LOUISIANA DEPT OF REVENUE “FIELD AUDIT DIVISION” 2015 LDR/TAX PRACTIONERS WORKSHOP Joseph...

LOUISIANA DEPT OF REVENUE

“FIELD AUDIT DIVISION”2015 LDR/TAX PRACTIONERS WORKSHOP

Joseph Vaughn, Asst. Secretary, Group III

Debbie Jenkins, Group III Executive Assistant

Cynthia Pugh, Director – Audit Intelligence Team

Darlene Allen, Director – FA Sales Tax Division

Kevin Richard, Director – FA Income Tax Division

Clarence Lymon, Director – FA Excise Tax Division

Jay Frost, Director – Audit Review & Appeals Division

WHAT WE WILL DISCUSS TODAY

• Field Audit case, production and collection stats;

• Staff Count, locations• Use of Contract Auditors – stats• Voluntary Disclosure Program

LDR ORGANIZATIONAL CHART

AUDIT STATISTICSSUMMARY OF FIELD AUDIT SERVICES ROI/PRODUCTION CALCULATIONS

AVERAGE PRODUCTION DISCOVERED PER $1 INCURRED FOR PERIODS FYE 2009 - 2013

PERIOD TOTAL TOTAL AVERAGE FIELD AUDIT

FYE PRODUCTION EXPENSES RETURN ON EXPENSE

$ PRODUCED PER $1

FYE 6/30/2009 $ 578,998,718.00 $ 32,897,800.58 $ 17.60

FYE 6/30/2010 $ 821,338,497.00 $ 31,086,529.19 $ 26.42

FYE 6/30/2011 $ 403,139,043.00 $ 30,085,979.28 $ 13.40

FYE 6/30/2012 $ 465,245,607.00 $ 30,085,979.28 $ 15.46

FYE 6/30/2013 $ 306,631,891.00 $ 32,663,556.09 $ 9.39

TOTAL $ 2,575,353,756.00 $ 156,819,844.42 $ 16.42

Removing outlyer years

2010 and 2013 $ 1,447,383,368.00 $ 93,069,759.14 $ 15.55

AUDIT STATISTICS CONT.Field Audit ProgramReturn on Expenditures, Fiscal Year 2013-2014

From Jenny TayLocation Direct Reg Admin Compl Adm Gen'l Adm/OH Total Audit Collections ROE

1.25% Al-Fld Aud $200,283.12 $32,367.06 $232,188.48 $94,453.78 $464,838.66 $1,070,833.08 $2.307.47% BR-Fld Aud 1,198,721.41 0.00 1,389,679.28 565,318.56 $2,588,400.69 11,481,434.74 4.444.51% LF-Fld Aud 722,839.69 99.58 837,988.99 340,892.13 $1,560,928.26 15,655,546.39 10.032.23% LC-Fld Aud 358,107.87 27,478.18 415,154.92 168,884.13 $800,740.97 5,453,548.58 6.811.83% Mo-Fld Aud 294,081.83 1,047.49 340,929.45 138,689.37 $636,058.76 1,579,526.16 2.488.77% NO-Fld Aud + Cov. 1,406,785.43 70,206.87 1,630,888.17 663,441.82 $3,107,880.47 9,578,940.41 3.084.63% Sh Fld Aud 742,725.91 9,792.54 861,043.11 350,270.49 $1,613,561.56 7,715,352.18 4.780.02% Th-Fld Aud 3,267.17 28.40 3,787.63 1,540.80 $7,083.21 7,459,964.42 1,053.19

Fld Aud Regions $4,926,812.43 $141,020.13 $5,711,660.02 $2,323,491.07 $10,779,492.58 $59,995,145.96 $5.57

4.57% Fld Aud Serv-Exc $732,468.59 $849,151.78 $345,433.13 $1,581,620.378.88% Fld Aud Serv 1,424,201.29 1,651,078.40 671,655.16 3,075,279.69 17,847,218.069.09% Fld Aud Serv-Dallas 1,458,334.89 1,690,649.52 687,752.61 3,148,984.41 153,851,936.42

