Despite several efforts to develop both manual and automated systems in the interim, it wasn’t until early 2008 that Hudson was able to install a comprehensive software package designed to invoice the appropriate sales tax, report sales tax liabilities replica oakley sunglasses, and prepare state sales tax returns. As a result, the SEC concluded that Hudson’s inadequate internal controls constituted a violation of the Exchange Act.
Similar hierarchies inhabit the tax world. While the federal income tax is often treated as the aristocrat of the corporate tax universe, the more prosaic above-the-line taxes are left fighting for attention and scraps of resources from companies.
Hudson was spun off from Monster Worldwide Inc. in March 2003 to provide professional staffing and talent management services. Apparently, the new company lacked software that was capable of properly determining its sales tax liabilities, which, of course replica oakley sunglasses, vary among the thousands of taxing jurisdictions within the United States.
Sales and use taxes are not alone in requiring consistent attention and resources from corporate management. Property taxes (real and personal), state and local income and franchise taxes, foreign indirect taxes (such as value added tax), excise taxes, employment taxes, severance taxes, unclaimed property, and a host of other special taxes, fees, and levies that governments impose on businesses all create potential control risks.
Prudent management of tax risk requires teamwork among a company’s tax, treasury, accounting, control, IT, legal Cheap NFL jererseys, and audit functions as well as outside consultants and advisers. It also requires a commitment from the C-Suite and the Board that the necessary resources will be made available to the tax department.
In the NCAA basketball championships replica oakley sunglasses, 67 of the 68 teams will “fail.” In the case of tax compliance, however, failure is not an option for companies.
As March Madness sweeps the world of NCAA basketball, many bracketologists focus on the top seeded teams for their predictions. But from time to time Cheap NFL jererseys, a team from a smaller conference upsets their more glamorous competitors and advances to the Final Four.
The company’s systems failed to track the location of work performed. They failed to identify customers who had “direct pay” permits enabling them to pay sales tax directly to the taxing jurisdictions, as well as customers who were exempt from sales tax. The company couldn’t even identify the jurisdictions that impose sales tax on services. As a result, Hudson failed to consistently collect and remit the sales taxes due, resulting in the company itself having to pay the taxes.
The dangers of this attitude became painfully clear to Hudson Highland Group Inc. earlier this year, when the SEC issued a cease-and-desist order against the company and imposed a $200,000 fine for its failure to maintain appropriate internal controls and books and records relating to its sales and use tax liabilities.
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