Tammy Interview

Was manager and went back down to senior level manager
Not a typical manager leaving after 40-42 hours, worked about 50 hours?
Actually goes out and do the audit
In order to deal with not directly he client, have a power of attorney
Local audits – in states
Out of state audits – can’t get to the big ones every three to four years because too small of a staff
Try to get to local big companies every three to four years
Metros – may get to or never see them
Try to rotate agents, if an agent missed something – never able to prove anything was wrong with a company.
Assist goes out with a lead, next time may be the lead so they have a relationship – don’t do it as well as they used to
Companies change so often, companies rarely complain
Every once and awhile a tax payer will ask to have one of the same people
Will work to try to make audits go smoother than last time

Size of Company

50-60 person companies, hiring freeze, lost some agents, trying to get interns back
Normal senior agents travel out of state 8-10 weeks – takes a long time (part of this due to loosing agents)
Was a freeze for promotions, but it was lifted – takes a long time to process
Turnover – very small if been with company a long time, great retirement package, and incentives
Younger people feel they aren’t getting promoted fast enough and have left to peruse other avenues
Salary freeze – at least 2 years without raise
Furlo day – not getting paid
People can only do so much work, not requiring them to do more work other than out of state travel

Audit times

Metro audits are supposed to be about 225 hours a year

Audit process

Red flags – auto part store – abuses of licenses sheets
1141 audits – once a year send out letters to counties and cities and ask if they want us to look at anyone and that can initiate it
Local program – keep doing the same people over and over
Other companies use programs to pick certain things, but their programs do not do this year, not up and running
Out of state – look at returns to see if something is wrong or missing
A lot of metro side is random selection, or saw something on audit and peaked curiosity
Cities get a print out of all taxes that are collected for their cities by vendor
Look at what used to be paid, or if they are not paying any city tax but know they should be
Some of the city knowledge is hearsay
Now counties have the right to administer their own tax, have a right to collect their own or not collect their own, if we collect, we have responsibility to audit for them
Been getting bad press about doing what the state it supposed to do and had to go and prove they were doing it right (Is this time worthy?)
If a big company wants to be audited, it takes time to get them on the list, then time for them to allow you to audit, could take up to 4 years
Now needed to update people on the process and status of an audit (companies)
Clean up process to get back audits takes time, sometimes have to spend time emailing to get their stuff done
Some companies have compliance and audit with the same people and when it’s separate it’s bound to go smoother, when together they have bigger demands, out of state audits turned around in a year
One out of state audit took 3 because they were done with work papers in one year, but they company themselves took 2 years, taken to lawyers

Software

Audit selection is all manually
No funding right now to buy software to do this
Seems that things take too much time to get everything done
Funding is the only thing stopping the software as of now
Hopefully with new software it will give us something
Used to use a program that assigned points to metro companies, but did not know how to interpret these so it was pointless
How do you assign points that you know nothing about?
Hoping the new software helps
In the state of Colorado if you meet certain criteria, they are supposed to be filing everyone
If only filing on one or two companies and should be filing on 500, we have no way of knowing that
Personal perception – new software, as a main frame, really useful, will take some getting used to. Not using it go audit, just using it to get knowledge to state knowing there is an audit so will not work on that without going through auditing first
Easier to track what’s going on with taxpayer and history

Planning Process

Have time wasted, when waiting for client to get info, when in state can go back to office, when out of state can’t, so time wasted
Call a person and get a feel for person under the phone
What times of things are we going to be able to audit, and record keeping
Then detail any data that we will need, use a sampling software, if run sample, run it up front before walk out the door
Do I have to pull invoices themselves or will they do it
If two people are at audit and have to pull both invoices but only one computer, one time is wasted, so need to find that up front
Have a list of stuff to ask before hand (not everyone has the same information)
Some people spend weeks pre auditing – not sure what they are doing
Preplanning is up to everyone’s own discretion- pre audit checklist, has never used it and never knew it existed
A long time ago had a manual and told you how to do everything about the audit. Bc no computers read statue books over and over, now computer makes it easier to get info, but you don’t know if it’s right because you don’t read statue book over and over