23.93% Fld Aud Serv-Houston 3,839,032.55 4,450,595.40 1,810,492.68 8,289,627.95 131,495,288.860.79% Fld Aud Serv-LA 126,853.40 147,061.31 59,824.23 273,914.710.00% Fld Aud Serv-NY 0.00 0.00 0.00 0.000.07% Fld Aud Serv-SF 10,921.64 12,661.47 5,150.66 23,583.111.26% Fld Aud Serv-Tulsa 201,740.07 233,877.52 95,140.88 435,617.590.71% Fld Aud Serv Dist Atl 113,427.51 131,496.66 53,492.56 244,924.170.67% Fld Aud Serv-Austin 107,686.48 124,841.08 50,785.08 232,527.56

Fld Aud Serv- Total $8,014,666.42 $9,291,413.15 $3,779,726.98 $17,306,079.57 $303,194,443.34 $17.520.15% Fld Aud Serv-Chic 23,279.03 26,987.41 10,978.42 50,266.44 0.00 0.000.72% Fld Aud Serv-VA 115,949.65 134,420.58 54,682.00 250,370.23 0.00

$8,153,895.10 $9,452,821.14 $3,845,387.40 $17,606,716.24 $303,194,443.34 $17.22

81.53% Total Fld Aud $13,080,707.53 $15,164,481.16 $6,168,878.47 $28,386,208.82 $363,189,589.30

From Expenditures FY14

AUDIT STATISTICS CONT.

The last five (2009 – 2013) years of Field Audit compliance activity has generated the following findings:

– FIELD AUDIT• Number of field audits performed = 11,270;• Total Collections = $1,210,897,442.33• ROE = $7.72 collected for each $1 spent. • FYE 2014:

– Audit discoveries = $435,178,610.02– Audit Collections = $363,189,599.30

AUDIT STATISTICS CONT.Summary of Completed Field Audits

* Fiscal Years 2010 - 2014

# % AVG Days

B Corporate Corporation Income & Franchise 2,583 25.52% 223.97

Excise Excise - Alcohol 1 0.01% 780.00

Excise - Beer 2 0.02% 219.00

Excise - HZ Waste 1 0.01% 39.00

Excise - Insp/Supv 14 0.14% 164.93

Excise - Tobacco 27 0.27% 137.74

Excise - Trans/Comm 8 0.08% 96.00

Fuel Tax FT-Distrib/Export/Blender 1 0.01% 42.00

FT-Supplier 12 0.12% 125.92

IFTA IFTA 314 3.10% 83.32

Other Audit - Motor Vehicle Sales 6 0.06% 54.33

Audit - Natural Gas Franchise 13 0.13% 194.00

Sales Automobile Rental 27 0.27% 73.26

New Orleans Exhibition Hall 147 1.45% 109.23

NO Hotel/Motel (4 col) 40 0.40% 240.18

Sales 6,235 61.61% 150.64

Sales Prepaid Cell Phone 11 0.11% 50.09

Statewide Hotel/Motel 92 0.91% 146.99

Severance Severance - Gas 37 0.37% 194.97

Severance - Minerals 2 0.02% 119.50

Severance - Oil 82 0.81% 265.76

Severance - Timber 2 0.02% 41.50

Withholding Withholding 169 1.67% 112.01

Total 9,826 97.09%

I Ind. Income Individual Income 291 2.88% 34.26

Individual Income - Composite 3 0.03% 128.33

Total 294 2.91%

Total 10,120 100.00%

AUDIT STATISTICS CONT.Year Avg.# Agents $Collections

6/30/94 120.5 $ 70,269,0676/30/95 115.5 $ 78,095,2146/30/96 129.2 $ 67,284,7396/30/97 124.6 $ 67,272,4936/30/98 125.8 $ 71,141,8376/30/99 119.4 $ 63,941,0946/30/00 117.6 $ 96,637,5536/30/01 110.4 $ 72,707,7116/30/02 106.9 $235,214,9466/30/03 108.5 $101,416,2126/30/04 109.4 $104,382,6956/30/05 104.5 $106,217,6496.30/06 100.8 $131,476,8646/30/07 99.2 $138,741,3356/30/08 99.9 $193,310,5236/30/09 99.6 $174,683,0436/30/10 99.8 $640,855,8056/30/11 103 $178,370,9736/30/12 104.4 $117,868,6936/30/13 101.2 $ 99,118,9286/30/14 104 $363,189,589.30

AUDIT STATISTICS CONCLUSION

• FY Ending 6/30/15 – YTD thru 12/31/2014– Audits Completed: 817.0 – Audit Production: $154,385,219.57– Audit Collections: $80,877,096.89

FIELD AUDIT DIVISION REORGANIZATION

• Field Audit Operations were generally managed by one Director level manager;– Managed all headquarters and district field

audit operations, as well as Audit Review and administrative staff.

