Taxation officials criticized for inconsistent handling of estate and fuel taxes
Legislative auditors levied sharp criticism Thursday about how the state collects estate taxes.
“Some estates have been due refunds for years and have not received payment,” said the report. “Similarly, estates owing thousands of dollars in tax are sometimes never billed or billed only once.”
The report presented by Deputy Auditor Jane Bailey said there are similar problems in how fuel tax collections are handled and that the combination is costing the state large amounts of revenue.
The report says that while some estates were dunned for small amounts of money, others were ignored for more than a year. It said the Taxation Department took an average five months to process refunds owed 34 of the 88 estate cases reviewed and that there were errors in both the amounts billed and refunds made. One estate was wrongly billed for $5.6 million that had already been paid.
In handling fuel taxes, the auditors said the department was very slow in responding to taxpayer requests for waivers of penalties and interest – taking up to 11 months to respond. The department was also months late in completing reviews of reports filed by the nearly 200 licensed fuel dealers in Nevada.
The audit called for better monitoring of estate tax activity and tighter accounting procedures for accounting for refunds and receivables as well as regulations to provide documentation of estate taxes due.
It also urged the state to tighten computer system controls over the collection and processing of those tax revenues.
Estate tax revenues are dedicated to public education, split evenly between K-12 and the university system. For the past two years, collections have been more than $25 million a year.
Fuel taxes, on the other hand, bring in more than $300 million a year to the state from a levy of 23 cents a gallon on all fuel imported into the state.