State and Local Tax (SALT) partner Bruce Ely was quoted in State Tax Notes on the key issues addressed by Alabama’s recently signed bill that precludes cities and counties from entering into contingency fee arrangements with private auditing firms. The bill, SB 335 (Act 2016-406), also says that any final assessment or forced collection action based on an audit conducted by a private company will not be issued to a taxpayer until it has been signed by a public official or employee designated by a self-administered county or municipality.
“The final version of the bill addresses several key issues when dealing with private auditing firms in Alabama,” said Ely. Key issues include:
Confirming exactly which cities and counties the firms currently represent
Confirming that their auditing contracts with these cities and counties – and any side agreements – don’t contain any sort of contingent fee provision
Forcing the cities and counties to actually review and sign off on final assessments issued by their auditing firms
Ely explained that the final version is a good start, but that some areas of the law regarding private auditing firms and self-administered cities and counties still need to be clarified or tightened up. “I hope we can revisit those ideas in the spring,” he added.
The complete article, “Alabama Governor Signs Bills on Third-Party Contract Auditors and Tax Incentive Disclosure,” appeared in State Tax Notes on May 17, 2016. (login required)