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Indiana issues call for external audit of tax agency

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Indiana budget leaders are looking for an external auditor to review the state Department of Revenue after workers discovered $526 million in errors in recent months.

The Republican-controlled State Budget Committee is set to meet June 4 to consider the responses, which must be submitted by next Wednesday. Democratic gubernatorial candidate John Gregg called this week on the state to speed up the audit.

Senate Appropriations Committee Chairman Luke Kenley said state lawmakers consulted with state budget director Adam Horst in drawing up the formal request last week.

The audit will aim to find out how the department lost track of $320 million in corporate tax revenue that was collected over four years along with another $205 million in income taxes, said Kenley, a Republican from Noblesville who is a member of the State Budget Committee.

"My understanding is they are moving as fast as they can," he said.

The lawmakers' request says the state needs a company to assess the information technology department at the tax agency and internal financial controls designed to catch errors before they balloon.

The overall review is expected to be a two-step process starting with a risk assessment taking between three weeks and six weeks that will help determine the scope of the audit, followed by the audit itself.

While it's not clear how long the audit will take, political leaders will be watching for results ahead of the Nov. 6 election between Gregg, Republican Mike Pence and Libertarian Rupert Bonehom to replace term-limited GOP Gov. Mitch Daniels

Gregg has been trying to make hay out of the Daniels administration's troubles, bringing textbooks like "Accounting for Dummies" to various news conferences at the Statehouse.

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  1. Apologies for the wall of text. I promise I had this nicely formatted in paragraphs in Notepad before pasting here.

  2. I believe that is incorrect Sir, the people's tax-dollars are NOT paying for the companies investment. Without the tax-break the company would be paying an ADDITIONAL $11.1 million in taxes ON TOP of their $22.5 Million investment (Building + IT), for a total of $33.6M or a 50% tax rate. Also, the article does not specify what the total taxes were BEFORE the break. Usually such a corporate tax-break is a 'discount' not a 100% wavier of tax obligations. For sake of example lets say the original taxes added up to $30M over 10 years. $12.5M, New Building $10.0M, IT infrastructure $30.0M, Total Taxes (Example Number) == $52.5M ININ's Cost - $1.8M /10 years, Tax Break (Building) - $0.75M /10 years, Tax Break (IT Infrastructure) - $8.6M /2 years, Tax Breaks (against Hiring Commitment: 430 new jobs /2 years) == 11.5M Possible tax breaks. ININ TOTAL COST: $41M Even if you assume a 100% break, change the '30.0M' to '11.5M' and you can see the Company will be paying a minimum of $22.5, out-of-pocket for their capital-investment - NOT the tax-payers. Also note, much of this money is being spent locally in Indiana and it is creating 430 jobs in your city. I admit I'm a little unclear which tax-breaks are allocated to exactly which expenses. Clearly this is all oversimplified but I think we have both made our points! :) Sorry for the long post.

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