RECORDS FOR AUDIT
Taxpayers that are audited, and do not have detailed records for sales or purchases, are subject to a wide variety of indirect audit methods for the determination of gross and/or taxable sales. Usually, these are businesses that handle cash such as restaurants, pubs, and taverns.
On April 28, 2003, Administrative Law Judge Timothy Alston, in Order DTA #819157, ruled in favor of the Petitioner in the Matter of the Petition of Voicemate.com. The order, which cannot be appealed by the Tax Department, explained that, “The Division’s interpretation of the statutory phrase ‘in a form which is able to be processed’ as used in Tax Law section 1139 is far too expansive.”
Background
The taxpayer, a computer software company called Voicemate, applied for an overpayment refund of sales and use tax for computer hardware used in designing and developing custom computer software for sale, as per the exemption provided by section 1115(a)(35) of the New York State Tax Law. The Tax Department received the refund claim and supporting schedules on November 18, 2001. Six months later, the Tax Department decided to refer the matter to a field audit.