State Board Of Equalization Going After Restaurant Owners
OSC.BOE.PUB164.pdf
Publication provided by the BoE discussing the new outreach program
OSC.BOE.OutreachInTheNews.pdf
Board Of Equalization Outreach program in the news
If you have received a letter or are subject to a Board Of Equalization Restaurant Audit, please contact us to learn more about how to protect yourself, your company and limit any potential fines or new sales tax debt.
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MAILING LIST EMAIL 4/22/09
Dear Friends,
Over the past two years the State Board Of Equalization has been conducting a “pilot program” to determine the lost, unreported or otherwise uncollected sales and use tax revenue. Upon completion of the pilot it was determined that over 3% of all CA businesses operate out of compliance and according to the “marketing collateral” as a result of this pilot, a “Compliance & Outreach Program has been created”.
Considering the financial position of this state it should really come as no great shock that such a “helpful” program is being created but what is more important is that the collateral and information provided does not seem to mention or preclude a sales tax audit. The follow up actions likely to be taken for each particular location are, therefore, probably based on the specialists findings of this pilot program. (i.e. we can assume these findings will determine any further investigation, audit or compliance requirements.)
The key phrase “they may ask for more information about your business operations” should answer almost all your questions. It is the view of many that this operation is intended to directly correlate a sellers permit with factual data regarding your business (number of seats / hours of operation etc) and therefore the intention is that based on their recent budget requests, the State will use heuristic technology to electronically identify sales and use tax fraud.
As of Q4 08, retailers have begun receiving notifications of an intended visit and its purpose. The current review team is organized via zip code and your particular locale may or may not be in the short vs long term list: no further guidance has been issued as to who will be reviewed and in what order. The intention, however, is to visit every non-residential property over an x year period so eventually, your business will be reviewed.
I would hope that all recipients of this email have their licenses, permits and other operating requirements up to date and in order – as the tax gap gets larger we can expect stronger enforcement (outreach) on a local level. For any liquor licensed location, please remember that the BoE is the one agency that can suspend your right to sell or consume liquor with barely any notice and in these difficult times, ignoring any obligations can create immediate and indeed negative ramifications.
Recent reports have shown that the delinquency period allowed by the BoE prior to enforcement and attempts to revoke your sellers permit or suspend your liquor license have halved. With so many businesses closing, the collections activity is increasingly improving in efficiency.
I have attached the official marketing kit for this program along with a recent article from a Huntington Beach magazine discussing same issues.
Many Thanks
James
