2AUDIT SECTIONIs responsible for ensuring taxpayers are in compliance with reporting requirements for various taxes that the Department administersAudits are conducted throughout Nevada and the other forty-nine states through our diversified audit program
3TYPES OF AUDITS conducted are on: Sales/use taxModified Business Tax/Business TaxCigarettes and Other Tobacco ProductsLive Entertainment (non-gaming)Tire TaxLiquorNet Proceeds of MineralsOther Misc. Excise Taxes
4AUDIT PERIODThree years back if the business has filed sales tax returnsEight years back if the business has not filed sales tax returnsNRS
5CRITERIA FOR AUDIT SELECTION Risk-based business activitySale/purchase of businessClosing businessLarge refund requestare all possible selection criteria.
6FIRST CONTACT BY THE AUDITOR IS TO: Learn about your businessAsk about business/recordsSchedule an appointmentGet information to send a Confirmation Letter
7RECORDS NEEDED FOR THE AUDIT For sales and use tax : Copies of previously filed sales/use tax returns and supporting paperworkGeneral ledgers/chart of accountsSales journals or registersSales invoicesResale certificates, exemption letters, shipping docs to support exemptionsFederal Income Tax returns
8RECORDS NEEDED (continued) Purchase invoices/credit card statementsDisbursements journals/check registersFixed asset schedulesBank statements/cancelled checksCash register “Z” tapesConstruction contractsOther records may be needed depending on the business
9RECORDS NEEDED (continued) Records needed for Modified Business Tax (MBT)Copies of filed Employment Security reports (form NUCS 4072)Copies of previously filed MBT returnsRecords of Employee Health Benefits paid or direct medical expenses paid by employer
10RECORDS NEEDED (continued) Records needed for Live Entertainment Tax audits (non-gaming)Records of gross receipts collected for admission charges including:Entertainment feesCover ChargesTable reservation feesRequired minimum purchase of food, refreshments or merchandiseList of vendors participating in eventCopies of leasing agreement (if promoter)Records of gross receipts from sale of food, refreshments or merchandise at event
12“What is an ECD”?An ECD stands for the Estimated Completion Date of the audit. This does NOT mean how much time the auditor will spend at your place of business.The ECD should allow for both parties to an audit, the taxpayer and the auditor, to get everything resolved in an audit, get administrative approval and send the Deficiency Notice, if any.The Taxpayer Bill of Rights requires that the Department notify you of that timeframe. So, don’t be scared of that date….its a convenience to you more than anything else.NRS
13AUDIT METHODS The Department uses Sampling methods whenever possible. A walk-through of thebusiness will also be done.
14AUDIT WORK PAPERS Consist of Preliminary schedules(for Taxpayer review to see if you have additional information)Audit exit letterFinal schedulesBilling letter (Deficiency Notice)
15Deficiency NoticePay attention to the due date – 45 days from date of letter.Failure to take action on or before that date will result in additional 10% penaltyTypes of action that need to be to be taken on or prior to Due Date must include one of the following:1. Pay bill2. Appeal3. Contact your Revenue Officer
16If you agree with the audit Pay the assessment by the due dateor…..contact the DepartmentRevenue Officer forpossible installment payment agreementImportant!
17If you disagree with the audit Complete and send in the Petition form andrequest a redetermination if you have more information or documents, orrequest an Oral Hearing for legal issues
18Written ResponseMost tax issues can be addressed by the Department of Taxation. Please be advised that any responses to inquires made to the Department are only binding if put in writing, such as Nevada Revised Statutes, Administrative Code, Nevada Tax Notes, or in written correspondence.18
19Our offices are open Monday-Friday DEPARTMENT OF TAXATION Contact InformationOur offices are open Monday-Friday8:00 AM – 5:00 PMContact our Call Center at(closed during lunch)Carson City:1550 College ParkwaySuite 115Carson City, NVSouthern Nevada:Grant Sawyer Office Building555 E. Washington AvenueSuite 1300Las Vegas, NV 89101OR2550 Paseo Verde ParkwaySuite 180Henderson, NV 89074Reno:4600 Kietzke LaneBuilding L, Suite 235Reno, NV 89502