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Old 03-05-2013, 07:39 PM
 
Location: High Point, NC
97 posts, read 253,619 times
Reputation: 90

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Perhaps the state of North Carolina is taking advantage of the improving economy or making up for lost sales tax during the recession or both, but there is a huge push this year as I understand it to recoup back taxes, especially business taxes with an emphasis on IFTA license carriers. A recent study showed which states (and some provinces in Canada who are members of IFTA) are more likely to see what types of fraud they can expect to find based on their fuel tax rates, the rates of surrounding states and the penalties they impose for each type of fraud. If you're a one-truck, independent carrier and have filed fraudulent records or if you're part of a multimillion dollar shipping corporation which fudges numbers to take advantage of tax credits, expect audits and aggressive collection efforts. The North Carolina Department of Revenue is acting as the collection agency for any IFTA taxes owed to the state that have not been paid.

In addition, legislators are considering doing away with state personal and corporate income taxes. However, our sales taxes will go through the roof if they get their way. I don't believe it's a matter of swapping one tax for another just for the sake of it- obviously the plan is to get more money out of our pockets and into state coffers, and the getting rid of the income tax is the bone they're throwing us.

I'm not making an argument for or against any of the measures the state of North Carolina is taking to increase their revenue. I do want to put the subject on the table, however and would like to know what other North Carolinians know about the changes taking place. I'd also like to hear opinions for or against any tax laws that have been made or are being proposed for 2013.
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Old 03-05-2013, 08:08 PM
 
Location: The Triad (NC)
28,484 posts, read 62,084,629 times
Reputation: 32141
Quote:
Originally Posted by laneynewport View Post
Perhaps the state of North Carolina is taking advantage of the improving economy or making up for lost sales tax during the recession or both, but there is a huge push this year as I understand it to recoup back taxes, especially business taxes with an emphasis on IFTA license carriers..

I'm not making an argument for or against ...I do want to put the subject on the table
How about citing some objective source for what you understand to be a huge push?
Thanks.
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Old 03-05-2013, 09:13 PM
 
12,577 posts, read 13,300,457 times
Reputation: 8896
Quote:
Originally Posted by MrRational View Post
How about citing some objective source for what you understand to be a huge push?
Thanks.
What he said, no harm in providing a link or the source.
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Old 03-07-2013, 01:28 AM
 
Location: High Point, NC
97 posts, read 253,619 times
Reputation: 90
I'm not demonizing the state for taking advantage of streamlined record-keeping and more tax returns, property records and transactions being processed online, allowing for cross referencing and easier detection of possible unpaid taxes and fees, willfully avoided or not. But there is a concentration on increasing revenues, partly, in my opinion, to make up for lost revenues due to decreased state sales tax during the latest recession and because taxes that were evaded during that time are easier to detect now. Here's one link I read when I was looking into this after a friend mentioned it to me. http://www.dor.state.nc.us/aboutus/s..._fy2013-15.pdf

And here's a study I found very interesting regarding motor fuel tax evasion overall, and how states including NC can set tax rates more efficiently to increase revenue. It also discusses how tax rates can either deter tax evasion and fraud or encourage it, and discusses how to identify what types of fraud are most likely to be committed by transportation companies based on their profile (number of employees, yearly revenues, etc.). http://onlinepubs.trb.org/onlinepubs...rp_rpt_623.pdf NC has already identified more common types of fuel tax fraud in our state and they've focused their efforts accordingly

Although the state is focusing on IFTA tax evasion and collecting from companies who owe back taxes, it's not their sole focus. They're also taking advantage of increasing online personal records and transactions, like property tax payments and residents filing yearly income taxes electronically. Nothing wrong with this, but it is worth sharing with other NC residents- any mistake found on a personal tax return will most likely result in an audit of other returns as far back asthe law allows. This would be a hassle at best and could mean the discovery of other mistakes and further taxes/interest/penalties. Mistakes/fraud found in business/corporate taxes filed, especially over a number of filing periods (quarterly) could result in taxes, fines and penalties totaling more than the company is worth, meaning the business may well be better off going bankrupt since the state (having made the Department of Revenue the sole collections agency for IFTA Carrier fines) would be within its rights to seize the company property and shut it down.

There is also talk about making significant changes in NC's tax code. In short, income tax would be done away with but state sales tax would increase. This isn't a done deal but is being discussed and is an issue for NC residents to keep an eye on. It's part of a larger plan to make up for some pretty dismal economic years that affected our state's income just as it affected ours. Personally, I'd rather NC regain lost revenue through these measures than having law enforcement officers increase traffic stops and license checks and having fines jacked up to ridiculous amounts like some other states have done. Tax Reform :: WRAL.com

There are many other online resource, including information and minutes of state legislator's meetings, objectives and goals re: changes in tax rates, meetings of different NC legislator committees and their agendas and so on. This information is available to us so we might as well keep up with it. I know it's not everyone's idea of a good read but I thought I'd share the information since I'd read some of it. We all need to keep tax records for seven years minimum- many keep them for ten years or longer. But anybody who's been lazy about keeping receipts for charity donations claimed on taxes or home office expense records or annual statements of any kind might want to take the time to get their documents in order and have them on file just in case a minor discrepancy leads to years of audits and possible through-the-roof fines. I'm certainly not trying to come off as some voice of doom and I'm not particularly concerned about any of this with the exception of the pretty radical tax code changes that are being proposed, but it is information NC taxpayers and business owners might find useful. I hope the links have shed some more light on the point I was making. If there are any questions, please let me know. And again, I'm interested in hearing others' thoughts on the proposed tax changes. Thanks.
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