Ban on private auditors charging taxpayers for the costs of conducting a tax audit headed to Senate for final debate

Legislation that would prevent private, for-profit auditors from recovering costs associated with completing a tax audit directly from a taxpayer is ready for final debate in the Senate.

The Senate Fiscal Responsibility and Economic Development Committee unanimously approved HB158 by Rep. Paul Lee, R-Dothan, at its Wednesday, Feb. 26, meeting, sending the House-passed bill to the Senate.

Under state law, the state, cities and counties can contract with private auditing or collection firms to audit taxpayers and collect taxes due.

This legislation would prohibit a private auditing or collecting firm from recovering any of the following costs from a taxpayer:

  • Professional service fees, including but not limited to attorney fees and charges for accountant services.
  • Travel costs.
  • Salary or personnel-related expenses of the firm.
  • Auditing or collecting related costs.

Lee said a recent court case involved a taxpayer being charged more than $35,000 in expenses that private auditors normally charge to its government clients rather than taxpayers.

The companion legislation is SB130 by Sen. Clay Scofield, R-Guntersville.

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