here’s the magic question: would you feel comfortable having your pest control company remodeling your kitchen?  If not, it’s probably because you’d be worried about their expertise in the area of kitchen remodeling.

The next question is: would you feel comfortable having your sales tax auditor also auditing your company’s unclaimed property activity?  If not, it’s probably because you’d be worried about their expertise in the area of unclaimed property.

Green auditors can make for a very difficult time in defending an audit.  If your organization has operations in Maryland, it may not be a bad idea to prepare for an unclaimed property audit.  If your organization is like most, you may need to draw straws and figure out who is going to take responsibility for unclaimed property in the first place.  (Most companies toss it around like it’s a hot potato.)

If your company has already been hit with a one-two punch in Maryland (a sales tax audit and a simultaneous unclaimed property audit), feel free to drop in a comment below and let us know how it went!

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