Although we discover significant unreported and under reported value, we often recommend that the smaller variances be considered immaterial.
Our audit approach for appraising business personal property looks for material compliance, not strict compliance. With my Masters Degree in Public Administration, Evans & Associates bring an administrative perspective as compared to an accounting perspective to our auditing philosophy. It is possible to project numbers of significant non-compliance by saying that 60%-90% of all audited accounts are being discovered. Using the cost approach, we are able to arrive at a very precise estimate of value for business equipment and fixtures. Therefore, some will argue, any variance from that figure is discoverable. We, on the other hand, based upon our experience, consider a very high non-compliance rate to be abnormal. It is more likely to be an indication of an overly aggressive auditor or audit program.
The cost approach to value is a way to estimate business equipment valuation that the Assessor uses for tax purposes. While we do look for and discover significant unreported and under reported value, we recommend that the smaller variances be considered immaterial. They are useful as a learning tool for educating the business taxpayer for improved future compliance and also produce positive public relations between the county and taxpayer.
Additionally, we consider taxpayer education as one of the most valuable services we offer. During the audit process, we talk extensively with the business owners and controllers. We spend considerable time informing and educating them on the details of business personal property listing. We educate them as to the types of assets reportable and how to appropriately list them for reporting purposes. The non-taxation of smaller variances allows us to teach them while generating significant good-will towards the county.
In summary, we will strive to assist you in the auditing of business personal property in your county. We will provide you with a high level of satisfaction, personal service, and an administrative perspective as we educate the taxpayers and bring increased equity into the tax base of your county.
Phil Evans, President & Owner
some cool facts
Numbers speak for themselves
History and Philosophy of the BPP Audit at E&A
Evans & Associates, a Charlotte based independent consulting firm, provides business personal property tax auditing services to a number of North Carolina Counties. Specializing in field auditing and related valuation consulting services, Evans & Associates is providing a professional level of quality services that support the duties of the Tax Administrator.
The affiliation agreements that these North Carolina counties have entered into with Evans & Associates are based upon their recognition that in some cases it is more cost effective to privatize some or the entire field auditing services. In addition, the personal property valuation consulting services are frequently used by Business Personal Property Tax Appraisers to assist them in valuing specific troublesome properties such as in the case of a bankruptcy or in the occasional valuation appeals brought forward by professional consulting firms. In each case, we have worked with the in-house staff to develop a cost effective level of service and support that was designed to assist them in performing their duty in establishing and confirming equity in the business personal property tax base.
In some instances, accounts audited are selected specifically by the county based upon a preconceived suspicion as to the accuracy of the listing; usually due to an effective desk-auditing program. Other agreements are designed to take advantage of an economy of scale that has been achieved by consolidating out of state audits and the resulting cost savings that can be passed onto the client counties. In other instances, the county contracted out their entire audit program to Evans & Associates, resulting in a very close relationship between the personal property Tax Department and Evans & Associates.
Evans & Associates has completed over 10,000 audits, discovered over $1,000,000,000 in unreported property, and has a less than 1/2% appeal rate to the local board. No audits have been appealed before the NC Property Tax Commission. Evans & Associates is also identifying and discovering unlisted businesses, with millions of dollars in value being added to the tax scrolls.
Evans & Associates provides services on a fee basis or a contingency agreement basis. Fees are based not on the size of the account but rather on the average length of time that it takes an audit to be completed. It is generally insincere pricing to equate the size of the account to its complexity and cost to complete. Large accounts usually have very sophisticated fixed asset systems supporting the accounting records to aid in the reconciliation; while often, smaller accounts have no records at all. Thus, a small account may at times take more time than larger accounts. Our pricing is based upon the entire universe of accounts to be audited. We have offered this single price fee structure to aid the county in budgeting for the most ease of audit cost management. The contract proposed includes a small additional fee to non-North Carolina accounts to cover the cost of the travel. These accounts are scheduled when a sufficient number of accounts are available to justify the trip.
The return on the dollar is generally in the 3:1 or 4:1 range depending upon the degree of previous audit involvement, the taxation of inventory in some states, the degree of compliance among the local taxpayers. Our contingency fees provide a general level of acceptable return to the county. Estimates on the return to the County are only that, estimates.
Phil Evans and his staff at Evans & Associates have significant experience in dealing with large and small firms, tax representatives, attorneys, and tax consulting firms from across the nation. Evans & Associates consultants have audited firms in major cities across the United States including Atlanta, New York, Chicago, Houston, Dallas, Los Angeles, Portland and Seattle. Businesses of all types including major manufacturers, nationwide retailers, banks and financial institutions, and service companies have been audited.
Bringing EQUITY and EDUCATION into the tax base of your county.
we love what we do
We consider taxpayer education as one of the most valuable services we offer. During the audit process, we talk extensively with the business owners and controllers. The non-taxation of smaller variances allows us to teach them while generating significant good will towards the county.
the big picture
We think the smaller variances are very useful as a learning tool for educating the business taxpayer, improving future compliance, and producing a positive public relations experience between the county and taxpayer.