In its 2016 regular session, the Alabama Legislature required unregulated, for-profit auditors to make some improvements in their business model.
WHAT TO EXPECT IF AUDITED
Specifically, Act No. 2016-406 (SB335/HB375) requires for-profit auditors contracted by cities and counties to:
- Show businesses the signed and dated contract with the city or county.
- Let the business know whether the local government uses the Alabama Tax Tribunal, a forum for assessment challenges available since 2014. If the government has opted out of the tribunal system, it has to hire an independent hearing/appeals officer who is not affiliated with the private auditor to conduct hearings.
- Get a local government official to sign off on any final assessment or forced collection.
- Use only auditors with a four-year accounting degree who have completed a certification program administered by the Alabama Local Tax Institute of Standards and Testing (ALTIST). As of Oct. 1, 2016, that certification program must include a course on customer relations and professional courtesy.
State law does not allow for-profit auditing firms to collect or assess taxes, interest, court costs or penalties on a contingency basis. This legislation adds license fees to that prohibition.
HOW TO FILE A COMPLAINT
The law also required ALTIST to establish a hotline for taxpayer complaints. That hotline has been in place since Jan. 1, 2017.
To file a complaint against a for-prodit auditor,
call the toll-free hotline at 1-855-638-7092.
Act No. 2016-406 requires ALTIST to transcribe each complaint, and then, beginning April 1, 2017, prepare quarterly reports of complaints and forward those reports, with the transcripts, to the private firm that is the subject of the complaints. These reports are to be “made available” to the local governments that contract with that private firm, according to the law.