Training

When started, really intense
No training later
Then 5 or 6 years ago started a new training programs – power points and booklets
Trained two groups of people
Then someone else took over and they didn’t use the stuff
New people keep coming in and going
Current person – started to give material to people but had them read it on their own instead of discussing
Training program only takes a week or two and is only a half a day
Managers started to do training classes for a bit, and then someone came in and nixed this

PLR

Private letter ruling – someone writes in with a case scenario asking them how they should handle it and we give them back our opinions on that case only
Private Letter Rulings –issued by them and didn’t even know it existed, specifically had to do with auditing insurance companies, why if there is a new ruling would you not have brought it up at a pay day work shop
Starting to try to train the new auditors a little better, but people have been around, their training is lacking.
Have to pay to get a private letter ruling, companies apply, only issued one or two

Suggestions

How to make our auditors more efficient, how do we work together, process, how can we rate our agents better
Goal is compliance
Love revenue
Has gone out and given million dollar refunds
Want people to comply

Communication with taxpayers

Audit department sends out own bills and refunds, comment system isn’t very go
Now with new program, will be better at explaining to them why bill or refund

Performance Reviews

Up and down
State itself mandates that we give these
Three door system – walk on water, door, like everyone else
Now no middle ground
Rating process is mandated by state and can’t do a lot about that
How we choose to rate is our choice
Employees are frustrated with huge mid categories when you work your butt off and the next person gets coffee every morning and in same category
Feels there is nothing to do to motivate employees anymore
Any suggestions?
Could have own review just for group?
Use it to help pick an audit
Most things are based on seniority
Some managers will fill in everything they are supposed to and other will wait to the last minute and then just mark average
Some categories at discretion of supervisor
Employees are aware of the weights of reviews and the different areas
Quantity and quality are equally weighted here
Sometimes they can’t go hand in hand
Hard to articulate what you want

Expending Resources

30-40 percent on small audits
Kentucky uses only 10 percent on small audits
Can’t tell you for sure that doing large audits will bring in extra money
If spent more money on 2 and 3s, make more money
Depends on how many you get too and how compliant they are
Small is supposed to be 80 hours the most, big 300 hours
Saw that they make a lot of money on out of states audits and tried to get more money to do out of states
Law of diminishing returns, can go out of state and only do a few, you make sure they are the best of the best, but as soon as you double that number you are going to have to do quite a few dogs
Next year will be harder and harder, just doing because you have to and the money is not there

Collections

Not collection 49%
Collecting penalties and interest (interest always collectible)
If auditor was wrong, takes it down
A lot of time taxpayers won’t furnish data, so there is a ton of money being sat on and when it finally gets settled it might be zero.
Auditor error, taxpayer wouldn’t provide data and current point in time, law changes
Have a protest section, can deal with penalties and black and white penalties
Conferi section – looks at audits and plays lets make a deal, sometimes lose 50% of money, don’t know who was right or wrong
Don’t have the money to go to court and unless you have a rock solid case you don’t want to go to court

Workshops

Department gives pretty often
Online courses
Industry wide courses
Managed audit – many other states use, a way for taxpayer to work through audit first and then auditor goes out and checks, the client learns about the process

Managed Audit

Used for companies with minimal issues, hard to know who to sell it to and who not, confused as a staff (seems to take more time to do the audit now)
Could be beneficial if knew who to sell it too and were able to send it out to a certain amount of people – have no idea what to do
Some states use it a lot – did a poor job of selling it to us, so don’t know how to use is, managers did poor job
Manufacturers have an easy way to hide stuff, but small companies could make it work, and not a huge conflict of interest
Educates and saves them in the future, at current point in time it is work, and they don’t necessary want to take that time. Down the line a good tool
At start, it is more scary than helpful at first
Lower level agents usually take care of it
RA 1,2
Usually not an intern
Reviewed by manager when they are done

