201007707L Date: July 8, 2010 AP 124 To: Audit Staff From: David Rock Subject: Documentation of Contested Items for Hearings Effective immediately, in order to accurately communicate adjustments that are needed on audits/refunds that are in the hearings process, the attached electronic spreadsheet must be provided to the hearings attorneys. This spreadsheet is the only acceptable means of documenting any decision in the hearings process to accept and/or deny individual transactions for sales and use tax/direct pay audits and refunds. No new columns can be added to the worksheets. The auditor is the only one authorized to prepare or make changes to the spreadsheets for use in the hearings process. The new procedure makes both the auditors and the attorneys aware of all issues before the hearings are finalized. The auditor should extract the WATS transactions to eliminate having to manually enter the agreed/disagreed items to the approved worksheet. If the audit contained supporting excel worksheets, such as those commonly prepared on convenience store audits, the revised excel worksheets should also be provided to the hearings attorney. Audits/Refunds Forwarded to General Counsel at the 61st Day The auditor will document his agreement/disagreement with transactions examined during the 60-day period. At the end of the 60 days, audits/refunds that will continue through the redetermination process should be forwarded to General Counsel via Agency Work Manager (AWM) Pre-Hearings window. The auditor will comment on the pre-hearings screen that an excel schedule with agreements is available for the hearings attorney on request. When the case is assigned to an attorney, the attorney will e-mail the auditor and copy the supervisor/manager to request the electronic spreadsheet documenting the agreed/disagreed items. The audit/refund will also be routed back to the auditor on AWM with the task “Perform Post Audit Activity.” The auditor may close their AWM task after the spreadsheet is provided to the attorney. Additional Documentation Reviewed after the 61st Day When an attorney obtains additional documentation from a taxpayer for review, the auditor will be notified via an e-mail. The assignment, along with the additional documentation, will be routed back to the auditor to review and to update the schedules accordingly. If the documentation is for a refund/credit transaction, invoices that are being presented for the first time should be added to the spreadsheet. Refund/credit transactions should be shown as, for example, -$5.00. Each time an auditor reviews and updates the spreadsheet, the date on which it is done should be reflected in the title line “Updated On”. The comment on the worksheet should reflect the findings of the latest review. Auditors should include in the “Comments” column a brief reason for his/her disagreement for each transaction (i.e. no certificate presented, item taxable under data processing rule). The excel spreadsheets completed after each review will be an exhibit to every Tax Division pleading. The final spreadsheet will be: (1) an exhibit to a motion to dismiss, or (2) sent with the case filing to SOAH to advise the administrative law judge of the agreements and disagreements. Estimated Original Audits When documentation is submitted for an audit that was originally estimated due to lack of records, attorneys will need a revised tax liability. The agreed/disagreed worksheets should be used to list all items that will be adjusted. Non-uploaded Taxes (Franchise, Mixed Beverage, Hotel, Fuels, IFTA) New supporting schedules should be submitted electronically to Legal showing the calculation of the revised tax liability. These spreadsheets should reflect the date that they were updated in the title line. Updated Adjustment Report If an attorney requests an updated Adjustment Report to show the amended tax amount with corresponding penalty and interest amounts, the auditor should contact Cynthia Salazar or Martha Middleton. If you have any questions regarding this memo, please contact the Area Manager of Technical Support, the Technical Support supervisor, or the subject matter experts in Audit Headquarters.
1. Hearings SpreadsheetACCESSION NUMBER: 201007707L SUPERSEDED: N DOCUMENT TYPE: L DATE: 07/08/2010 TAX TYPE: SALES