1. 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
These procedure discussions are for a wide ranging size operations of bars and restaurants. Big and Small.

2. WHAT WE WILL DISCUSS TODAY
Field Audit case, production and collection stats;
Staff Count, locations
Use of Contract Auditors – stats
Voluntary Disclosure Program

3. LDR ORGANIZATIONAL CHART

4. AUDIT STATISTICS
SUMMARY OF FIELD AUDIT SERVICES ROI/PRODUCTION CALCULATIONS
AVERAGE PRODUCTION DISCOVERED PER $1 INCURRED FOR PERIODS FYE
PERIOD
TOTAL
AVERAGE FIELD AUDIT
FYE
PRODUCTION
EXPENSES
RETURN ON EXPENSE
$ PRODUCED PER $1
FYE 6/30/2009
$ ,998,718.00
$ ,897,800.58 $
FYE 6/30/2010
$ ,338,497.00
$ ,086,529.19 $
FYE 6/30/2011
$ ,139,043.00
$ ,085,979.28 $
FYE 6/30/2012
$ ,245,607.00 $
FYE 6/30/2013
$ ,631,891.00
$ ,663,556.09 $
$ ,575,353,756.00
$ ,819,844.42 $
Removing outlyer years
2010 and 2013
$ ,447,383,368.00
$ ,069,759.14 $

5. AUDIT STATISTICS CONT.

6. 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

7. Summary of Completed Field Audits
AUDIT STATISTICS CONT.
Summary of Completed Field Audits
* Fiscal Years # %
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
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
42.00
FT-Supplier 12
0.12%
125.92
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
73.26
New Orleans Exhibition Hall
147
1.45%
109.23
NO Hotel/Motel (4 col) 40
0.40%
240.18
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
119.50
Severance - Oil 82
0.81%
265.76
Severance - Timber
41.50
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
294
2.91%
10,120
100.00%

8. AUDIT STATISTICS CONT. Year Avg.# Agents $Collections
6/30/ $ 70,269,067
6/30/ $ 78,095,214
6/30/ $ 67,284,739
6/30/ $ 67,272,493
6/30/ $ 71,141,837
6/30/ $ 63,941,094
6/30/ $ 96,637,553
6/30/ $ 72,707,711
6/30/ $235,214,946
6/30/ $101,416,212
6/30/ $104,382,695
6/30/ $106,217,649
6.30/ $131,476,864
6/30/ $138,741,335
6/30/ $193,310,523
6/30/ $174,683,043
6/30/ $640,855,805
6/30/ $178,370,973
6/30/ $117,868,693
6/30/ $ 99,118,928
6/30/ $363,189,589.30

9. 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

10. 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

11. 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.

12. 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.

13. COMPLIANCE DIVISION REORGANIZATIONS CONT.
The Decision was made by the LDR Executive Team to re-organize both Divisions by “tax type”.

14. FIELD AUDIT DIVISION NEW STRUCTURE

15. 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;

16. 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.

17. INCREASING COMPLIANCE STAFF
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.

18. INCREASING COMPLIANCE STAFF
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!

19. 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
Gabrielle Hearon
Monica Jordan
Matthew Tran
Arthur Metoyer, Jr.
Ariona Williams
Kendrick Smith
Elise Thomas-Brown - Houston - Supervisor
Lambrini Piskioulis - Dallas - Supervisor
Carl Beverly
Dan Jesolva
Los Angeles
Merle Edwards
Melissa Richardson
Austin
Vinitha George
Anel Dorhauer
Dallas
Chris Thompson
Susan Starnes
Atlanta
Loan Nguyen
Shreveport
Miguel Mandujano - Dallas - Supervisor
Karryl Romain - Houston - Supervisor
Raymond (Max) Dupree
William Beard
Terry Young
Romekia Lethermon
Leslie Shreve
Virginia
Miguel Saenz
Desmond Chatman
Lachey Thompson
Kent Roberts - Lafayette - Supervisor
Nanette Morgan - Baton Rouge - Supervisor
Mitch Dronet
Lafayette
Kalisha Abram
Baton Rouge
Michael Ganier
Shirley Snowberger
Monroe
Laura Perkins
Wayne Lockhart - New Orleans - Supervisor
Annette Broadway
Covington
Billy Pittman - Revenue Tax Auditor Specialist
DeCarla Helton
New Orleans
Marcus Gaudet - Revenue Tax Auditor Specialist
(WAE) Baton Rouge
Rong Tu Ye
Tracy Smith

