Decline in audits simply isn’t acceptable

To the editor:

The state of Nevada is in a revenue crisis. We don’t have enough revenue to pay for the things we need, including services for children, higher education and other services to our state’s vulnerable populations. There are backlogs and delays in state agencies due to funding and personnel cuts.

With workers retiring, leaving state service or just leaving Nevada, there are fewer state workers now than there were before. Those who provide services day in and day out to Nevadans are struggling, too, with decreased salaries and benefits in exchange for their increased workloads.

At a time when our state is struggling to provide critical public services, it comes as a surprise that, as reported by the Review-Journal’s Ed Vogel, the number of business tax audits in the state has gone down significantly in the past six years (“Taxation director says fewer audits result in higher revenue,” Wednesday).

The Department of Taxation performed 1,668 audits in 2005-2006 fiscal year and only 1,066 audits this past year, according to its most recent annual report. At a time when the Department of Taxation should be auditing businesses to ensure citizens are benefiting from all funds legally owed to Nevada, a 36 percent decrease in audits around the state is unacceptable.

Even more dismal is the “audit coverage” rate, where only 1.24 percent of businesses are being audited, down from 2.32 percent in the 2005-06 fiscal year.

The state taxation director has blamed the decrease in tax audits on a number of factors including a reduction of staff at the agency. It makes no sense for a critical agency in our state government that is responsible for ensuring the revenues due to our state are paid during this these cash-strapped times to cut staff. The more auditors we have in the Department of Taxation, the more certain we can be that corporations are paying their fair share in revenue.

And this isn’t about businesses paying more in taxes — this is about making sure everyone is playing by the existing rules. With this staff shortage at the agency, why isn’t the director scrambling to the Interim Finance Committee to get the needed employees to ensure proper collection of taxes that are owed?

The tax director also stated recently to the Review-Journal that the agency is performing more complex audits, which take more time. That may be fine, but a decrease in 36 percent of tax audits around the state seems to be a significant reduction. This becomes more suspect when you take into account that as late as last year, the entire mining industry had not been audited for the previous two years and was operating under a “self-reporting” tax system.

Instead of trying to ensure businesses are paying their fair share in Nevada, the Department of Taxation appears to shrug its shoulders in the face of criticism. Ultimately, the losers from this lax attitude are our state’s seniors, college students, disabled, children and all residents.

Harry Schiffman

Pahrump

The writer is a 14-year state employee and secretary-treasurer of AFSCME Local 4041, which represents Nevada state employees.