Requirements Added for Third Party Audits of Sales and Use Tax in Louisiana.

New requirements have been added regarding contracts entered into with private agencies or auditing firms for the auditing of sales and use tax in Louisiana. Among the new requirements are the following: Upon the completion of an examination or audit for a taxpayer, providing audit leads by the private agency or auditing firm to other local collectors is prohibited by taxpayer confidentiality requirements. All taxpayer information obtained by the private agency or auditing firm for the audit or examination must be returned to the taxpayer, and the agency or firm shall not retain any copies of the information. All taxpayer related information generated by the agency or firm shall be delivered to the tax collector. The private agency or auditing firm must limit its functions. It is only allowed to audit the taxpayer’s books and records. It is not allowed to perform any assessment or collection of tax, as these are required to be performed by the local collector. Any individual performing an examination or audit for the private agency or auditing firm must have a lead auditor who has one of the following: an active CPA license, a Bachelor of Science degree with a minimum of 18 hours in accounting, or a certified tax examiner’s certificate issued by the Louisiana Association of Tax Administrators. If a private auditing firm conducts an audit, the taxpayer shall be given notice by the local tax authority advising them that the audit will be conducted by a third party agency and whether payment to the auditing firm is contingent on the collection of tax or is in any other way dependent on the audit outcome. (LA RS 47:337.26; Act 1029 (H.B. 845), Laws 2010, effective July 8, 2010).

Posted on January 9, 2011