• Field Audit Operations were structured by geographic areas– Each geographic area was managed by an Audit

Manager and Supervisors

FIELD AUDIT DIVISION PRE-REORGANIZATIONS CONT.

• Field Auditors covered these geographic areas, and approached audits in “audit the taxpayer and not just the tax”.–Auditors are cross trained to have at

least a minimum amount of training experience in all tax types.

FIELD AUDIT DIVISION PRE-REORGANIZATIONS CONT.

• The result of this structure was:– One Director level manager responsible for the

activities of 120 FAS staff;– Audit Management and staff that had to stretch

their activities across all tax types;– A very narrow and deep structure that stretched

our Field Audit staff that may be beyond their level of expertise.

– A “reactive” more than a “proactive” audit program.

COMPLIANCE DIVISION REORGANIZATIONS CONT.

• The Decision was made by the LDR Executive Team to re-organize both Divisions by “tax type”.

FIELD AUDIT DIVISION NEW STRUCTURE

FIELD AUDIT DIVISION POST-REORGANIZATION CONT.

• Expected Results:– Director level emphasis on audit operations by

specific tax type;– Flatter organizational structure;– Will allow Directors, Supervisors and managers

to concentrate on one or two specific tax types resulting in subject matter experts with a deeper understanding of tax law and theory;

INCREASING COMPLIANCE STAFF

• Approximately 48 positions have been added to the Compliance Divisions of LDR including– Field Auditors, Field Audit Supervisors, and

Revenue tax Auditor Specialists;– Compliance staff will be added in-state in areas

of perceived need, based on current staffing levels and areas of dense business activities;

– Compliance staff will be added to out of state metropolitan areas where the Department has historically sent multiple Field Audit trips.


• For a total cost of about $90K, it is estimated that for each new revenue auditor position created and filled the Department would see an increase collections, on average, by $200,000 in the first full year of employment, $450,000 in the second year of employment and $750,000 in the third year of employment.– Does not take into consideration collections

from the resulting voluntary compliance.


• We have a perpetual posting on the Civil Service website nor for these auditor positions.

• We feel that the practioner community has many qualified candidates for these positions available.

• If you or any of your colleagues are interested, please contact us.

COME TO THE DARK SIDE!

INCREASING COMPLIANCE FIELD AUDIT INCOME TAX DIVISION

CIFT / PIT Compliance Division Revenue Tax Director - Kevin Richard

Assistant Director - Alex Folz Assistant Director - Susan Oliver

Admin Assistant 5 - Annette Jenkins Vacant - Houston - Supervisor Krystal Bolton - Houston - Supervisor

LaVette Clark Houston Brittany Ambrose Houston

Gabrielle Hearon Houston Monica Jordan Houston

Matthew Tran Houston Arthur Metoyer, Jr. Houston

Ariona Williams Houston Kendrick Smith Houston

Elise Thomas-Brown - Houston - Supervisor Lambrini Piskioulis - Dallas - Supervisor

Carl Beverly Houston Dan Jesolva Los Angeles

Merle Edwards Houston Melissa Richardson Austin

Vinitha George Houston Anel Dorhauer Dallas

Chris Thompson Houston Susan Starnes Atlanta

Loan Nguyen Shreveport

Miguel Mandujano - Dallas - Supervisor

Karryl Romain - Houston - Supervisor Raymond (Max) Dupree Atlanta

William Beard Houston Terry Young Dallas

Romekia Lethermon Houston Leslie Shreve Virginia

Miguel Saenz Houston Desmond Chatman Dallas

Lachey Thompson Houston

Kent Roberts - Lafayette - Supervisor Nanette Morgan - Baton Rouge - Supervisor

Mitch Dronet Lafayette Kalisha Abram Baton Rouge

Michael Ganier Lafayette Shirley Snowberger Monroe

Laura Perkins Lafayette

Wayne Lockhart - New Orleans - Supervisor

Annette Broadway Covington Billy Pittman - Revenue Tax Auditor Specialist Houston

