Property Tax Audits from A to Z
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Positive results from a property tax audit start at the very beginning.The possibility of a property tax audit is often overlooked in the normal course of operating a business. The capitalization and expenses policies of your firm, including minimal descriptions of fixed assets in the detailed fixed asset register, can lead to additional unforeseen tax assessments. Company management should not wait until a time of merger or acquisition to determine if there are hidden liabilities likely to increase purchase price reserves.
AuthorsLidia Bedoy, BDO USA, LLP Jeffrey Shamma, CMI, BDO USA, LLP
Data - Always Keeping Audits in Mind
• Data Is the Foundation Where All Audits Begin
- Company's Asset Capitalization Policy
- Company's Expense Policy
- Good Asset Descriptions
- Ghost Assets
- Physical Inspection to Insure Books and Records
Location - State and County Locations Are Important
• Each State May Have Its Own Requirements
- States Can Treat Similar Assets Differently
- Length of Period Between Audits
- County Auditor or Outside Auditor
Working With the Auditor - a Collaborative Approach Tends to Yield the Best Results
• Keeping a Positive Relationship With the Auditor
- The Audit Letter
- What Information Is Truly Needed?
- Request for Site Inspection
- Auditor Coming to Your Office
- Desk Audits
Audit Results - What Comes out of the Auditor's Review
• Were the Results What You Were Expecting at the Beginning of the Audit?
- Always Request the Auditor's Workpapers and Notes
- If the Audit Was Collaborative - There Should Be No Surprises
- Review State Schedules
- Make Sure There Are No Transcription Errors
- Is an Audit an Opportunity to Correct Prior Year Assessments in the Favor of the Property Owner?
To Appeal or Not to Appeal
• What Do You Do When You Don'T Agree With the Results?
- Asset vs. Schedule
- State Statutes
- Requirements of the Appeal
- Could You Win the Battle but Loose the War?