Taxation director says fewer audits result in higher revenue

CARSON CITY -- State Taxation Director William Chisel acknowledged Wednesday that the number of business audits performed by his staff has declined -- in part because of a drop in staff -- but the auditors are concentrating their work on companies where the return potentially is larger.

"The dollars (in unpaid taxes they find) are coming up," he said. "We are performing more complex audits. We are spending more time on them."

Chisel said the number of auditors who review whether businesses are paying the taxes they owe the state has dropped to 55, compared with 71 in 2009. He said he will have to analyze whether to request additional auditors when the Legislature meets next in 2013.

Chisel responded to criticism made by two former Taxation Department employees in Wednesday's Review-Journal who complained that the state is losing tens of millions of dollars a year because an inefficient computer accounting system prevents its staff from performing audits in a timely matter.

In its annual report released Jan. 15, the Taxation Department said 1.24 percent of all Nevada businesses were audited in the past fiscal year, down from 2.32 percent six years ago.

But Chisel, who began his job in September, said while the number of audits has declined, they have produced additional tax revenue for the state, up
$1.2 million in the past year.

He said his staff "doesn't have significant problems" with the accounting system, which he said is "working fine."

"Some people have trouble with it," he said.

Chisel said 80 percent of his auditors have college degrees, but none is a certified public accountant.

Salaries range between $39,000 and $69,000 a year, depending on their experience.

Chisel is a CPA who formerly was a senior auditor for the Gaming Control Board and chief of the state Division of Internal Audits.

The two former employees were not critical of Chisel but of former Taxation Director Dino DiCianno.

He resigned in March, one day after telling legislators his staff was not auditing mining companies because they were not skilled in handling such businesses.

Contact Capital Bureau Chief Ed Vogel at evogel@reviewjournal.com or 775-687-3901.