Posted in: Best practices, Communication, Hiring & training staff, Internal controls, Sales and use tax, Special report, Tax compliance
Tax compliance has never been easy — and mistakes are always costly. But it seems the situation is about to get a lot worse. Transaction taxes — sales and use taxes, VAT, etc. — are all expected to see more enforcement and stepped up penalties in the next year or two.
The reason is simple: States need more funds, and lawmakers don’t want to hike the rates of voters who are already feeling pinched.
In fact, the signs are so ominous, 88% of companies said they expect to see more audits in the near future. That’s according to recent research from Sabrix.
What it means for Accounting
With more audits — and auditors who are less likely than ever to cut you some slack — even a small compliance error can snowball into big fines.
Take some time now to review your books and procedures. If there are any errors lurking in your books, you’ll want to find and fix them now — before auditors show up at the door.
Another good idea: Have a refresher meeting (or at least a memo) to remind other key department heads about the importance of getting Accounting the information you need.
Other departments don’t always realize the tax implications of, say, moving a piece of equipment from one facility to another. It’s vital they understand that you’re asking for transaction details not just because “it’s procedure,” but because it can have serious consequences to your company’s tax compliance.