Education Clients

Companies have been audited hundreds of times so they know, pretend they don’t know, but really they do

Motivation

Government employees who get a bad name and they don’t all deserve it, but some do
Some ppl are just self motivated
Seems to be getting worse with no pay raises and such, wears on some people
Senior auditors get first choose as audit, affects motivation for the lower level people, not always pleasant
Sometimes there is a rotation so it goes through order
Tried to get audits with senior agents to help them learn and get some training
How can you train other people if you have never been trained

State audit on department

Most of the suggested changes have been implemented
State auditor will be at our presentation
Report is rather old and times change, dollar amounts on different audits change
A lot of it had to do with audit selection process

Talent

Feel they missed talent on front side
A lot of talent hasn’t left
Problem – when started a long time ago- you worked hard to get there, now people walk through the door and expect to get ahead fast
Work hard, earn your job, and prove it
Would you be willing to come into the schools to do it?
Have done it, but all want to get out there to the big firms
Love not working weekends or nights
Great job if you want your own life
Am my I own boss, I do what I want and when I want and no one looks over your shoulder
Some audits it’s great to have a standardized, they think everything fits, but doesn’t always fit but didn’t catch it because it wasn’t always there.
Need to teach people to think outside the box
Standardization is fine to a point, but then it gets to a point of fill in the blanks

Rewards

Can’t give money, can’t give time off
If they are more efficient do they get to see this? No
Last year awesome year, but this year 4 furlo days
Can’t rate on dollar production, but need to make right amount of dollars in the right amount of time
One time someone sued them because they felt they were discriminated against because they didn’t get to choose their audit so they didn’t get enough money
If there is a refund, then are they really going to give it so that they can be more productive

Management Hiring

Managers who come in do not go over well
Everyone feels entitled to a job and refuses to help new people
They feel like nothing is their problem
Sometimes people get moved just so they are out of the way
Managers are getting promoted who have only been in spots that have been there for a couple years and now managing people who are trying to audit this
Clients have no one to get help on agent if they do not like it, can call CPA or Attorney and smaller companies do not have this
No unbiased third party
Larger clients know the game and play it
Smaller clients don’t know how to do it, and hopefully the agent isn’t screwing him
Doesn’t know to even look for things
Little guys doesn’t know there is protest procedures
Try to make the agents tell him that they can protest
Protest is on the back of the bill but most people don’t see this

Auditing selection

Try to change the list yearly
How often do they get on the list and off – keep track and changes constantly
Very manual process
Denver Business Journals puts out lists each year, so look to see if we haven’t seen before or moving up the list
Auditors choose audits sometimes by location, or take a easier audit
There are people at a level and you see the audit they have chosen and you should be sending a new person out to get them that experiences
Audit ranking system – it’s possible to have but they don’t do it, so no way to make sure the more experienced take the harder ones
Would be great if someone would put their feet down so they don’t take it

Communication externally

Don’t really communicate outside of office to other offices in Department of Revenue
Once a year have a meeting to go over laws (in own section)
All agents supposed to attend
Conference call in people from out of states
Try to DVD as well so they can get training that has been on during the year
Wealth of knowledge, but sadly they are not there to help or get the knowledge they know
Conference calls are more of a training situation, not really talking back and forth

Client selection

To start – intern – just do 10 metro audits and get a random selection of types
Then instate – get a list and say oh look here is an audit in Loveland
When you get into the higher levels you have more of a feel for what you want to audit
Out of state – been there a while and know where you want to go on vacation or what time of audit you would really like to look at.
How would people react to being placed at an audit without being picked – at one point in time they tried probably (could pick state)
People like what they are used to, or don’t like it and complain, whatever’s best is best and sometimes change is for the best

Revenue Newspaper

Sent out once a month sent out to the entire department of revenue
Now on computer, don’t know if anyone is reading it
Has some law changes and upcoming legislative but it’s not always final or up to date

Meetings