DeCarla Helton New Orleans Marcus Gaudet - Revenue Tax Auditor Specialist (WAE) Baton Rouge

Rong Tu Ye New Orleans Tracy Smith New Orleans

INCREASING COMPLIANCE FIELD AUDIT SALES TAX DIVISION

LGST Compliance Division Revenue Tax Director - Darlene Allen Assistant Director - Janice Cordell

Assistant Director - Vendetta Lockley Assistant Director - Alex Osemwingie

Admin Assistant 5 - Sam Cade Angela Chambers - Houston - Supervisor Casey Shaw - Shreveport - Supervisor

Kristal Gonzales Houston Annette Kotynia AlexandriaMark Lankford Houston Ashley Carrington Monroe

Pamela Ridley Houston Larry Elioff Monroe

Kewanna Johnson Houston Shelby Huff Shreveport

Elizabeth Nornholm - Houston - Supervisor Kelicia Lewis - New Orleans - Supervisor

Briana Thomas Houston Javon Franklin New OrleansRita Henry Houston Jason King New Orleans

Ha Tran Houston Kevin Johnson New Orleans

Yale Rideau Houston Kirsten Penn New Orleans

Stacey Young Houston Misha Williams New Orleans

Noble Guillory - Houston - Supervisor Lynette Richardson - New Orleans - Supervisor

Christine Hoang Houston Charles Bennett New OrleansRichard Reese Houston Kimberly Robinson Thibodeaux

Miranda Tyson Houston Nadia Major New Orleans

Kimberly Wood Houston Ivory Augillard Thibodeaux

Quatressa Weary New Orleans

Vacant - Houston - Supervisor

Jewell Harris Houston Cory Landry - Lafayette - Supervisor

Jordane Gunnells Houston Jeremy Gilbert Lafayette

Destinee McKinney Lafayette

Grogory Broussard Lafayette

Thaddeus Varmall - Dallas - Supervisor Janis Carpenter Alexandria

Alphonse Johnson Dallas

Pam Gautreaux Dallas Ann Gaines - Lafayette - Supervisor

Pansy Kennedy Dallas Cristy Mumphrey Baton Rouge

Tom Burke Oklahoma Chandra Labrie Lafayette

Chanda Molaison Lake Charles

Deborah Irvin - Dallas - Supervisor Dana Doucet Lake Charles

Desmond Stewart Dallas Joan Nyanchoka Dallas Tammy Hinds - Baton Rouge - Supervisor

