Small Business Owner Fraud

Give me an example..... Are you a degreed professional, CPA, CA, etc. I guess it may be complex if you are a bookkeeper and have not actual studies in the matter.

This stuff is really pretty basic. I used to do audit and advisory, now I am a programmer customizing accounting software. It might get a little more difficult if the laws change as there is a coalition of states trying to change the laws and do away with Nexus and want companies to collect sales taxes based on the address of the ship to location. Not that gets complicated as there are something like 5,000 taxing jurisdictions.

However, until those laws change, it is based on Nexus (or physical presence) of the corporation in the state. Won't go into case law, but will just say again, it is not that complex.

For example, in Texas, I had a company that rented cranes. Sometimes they rented cranes with operators and without. Texas wanted them to pay sales tax on ALL rentals. We had to fight it (i.e. when they rent an operator as well, we're really performing a service, not renting a tangible good).

It's NOT that simple, and I think any real practitioner or professional DOES recognize this.

P.S. - if it WERE that simple, there wouldn't BE that much case law, now would there? Oh, and I am three fourths the way through the CPA exam (which doesn't COVER sales tax issues in ANY form of depth). I have a masters in Taxation from a four year private college, and 5 years of public accounting experience. I am just saying, as my initial point was, many small practitioners themselves don't have the experience to deal with complicated sales tax issues. The fact that you would even ASK about what kind of certification someone has in a sales tax question shows your ignorance, as you ought to know that sales taxes are not covered in depth on ANY of them.

Thanks.

Simple case, this has been established on almost every state. If you don't separate the value of the items, when one is taxable all are taxable. Again nothing too complex here. Your plumbing contractor comes to the door, $500 for everything, you pay tax on $500. Or $300 parts, $200 labor, you pay tax on $300 (unless statute specifically states that services are taxed). Some contractors/distributors/wholesalers don't want to break out product price and install/delivery/setup price for competitive reasons.

Again, not that complicated. I have to write software to calculate this for manufacturers, distributors and such. Now, someone who wants to dispute the interpretation of the statute, is a different story. 99% of the people don't have the time or money to fight the state and will just collect taxes as deemed necessary. I had a client in New York when I was with PriceWaterhouseCoopers where the state had a different interpretation of the service they were providing and wanted to collect taxes on over $500 million in services over the last couple years. Now, they had the money to fight, and probably still are.

You are right, there is a little bit case law out there, you should have studied that in your tax classes. However, no where near the income tax cases. As stated, sales taxes are not that difficult. Multi-state, federal and internal tax laws are another story.

I guess I am just trying to put this in perspective. The people doing sales taxes in any large company are clerks, print the reports, do the calcs and pay the sales tax. The income tax people all have masters in taxation. As stated, you have a masters in tax. How many classes were on sales tax and how many on income tax? That right there sums it up.

Again, we are off the subject. The original post indicated that the owners cancelled invoices and kept the sales taxes collected. Sounds like fraud. Someone doesn't have to know all the facts. Long story short, I have turned in other practitioners for errors I noticed as the subsequent auditor on engagements. I didn't have to know exactly what went on, I just know that when I restated beginning retained earnings to the sum of over $25 million on a company that only does $100 million a year, there must have been a problem. I don't need all the facts, I leave it up to the State Board of Accountancy to get those and make sure that the prior auditor performed his/her audits in accordance with GAAS.

Good on the CPA exam.. But the reason sales taxes are not on the exam is two fold. First, they are state issues. Second, they are NOT complicated.

Whatever, I don't think you have that much experience with sales tax. Your analogy was far off base. Anyways, you sound like the kind of poster who just likes to start arguements.