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A Practitioner’s Perspective Presentation to Minnesota Revenue September 1, 2010 Twin Cities Tax Professionals Discussion Group 1

A Practitioner’s Perspective

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A Practitioner’s Perspective. Presentation to Minnesota Revenue September 1, 2010. Twin Cities Tax Professionals Discussion Group. Twin Cities Tax Professionals Discussion Group. Organized August 2007 - PowerPoint PPT Presentation

Text of A Practitioner’s Perspective

  • A Practitioners Perspective

    Presentation to Minnesota RevenueSeptember 1, 2010Twin Cities Tax Professionals Discussion Group*

  • Twin Cities Tax Professionals Discussion GroupOrganized August 2007

    Purpose: Provide tax practitioners a forum to discuss tax issues and resolutions while maintaining high ethical standards.

    Members: 91 tax professionalsCPAsEAsOther tax professionalsSole practitioners to large Twin Cities firmsTwin Cities Tax Professionals Discussion Group*

  • Todays Topic If we, the practitioners, were the Minnesota Tax Auditors, what changes to current audit practices and procedures would we recommend to promote more efficient and effective audit resolution?

    Twin Cities Tax Professionals Discussion Group*

  • MN Revenue Strategic Plan*Twin Cities Tax Professionals Discussion Group

  • MN Revenue Strategic Plan*Twin Cities Tax Professionals Discussion Group

  • Data Warehouse Roadmap*Twin Cities Tax Professionals Discussion Group

  • Quote Key*Quotes from MN Revenue Strategic Plan are in green.

    Quotes from Data Warehouse Roadmap are in blue.

    All other information is our commentary.

    Twin Cities Tax Professionals Discussion Group

  • IntroductionMinnesota Revenue Mission StatementMake the revenue system work well for Minnesota.

    Minnesota Revenue VisionEveryone pays the right amount: no more, no less.

    Twin Cities Tax Professionals Discussion Group*

  • Strategy 1We will identify and address patterns of noncompliance.Focus compliance efforts on those who deliberately evade the tax laws, not on those who make an effort to get it right.

    Matching IssuesClosely monitor third party reporting requirementsIdentify more non-reporters and under-reporters (e.g. construction contractor reporting requirements)Cross reference subcontractor line items with Form 1099 filings

    Compliance IssuesMatch tax filings to business registrationCross-reference within Revenue and other state agenciesTwin Cities Tax Professionals Discussion Group*

  • Strategy1 (Contd)We will identify and address patterns of noncompliance.

    Taxpayer SelectionRedirect focus to those who deliberately evade the tax lawsVisit sites in non-audit capacity When errors are made dont assume they are intentional

    Industry SelectionConcentrate on non-compliant industriesCover all industries

    Tax PreparersFocus on questionable preparersPublicize preparer enforcement actions

    Twin Cities Tax Professionals Discussion Group*

  • Strategy 2We will work to ensure that all citizens receive the best possible services and information.

    Taxpayer Education FocusBusiness start-upsWebinar for all new business taxpayers (modeled after Federal student loan webinar)

    Initial auditsFocus on education

    Continue and expand taxpayer education during auditsFocus on long-term complianceAssist taxpayers in developing tools for compliance

    Twin Cities Tax Professionals Discussion Group*

  • Strategy 2 (Contd)We will work to ensure that all citizens receive the best possible services and information.

    CorrespondenceAccurate and professionalReasonable and easy to understand timelinesClear, concise, and consistentSecure e-mail optionSupervisors name and contact information

    Additional Tax Season AssistanceAuditors assist with phones/e-mails from January to AprilComplete previously started audits during this time

    Twin Cities Tax Professionals Discussion Group*

  • Strategy 3We will deploy systems and processes that help us keep pace with taxpayer and employee needs and expectations.

    Develop standards of expectation for the audit processStandardize response times for both sidesRespect among all parties Avoid sudden deadlines

    Plan the audit and document the information request prior to initial meetingAssess the complexity of the taxpayer and tax topicsTailor document requests to specific taxpayer

    Twin Cities Tax Professionals Discussion Group*

  • Strategy 3 (Contd)*We will deploy systems and processes that help us keep pace with taxpayer and employee needs and expectations.

    Auditor training in specific industries

    Establish a method for approval of changes in procedures adopted in response to audit findings to increase future compliance Twin Cities Tax Professionals Discussion Group

  • Strategy 4We will identify and recommend changes to align the revenue system with economic activity. Goal: Find productive smaller cases for entry-level auditors and to reduce our number of no change audits.

    Reconsider this goalSkews sample size to smaller tax casesLow cost-benefit

    Schedule shadow audits at larger companies to train Revenue employeesExpands training of entry-level auditors

    Twin Cities Tax Professionals Discussion Group*

  • Strategy 5We will provide a flexible, supportive and rewarding environment for our workforce.

    Be aware of workloadsRevenue employeesTaxpayerTaxpayer representatives

    Twin Cities Tax Professionals Discussion Group*

  • Strategy 5 (Contd)*We will provide a flexible, supportive and rewarding environment for our workforce.

    Specific education suggestionsMentor new auditorsTake advantage of outside continuing educationIncrease training prior to solo fieldworkAssign audits based on areas of expertiseEmphasize professional communication skillsInclude federal tax laws and treaties

    Twin Cities Tax Professionals Discussion Group

  • Strategy 6We will ensure that our systems and practices protect the privacy and security of taxpayers. Power of attorneyContinue willingness to be cooperativeSend notices to POA automaticallyDirect contacts to POA only

    Twin Cities Tax Professionals Discussion Group*

  • Strategy 7We will identify and adapt to changes in technology, the economy and demographic trends.

    WebsiteCurrent website is superior to mostExpand use of secure portals Pursue system of E-services similar to IRS

    Twin Cities Tax Professionals Discussion Group*

  • Strategy 8We will identify benchmarks to measure our success when setting goals and making decisions.

    Measure the effectiveness and cost of activities, and shift resources to those that demonstrate the greatest success in achieving our mission.

    Expand emphasis beyond easy targets

    Make an effort to avoid appealsIncrease efficiency by resolving issues during audit processAllow for give and takeWeigh benefit of resolution against cost of appeal

    Twin Cities Tax Professionals Discussion Group*

  • SummaryMinnesota Revenue Mission StatementMake the revenue system work well for Minnesota.

    Minnesota Revenue VisionEveryone pays the right amount: no more, no less.Current legislative initiatives concentrate on audits as revenue collection toolsContrary to no more, no less philosophyTwin Cities Tax Professionals Discussion Group*

  • Minnesota Tax Stakeholders*Twin Cities Tax Professionals Discussion Group

  • Thank You*We appreciate this opportunity.

    We hope it is the beginning of an on-going working relationship.Twin Cities Tax Professionals Discussion Group

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