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Colorado DOR's FYI Publications: Don't Rely on Them Alone

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Several months ago I attended a meeting where there was a presentation by John Vecherelli, the Senior Director of Taxation for the Colorado Department of Revenue and Phil Horowitz, the Director of Tax Policy for the Department, which was followed by a Q&A session.

For a period of time the Department of Revenue (the “DOR”) stopped providing its FYI Publications (that was their name) which interpreted Colorado tax statutes dealing with numerous income, sales and use, excise, payroll and other tax subjects. During the Q&A session the gentlemen were asked about some very significant changes that had been made to one FYI in particular, and the fact that the FYI’s were no longer available on the DOR website www.taxcolorado.com. They stated that the FYI’s simply asserted the DOR’s understanding of Colorado statutes at any given point in time, and that understanding may change over time. Therefore the FYI’s may often be incorrect. That is part of the reason they were no longer available.

A follow-up question was asked about whether the changes made to the one specific FYI reflected a change in DOR policy, and if so, what was the effective date of that change. The men did not want to say specifically whether or not it was a change in policy as of any particular date, because in their opinion the statute had never changed, only the DOR understanding of it had changed.

Someone asked a third question regarding whether auditors would be likely to apply the specific changes retroactively. The answer was yes, again because the statute had never changed.

This should be a reminder to be cautious of the sources from which one derives their research conclusions. At the bottom of the FYI’s there was a cautionary note which in part said “FYI’s provide general information concerning a variety of Colorado tax topics in simple and straightforward language. Although FYI’s represent a good faith effort to provide accurate and complete tax information, the information is not binding upon the Colorado Department of Revenue, nor does it replace, alter or supersede Colorado law and regulations.” In other words, be certain to check Colorado regulations, Revised Statutes and court cases, and don't rely solely on the FYI Publications.

At some point the DOR made the FYI's available again on the website at www.taxcolorado.com under the "Education and Legal Research" tab.

If you have any questions, comments or suggestions of topics for future entries in this Colorado Sales Tax column, I invite you to enter them in the box below.

Keith Crichton, CPA is President of Crichton Consulting Services, LLC a specialty CPA firm located in Centennial, Colorado, a suburb of Denver. For the last 30 years he has been responsible for the corporate income/franchise, sales and use, property and other tax filings for all 50 states. He has been the tax manager of several multistate companies, including several equipment leasing companies and an international accounting and tax consulting company.

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