Kansas auditors find leaks in tax bucket

Kansas auditors find leaks in tax bucket

Corporate tax receipts in Kansas dropped from $211.7 million in fiscal 2001 to $93.4 million for fiscal 2002, according to a recent report. In a sample of 53 corporate tax returns, the Legislative Division of Post Audit found $12.8 million worth of discrepancies in tax credits favoring corporations.

The national economic downturn was the primary reason for the steep drop in corporate tax receipts, but other factors included faulty paper record-keeping and the Revenue Department's inability to track corporate tax credits, the auditors said. There are no computerized records of the state's 17 different corporate tax credits, according to the report.

The auditors have recommended setting up a database to track corporate tax credits, cleaning up the current credit spreadsheets, and developing a system to identify companies that should file returns but don't.

For several months in mid-2001, tax credit claims were accepted without question during a changeover to a new computer system, the auditors found. Almost 80 percent of corporate tax credits weren't reviewed in calendar 2000, they said.

The Revenue Department said it is working to upgrade accounting for corporate taxes, identify companies that fail to file returns and increase its audit rate for corporate taxes.

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