Business Audits
The Audit Division performs routine to complex audits of business operations to determine accurate assessments for local taxation of businesses.
The Audit Division performs routine to complex audits of business operations to determine accurate assessments for local taxation of businesses. These audits not only validate financial calculations but also ensure that license classifications are appropriate for the business being conducted.
Audit of New Businesses
The City Code provides for a new business to estimate gross volume for its business license until a full calendar year of operation has been completed. Thereafter, the preceding calendar year's gross volume is reported for the next license year. The City Code also provides for the Commissioner of the Revenue to adjust the tax on initial estimates based upon the true amount of such gross.
Audit of Continuing Businesses
The tax applicable to the business license is computed annually based on preceding year gross volume. The audit indicates any difference between actual and reported gross volumes for the audited period.
Basic Audit Procedures
The audit letter requests books and records reflecting business transactions for the time period indicated in the letter. Annual financial summaries are generally accepted. Such summaries may include:
- Bookkeeping records
- Federal tax returns
- General Ledgers
- Profit & Loss Statements
Trial Balances
If more than one license is involved (either by additional classifications or locations), a breakdown must be provided. Copies of any other city or state business licenses must also be furnished.
Audit Appointments
Information as to the time, date, and location of the audit is included in the audit letter. You may mail or fax the required information prior to the appointment date. Upon receipt of this information, your appointment will be canceled, or if necessary, request additional information. Once all information is provided, the audit performed in our office may take 30 minutes or less.
Interest and Penalties
- Interest is assessed on audits showing a tax-due status. Additional interest will be assessed on balances not received within thirty (30) days from the audit date.
- Penalty may be assessed at the rate of ten percent (10%) of any audited tax due. A copy of the audit reflecting all volume adjustments (if any) required by the code will be sent to the taxpayer.
Extensions and Appeals
A one-time extension, with the exception of a summons, may be granted. You may call or write to reschedule for a specific date and time. A business audit may be appealed after results are received. The basis for the appeal along with all supporting documentation must be included in the appeal. A document indicating appeal rights accompanies each audit. It can also be found on the Review of Assessment (Appeal of Audit Findings) tab.
Please call the Audit Division with questions related to business audits.
Hours of Operation: Monday - Friday, 8 a.m. - 5 p.m.
Application for Review of Assessment
Any person assessed a tax due on an audit may file an application to review or appeal the audit findings. The application must be filed in good faith and include the following:
- Name and address of taxpayer and taxpayer's identification number
- If the applicant is different from the taxpayer, the name and address of the applicant, and a power of attorney letter of representation
- Copy of "Notice of Assessment"
- Tax periods challenged
- Remedy sought
- Detail of each alleged error in the assessment
- Grounds upon which the taxpayer relies
- Any other facts relevant to the taxpayer's contention
All properly filed applications for review will be acknowledged by the Commissioner's office when accepted. At that time, all collection activity will be suspended until the date of the Commissioner's Final Local Determination. Interest will continue to accrue until paid or abated. If you have questions regarding this procedure, please contact the Audit Division.
Hours of Operation: Monday - Friday, 8 a.m. - 5 p.m.