Marcus Davis (starts 1/20/15) Dallas Melanie Bingham Baton Rouge

Nicole Phillips Atlanta Neonetta Devall Baton Rouge

Rosetta Futrell Baton Rouge

Lakeysha Meaux - Shreveport - Supervisor Troy McGehee Baton Rouge

Stacie Cowden Shreveport DeLisa Lloyd New Orleans

Cynthia Noble Shreveport

Donald Sweeters Shreveport Revenue Tax Auditor Specialists

Brittney Sanders Monroe Anthea Jones Dallas

Brandi Stafford Baton Rouge

Sikandra Clark New Orleans

INCREASING COMPLIANCE FIELD AUDIT EXCISE TAX DIVISION

Field Audit Excise Tax Division

Revenue Tax Director - Clarence Lymon

Revenue Tax Assistant Director - Sandra Malveaux

Administrative Assistant 5 - Michelle Shaffer

Sebrena Stewart Dallas

Dina DeLeon - Revenue Tax Auditor Supervisor

VACANT SLOT Baton Rouge

George Gaiennie Houston

Avra Gauthier Houston

Alicia Grant Houston

Dudley Washington Houston

Vickey King Dallas

Mark Yim Dallas

Pedro Weems - Revenue Tax Auditor Supervisor

Cassandra Weatherford Alexandria

Ken Foster Shreveport

Sheryle Cooper Baton RougeOneida Colleen Taule Shreveport

Deirdre McDondald Baton Rouge

Raven Owens Monroe

Shondra Cutno - Revenue Tax Auditor Supervisor

Cindy Jordan New Orleans

Danny Reid Baton Rouge

Joshua Coryell Baton Rouge

Vicki Simmons Baton Rouge

Lesia Robertson Thibodaux

INCREASING COMPLIANCE FIELD AUDIT INTELLIGENCE TEAM

Audit Intelligence Team

Revenue Tax Director - Cynthia Pugh

Revenue Tax Assistant Director - Amy Landry

Administrative Assistant 5 - Joyce Ringo

Employee Title

Deborah Anderson Rev Tax Aud Spec

Debra Guillory Rev Tax Aud Spec

Ha Louis Rev Tax Aud Spec

Terra Taylor Rev Tax Aud Spec

Pamela Fair Auditor-Info Sys 3

Lynda Amond ClassWAE Rev Tax Spec 2

Vernita Nelson ClassWAE Rev Tax Spec 2

Liana Techow ClassWAE Rev Tax Spec 2

Barbara Davis ClassWAE Rev Tax Asst Dir

Deborah Underwood ClassWAE Rev Tax Spec Supvsr

INCREASING COMPLIANCE FIELD AUDIT REVIEW & APPEALS DIVISION

Audit Review and Appeals Division

Revenue Tax Director - Jay Frost

Revenue Tax Assistant Director CIFT - Leonore Heavey

Revenue Tax Assistant Director-Sales Tax - vacant

Employee Name Position # Title

Leonore Heavey Rev Tax Asst Dir

Charlene Blanchard Rev Tax Aud SpecAlana Jackson Rev Tax Aud Spec

Teshaun Phoenix Moore Rev Tax Aud Spec

Lena Williams Rev Tax Aud SpecLaura Miguez Rev Tax Aud Spec

Rebecca Berry Rev Tax Aud Spec

Vacant Rev Tax Asst Dir

Kimberly Bruscato Rev Tax Aud Spec

Arthur Champ Rev Tax Aud SpecCarmoleta Chapman Rev Tax Aud Spec

Mark Dwyer Rev Tax Aud Spec

Patricia Porter Rev Tax Aud SpecRickie Addison Rev Tax Aud Spec

Michelle Shaffer Admin Asst 5

Lousat Dubois Admin Coord 4

Tressa Butler Admin Coord 2

VACANT Student Worker

CONTRACT AUDIT INITIATIVES

• LDR audits .4% of all registered taxpayers in Louisiana.

• Last year the Louisiana Department of Revenue engaged with the Rapides Parish Sales and Use Tax Office in a multi year joint endeavor for that agency to perform audits on behalf of LDR.

• The theory was that one auditor/agency could complete both audits with minimum disruption to the taxpayers operation.

CONTRACT AUDIT INITIATIVES CONT.

• Rapides Parish Sales Tax Office has eight auditors for one parish audit operation; the Alexandria Regional Office has two auditors to cover the ten parishes around Alexandria. (More auditors are about to be added to that area).

• LDR keeps complete control over what audits are performed, but it is generally taxpayers they are also auditing.


• LDR is in the process of also signing agreements with St. Charles Parish and St. Mary parish.

• LDR also engaged two contract audit firms to perform Louisiana sales tax audits, in conjunction with local audits they are performing. – BPA Associates, and Revenue Recovery Group


• All entities contracted to perform audits paid by the hours of audit services performed (no contingency agreements);

• All auditing entities provides a list to LDR of taxpayers they are requesting to audit;

• LDR retains complete control over which taxpayers are selected for audit;

• LDR performs all reviews of audits and assessments of liabilities.


• Productive? Efficient?• The three contracts have resulted in 97

audits performed;• $485,158.08 in liabilities discovered and

collection in progress;• Total Audit Fees paid = $52,521.52• $9.24 collected for every $1 spent.

VOLUNTARY DISCLOSURE AGREEMENT

• Voluntary disclosure is the process of reporting undisclosed liabilities for any tax administered by the Louisiana Department of Revenue. Taxpayers may anonymously enter into agreements and voluntarily pay their taxes with a reduced or no penalty.

• In most cases, taxpayers enjoy a limited “look-back” period.

