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The Car Dealer’s Guide To CA Sales & Use Tax Audits – Part 4

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In “The Car Dealer’s Guide To CA Sales & Use Tax Audits – Part 3,” we discussed what happens after a Notice of Determination is issued, California’s special tax districts, DMV registration fees, not-so-secret warranty strategies and the importance of keeping your bill of lading.

In Part 4, we continue with processing transactions such as unwinds and the more complicated rollback. We will also discuss why it is a bad idea to try to avoid paying sales taxes on repossessions.

Finally, if perchance you do get audited, we’ve provided a list of records you should be keeping in your deal jackets and several reasons it would be a good idea to hire an attorney to represent you.

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The Car Dealer’s Guide To CA Sales & Use Tax Audits – Part 3

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In The Car Dealer’s Guide to CA Sales & Use Tax Audits – Part 2, you learned what to expect if you were the recipient of an audit engagement letter, some common techniques the auditor uses as well as how the interview and records examination will be conducted.

In Part 3 of our guide, we will discuss what happens after a Notice of Determination is issued, a little on California’s special tax districts, DMV registration fees, not-so-secret warranty strategies and the importance of keeping your bills of lading.

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The Car Dealer’s Guide To CA Sales & Use Tax Audits – Part 2

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In “The Car Dealer’s Guide To CA Sales & Use Tax Audits – Part 1,“ we discussed the CDTFA’s history of targeting car dealerships for sales tax audits due to the high abuse and error in the industry, as well as the complexity of these kinds of audits. We also outlined how auto dealers are selected for an audit.

In Part 2, you will learn what to expect if you are the recipient of an audit engagement letter, some common techniques the auditor will use as well as how the interview and records examination will be conducted.

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The Car Dealer’s Guide To CA Sales & Use Tax Audits – Part 1

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Ask anyone who has ever owned a dealership and they will tell you that the car business is a tough one. With all the moving pieces that a dealership faces on a day in and day out basis though, one risk that often gets overlooked by owners is the risk that they face in a sales tax audit.

Most of the “mistakes” that we see in the context of audit preparation are benign. Things like not separating shipping charges properly, people not accounting for time and material costs, things being billed individually, or a failure to adjust sales tax rates for the proper district are little and seemingly harmless mistakes in the context of your business operations. But they will trigger an audit.

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The History of Nexus Rules and Case Law

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In this article, we have included some legal cases that set the precedent for current multi-state sales tax laws. Included among them is the historic Wayfair case that broke ground in the area of e-Commerce.

Hopefully, this background will put some of the present law into context. But as always, as the business climate continues to shift and change, so will the laws associated with multi-state taxation.

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Bankruptcy and Automatic Stay

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According to United States bankruptcy law, an automatic stay is defined as an automatic injunction, the purpose of which halts the actions of creditors to collect debts from a debtor who has filed for bankruptcy relief.

Provisions for automatic stay fall under section 362 of the U.S. Bankruptcy Code, which suggests that the stay begins automatically when the debtor files a petition with the bankruptcy court.

Although a stay is automatic, secured creditors may file a petition with the bankruptcy court for relief against the automatic stay if they can show cause.

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International Tax Compliance

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For a wide variety of reasons, many Americans have assets in foreign countries.

Some have left established businesses and homes, fleeing persecution in their country of origin.

There are those who have fled war-torn regions of the world and left their assets in tax havens; or maintain foreign financial accounts to support family abroad.

Other individuals with immigrant roots may have inherited from a relative in the old country who passed away and left them a sum of money abroad.

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California Payroll Tax Audits and Defending Independent Contractors

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You may be familiar with or have heard of a twelve-factor test or a three-factor test or a lot of different tests that the EDD supposedly uses to classify independent contractors.

Through my years of professional experience and time spent in a lot of California payroll tax audits, I will just tell you that a lot of this stuff is bogus.

Audits of independent contractors essentially come down to two things:

  1. revenue generation, and
  2. control.

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IRS Offer in Compromise: What to Do When They Are Rejected – Part One

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IRS Offer in Compromise Appeals – Introduction

As a refresher to the reader, an IRS offer in compromise is a tax settlement with the IRS where the taxpayer agrees to pay a specified sum and the IRS agrees to compromise on the remaining liability.

Many people have seen the various national tax agencies on daytime television offering to settle your tax debt for pennies on the dollar. However, what is left out of their sales pitch is that nearly eighty percent of IRS offer in compromises are rejected for a variety of reasons. This is not entirely a bad thing, but requires some strategic planning on the part of the taxpayer.

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