20. 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
Alexandria
Mark Lankford
Ashley Carrington
Monroe
Pamela Ridley
Larry Elioff
Kewanna Johnson
Shelby Huff
Shreveport
Elizabeth Nornholm - Houston - Supervisor
Kelicia Lewis - New Orleans - Supervisor
Briana Thomas
Javon Franklin
New Orleans
Rita Henry
Jason King
Ha Tran
Kevin Johnson
Yale Rideau
Kirsten Penn
Stacey Young
Misha Williams
Noble Guillory - Houston - Supervisor
Lynette Richardson - New Orleans - Supervisor
Christine Hoang
Charles Bennett
Richard Reese
Kimberly Robinson
Thibodeaux
Miranda Tyson
Nadia Major
Kimberly Wood
Ivory Augillard
Quatressa Weary
Vacant - Houston - Supervisor
Jewell Harris
Cory Landry - Lafayette - Supervisor
Jordane Gunnells
Jeremy Gilbert
Lafayette
Destinee McKinney
Grogory Broussard
Thaddeus Varmall - Dallas - Supervisor
Janis Carpenter
Alphonse Johnson
Dallas
Pam Gautreaux
Ann Gaines - Lafayette - Supervisor
Pansy Kennedy
Cristy Mumphrey
Baton Rouge
Tom Burke
Oklahoma
Chandra Labrie
Chanda Molaison
Lake Charles
Deborah Irvin - Dallas - Supervisor
Dana Doucet
Desmond Stewart
Joan Nyanchoka
Tammy Hinds - Baton Rouge - Supervisor
Marcus Davis (starts 1/20/15)
Melanie Bingham
Nicole Phillips
Atlanta
Neonetta Devall
Rosetta Futrell
Lakeysha Meaux - Shreveport - Supervisor
Troy McGehee
Stacie Cowden
DeLisa Lloyd
Cynthia Noble
Donald Sweeters
Revenue Tax Auditor Specialists
Brittney Sanders
Anthea Jones
Brandi Stafford
Sikandra Clark

21. INCREASING COMPLIANCE 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
Alicia Grant
Dudley Washington
Vickey King
Mark Yim
Pedro Weems - Revenue Tax Auditor Supervisor
Cassandra Weatherford
Alexandria
Ken Foster
Shreveport
Sheryle Cooper
Oneida Colleen Taule
Deirdre McDondald
Raven Owens
Monroe
Shondra Cutno - Revenue Tax Auditor Supervisor
Cindy Jordan
New Orleans
Danny Reid
Joshua Coryell
Vicki Simmons
Lesia Robertson
Thibodaux

22. INCREASING COMPLIANCE FIELD 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
Ha Louis
Terra Taylor
Pamela Fair
Auditor-Info Sys 3
Lynda Amond ClassWAE
Rev Tax Spec 2
Vernita Nelson ClassWAE
Liana Techow ClassWAE
Barbara Davis ClassWAE
Rev Tax Asst Dir
Deborah Underwood ClassWAE
Rev Tax Spec Supvsr

23. 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 Spec
Alana Jackson
Teshaun Phoenix Moore
Lena Williams
Laura Miguez
Rebecca Berry
Vacant
Kimberly Bruscato
Arthur Champ
Carmoleta Chapman
Mark Dwyer
Patricia Porter
Rickie Addison
Michelle Shaffer
Admin Asst 5
Lousat Dubois
Admin Coord 4
Tressa Butler
Admin Coord 2
VACANT
Student Worker

24. 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.

25. 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.

26. CONTRACT AUDIT INITIATIVES CONT.
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

27. CONTRACT AUDIT INITIATIVES CONT.
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.

28. CONTRACT AUDIT INITIATIVES CONT.
Productive? Efficient?
The three contracts have resulted in 97 audits performed;
$485, in liabilities discovered and collection in progress;
Total Audit Fees paid = $52,521.52
$9.24 collected for every $1 spent.

29. 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.

30. 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

31. 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.

32. 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.

33. 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.

34. VOLUNTARY DISCLOSURE AGREEMENT CONT.
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.

35. VOLUNTARY DISCLOSURE AGREEMENT CONT.
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.

36. VOLUNTARY DISCLOSURE AGREEMENT CONT.
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.

37. VOLUNTARY DISCLOSURE AGREEMENT CONT.
You may apply anonymously by completing form R (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.

38. VOLUNTARY DISCLOSURE AGREEMENT CONT.
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.

39. VOLUNTARY DISCLOSURE AGREEMENT CONT.
Mail the voluntary disclosure application to:
Louisiana Department of Revenue Voluntary Disclosure Program – Field Audit Services Division PO Box 4936 Baton Rouge, Louisiana

40. VOLUNTARY DISCLOSURE AGREEMENT CONT.
Or deliver it to:
Louisiana Department of Revenue LaSalle Building Voluntary Disclosure Program – Field Audit Services Division 617 North Third St, Room 562 Baton Rouge, Louisiana
Applications may also be faxed to or ed to

41. 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”

42. QUESTIONS?