• The voluntary disclosure program helps coordinate the registration and payment process and provides general responses to tax related questions.

VOLUNTARY DISCLODURE AGREEMENT CONT.

• Louisiana Department of Revenue has a voluntary disclosure program for all of the taxes it administers, including (but not limited to):– Individual Income Tax– Sales and Use Tax– Corporation Income and Franchise Tax– Severance Taxes, including Oil and Gas Severance Tax– Excise Taxes

VOLUNTARY DISCLODURE AGREEMENT

• Any taxpayer who has a filing requirement for a tax administered by the Louisiana Department of Revenue, – is not currently registered with the

Department for the same tax, and –has not been previously contacted by the

Department concerning their filing requirement

• is eligible for consideration of a voluntary disclosure agreement.

VOLUNTARY DISCLODURE AGREEMENT CONT.

• A company that is currently registered with the Department may request a voluntary disclosure agreement for an entity it has acquired by purchase or merger provided the acquired company would have qualified under the conditions listed above. – Only the undisclosed taxes of the acquired

company for taxes due prior to the acquisition or merger would be eligible for a voluntary disclosure agreement.

VOLUNTARY DISCLOSURE AGREEMENT CONT.

• A taxpayer who is registered but failed to file returns or who submitted returns, extensions, or payments for any tax for which the voluntary disclosure agreement (VDA) is requested is not eligible for consideration.

• These taxpayers must file the appropriate original or amended return(s) and pay the tax, interest, and delinquent penalty due.


• A taxpayer who has been contacted by the Department of Revenue concerning a liability or potential liability of tax for which a VDA is requested generally does not qualify. – This includes any contact made for the purpose of

performing an audit of the taxpayer’s records. – Disclosures relating to delinquencies or deficiencies

that are obvious and would routinely generate a billing if not otherwise self-disclosed are not eligible for consideration.

– Disclosures related to the non-filing affiliates of a taxpayer who has been contacted for audit are not eligible for consideration.


• After the tax and interest liabilities have been paid for the look-back period, delinquent penalties will be waived unless the tax being disclosed has been collected but not remitted.

• The look-back period is the period for which prescription would not have run had returns been filed timely.


• Generally, this includes returns due during the current calendar year and the three immediately preceding calendar years.

• The look-back period is established when the application is received by the Department.

• In the case of taxes collected but not remitted, the look-back period will include all taxable periods for which there were collected but unremitted taxes.


• You may apply anonymously by completing form R-60010 (Application to Request Voluntary Disclosure Agreement), which can be found on the Department’s website.

• If it is determined that you would qualify to participate in the program based upon your responses in the application, the Department of Revenue will mail a blank Voluntary Disclosure Agreement to you or your representative.

http://revenue.louisiana.gov/Miscellaneous/60010(7_14)F.pdf





• You may remain anonymous until after the agreement is signed by both parties.

• If you choose to forego anonymity and include your payment along with the voluntary disclosure application, please include your FEIN or SSN (as applicable) on your check and

• an application for account number (CR-1, R-16019) to assist in properly applying the payment.

• Make your check payable to the Louisiana Department of Revenue.


• Mail the voluntary disclosure application to:• Louisiana Department of Revenue

Voluntary Disclosure Program – Field Audit Services DivisionPO Box 4936Baton Rouge, Louisiana 70821-4936


• Or deliver it to:• Louisiana Department of Revenue

LaSalle BuildingVoluntary Disclosure Program – Field Audit Services Division617 North Third St, Room 562Baton Rouge, Louisiana 70821-5431

• Applications may also be faxed to 225-219-2740 or e-mailed to [email protected].

mailto:[email protected]

AUDIT INITIATIVES - CONCLUSION

• Secretary Barfield: “Closing the “Tax Gap”, which is the difference between what taxpayers should be paying under the law and what they are paying in practice”

QUESTIONS?

LOUISIANA DEPT OF REVENUE “FIELD AUDIT DIVISION” 2015 LDR/TAX PRACTIONERS WORKSHOP Joseph...

Documents

Transcript of LOUISIANA DEPT OF REVENUE “FIELD AUDIT DIVISION” 2015 LDR/TAX PRACTIONERS WORKSHOP Joseph...