Is it that time already?

Part of a series on essential actions you need to take

As I go through the newsletters, there is one thing I repeatedly see that makes me shake my head. People lose appeals, refunds, and are assessed penalties constantly, And there is one thing that happens way too often. It may not be the only problem, but it is certainly one way to lose money. They were late!

The company either filed their sales tax returns late (sometimes years late, but that's not what I'm talking about here). Or they didn't file for the refund* until after the deadline. Or that appeal notice got sent in a few days late.

And nothing probably brings more joy to the revenuers back at the office than to get a refund request, look at the date, and realize they can easily throw it in the "tough luck" pile. They don't have to think, they don't have to fight it. The taxpayer simply screwed themselves out of the opportunity.

Now, I don't expect you to memorize the due dates for all of the things you have responsibility for. But we're accountants! Well, most of us, anyway. This should be relatively easy for left-brained people like us to organize. If we were all sales and marketing folks, I could see the problem. But we're accounting types. This should be easy! Create tickler files. Set up a due date calendar. There's this thing called Excel that may work too!

If you're filing a return, when is the due date? Will the postmark date be sufficient? Not always, by the way.

If you have to file advanced deposits, when are they due?

If you need to file for a refund, when does it have to be submitted? How many years do you have? If you're going to do self-audits, figure out how frequently to do them to meet the refund deadlines.

If you've been audited and you're going to file an appeal, when does the state need to have it in their paws?

Now, you all know I hate to offend CPAs and attorneys, so I'll try to be gentle here. The thing is, in many of the cases where the taxpayer lost money or the opportunity for a refund or an appeal, the filing was the responsibility of, ahem, those outside professionals. Now, it's not necessarily because their bad people. It's just that, well, have you seen their offices? It amazes me, whenever I visit my CPA to give him our income tax** paperwork, that he's able to find anything. I have to be careful where I step! One twist of an ankle, and Mr. Johnson's medical deductions become a scuff mark.

So you need to take the responsibility. This is the easiest thing to screw up, and the easiest to solve. Make sure your professional files on time. Heck, call them and ask! Remind them! And if you really want to be a snot, demand proof that they did, in fact, mail the paperwork on the correct date.

This is possibly overkill, but I'm beginning to see the benefit of sending key returns and paperwork via certified mail. That way you have proof you mailed it. I wouldn't bother with the "return receipt" though. I just want to have proof it was mailed. It costs a little extra but it gives you proof in the unlikely event that the state busts you. But the real benefit is that it makes everyone a little more careful when they know they can't get away with, "well, I'm pretty sure I dropped it in the mailbox on August 31."

Bottom line? This problem is too easy to avoid. Watch your deadlines and make sure the paperwork gets filed on time. Geez.

Sales Tax Guy

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*Don't assume that a state's statute of limitations is the same as the time for you to file an appeal. The statute of limitations may be three years in your state, but the time to file for a refund may only be one year. So check it out!

**Yes, I have a CPA do my income taxes. I really hate income taxes. All those dang forms to fill out.....


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