Form St 07-25 - Sales Tax - 2007 Page 8
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11job correctly. This would include the proper completion of forms, like the 556’s, that are
utilized daily in the Corporation’s business. Taxpayer is a manager who was educated in
management. He testified that he reviewed some of the 556’s but did not quantify the
number and frequency of such reviews nor recall the specific 556’s reviewed.
Taxpayer’s testimony was silent as to whether he even provided his employees with
training regarding the proper completion of the 556’s or even sought the assistance of
others for such a task. Taxpayer’s testimony also is silent as to whether any training of
his staff on any subject, let alone the proper manner in which to account for a trade-in on
the 556, occurred. Moreover, his review of his employees’ work in this area seems poor,
if not totally remiss, and contrary to his educational instruction and job responsibilities.
Taxpayer chose to start a business which he would manage. He opted to utilize a
CPA to prepare his income and payroll taxes but failed to seek his CPA’s advice on how
to properly account for trade-ins with regard to financed and leased vehicles on 556’s
until the Corporation was actually audited and the issue was presented as a problem.
Taxpayer claims his CPA never told him that there is a difference in whether trade-in
deductions are allowed for leased and financed vehicles. However, Taxpayer admits he
never asked his CPA about trade-ins or any other aspect of the 556’s until the
Department, as the result of an audit, informed him he had not properly accounted for
trade-ins on the 556’s. Taxpayer alleges it would have been impractical for a CPA to
review the voluminous number of 556’s that the business produced. But Taxpayer did
not even ask his CPA to review the 556 form and explain the proper manner in which to
account for the various transactions that may arise like the accounting of trade-ins for
leased or financed cars. It is clear that Taxpayer’s CPA neither advised nor prepared the
556’s of the Corporation which resulted in the Corporation’s tax liability, and as such,
Taxpayer cannot hold his CPA accountable for the liability which serves as the basis for
the current dispute.
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