Minnesota Department of Revenue Audit Initiatives
The issue
Since 2003, the legislature has increased funding for the Department of Revenue (DOR). This allowed the department to increase the number of auditors collecting money owed to the state. When this initiative began the DOR was netting a 12:1 return. Today the return is approximately 4:1. This increase in auditors also means an increase in the number of inexperienced auditors. There has also been a significant reduction in support staff at the Department of Revenue.
In 2010 we were successful in our efforts to require some of the new money allocated for the next compliance initiative be set aside for training and mentoring of newly hired auditors. In 2011 another initiative was passed. This will result in approximately 70 – 80 new collections and audit staff at the Department of Revenue. This initiative has a slightly different focus. It includes more use of tax analytics systems to make the process more efficient for all parties involved.
Why you should care
MNCPA members continue to express frustrations with how the DOR is conducting audits. CPAs are spending a lot of time assisting state auditors through the process. The DOR has been charged with returning a specific amount of money and must follow the law. They also need to ensure new auditors are adequately trained and have time to follow a mentor.
Your legislators may not fully understand the negative impact these initiatives are having on your clients and their constituents. The actual net results may be impacted by unintended increased inefficiency in the audit process.
How you can help
The MNCPA will continue to work with the DOR and educate legislators on the impacts of putting inexperienced auditors in the field. If the legislature plans to continue funding new positions we will work to ensure they are also providing the DOR with adequate resources to do proper training and sustain a mentoring program.
Contact the MNCPA at 952-831-2707 or govrelations@mncpa.org if you have examples we can use in presentations to legislators.