Thursday, October 02, 2008
Golden Rule: Be Careful About Your Information Sources
Alternatively, Get It In Writing!
1. Auditors aren't going to be helpful. They're job is to reach into your wallet and extract money. Therefore, don't count on them to do the right thing by you. Sometimes, if you're lucky, the auditor will point out where you have overpaid taxes. Sometimes. See my articles on audits for more information.
2. Your accountant and lawyer probably have virtually no knowledge about sales and use tax. The vast majority didn't learn anything in college about it. And the subject isn't on the bar or CPA exams. So, unless they have developed a specific expertise, they generally don't know much about it. So if they tell you, "don't worry about," ask them for something in writing. Then they'll worry about it.
Oh, they know about income taxes. And because of that, they'll think they know about all taxes. But not this one. In fact, it's been my experience, that a professional who specializes in income taxes won't be an expert in sales and use taxes. And an expert in sales and use taxes won't be much help when it comes to income taxes.
3. You learned it wrong from whoever trained you. Either they didn't know, they've been doing it wrong, or something got lost during the training. Or you heard it wrong. Oral communications is the worst form of information transfer. This is why you should have a good sales tax manual.
4. The law is complicated. There are lots of places where it comes from. There are lots of interpretations, lots of ways to get it wrong. And there are lots of exceptions.
In other words, get it in writing, from an authoritative source that'll impress the auditor.
Sales Tax Guy