Home Inspection audit

Well it looks like we are all into phase II. I just received notification from the State of New York that I provide ALL documentation relating to the list of home inspections I have submitted. ( I submitted a total of 265 ) and from this list they are asking for 25.

a. Complete copy of the home inspection report;

b Copies of the home inspection request and/or invoice: and

c. Copies of W-2 or 1099 evidence of compensation earned for the inspection performed.

Just another note:

Please be advised that during the audit we may question you regarding your business practices and methods: and we may request and select additional items for review. Further be advised that your failure to cooperate and provide the requested items, within the mandated time period, may result in your Home Inspection application being suspended, revoked and/or denied.
( Provide before February 2, 2006 )

Just thought I would let any person interested know and have a good day.

                                                      Tom Fisher
                                               Allpro Home Inspection

They did not waste any time to do audits, did they? I’m planning on it at some point and am ready if and when it happens!

They must be spending a boat load of money tracking all this. I bet your taxes went up ?

We all knew the audit was coming. Just surprising (but not really) how fast they got this segment together, compared to the licensing procedure. Does anyone know who is on the counsel yet? Who is doing the auditing?

Rick

Copies of W2 or 1099??? What client supplies those?? What inspector has gotten a 1099 or W2 from a client for a specific inspection. I doubt anyone has collected 1099s or W2 from their clients. Is that going to result in loss of license?? Its bad enough we have to photocopy the full report plus the Request for Inspection. Thats a major expense of time, material and shipping or postage, especially for the one man operation that doesnt employ a secretary. Either it is going to be passing on doing several inspections or a bunch of late nights providing everything. The state is getting carried away with their wants.

I did all of my inspections, but I did it for a $1.00 each. Now they didn’t say what had to be charged or anything about money. Just that the inspections had to be done for compensation.

Hey and I wasn’t a big outfit, just a guy with a class and business card. I didn’t want anything other than the license. I want to see how many I can collect in a lifetime.

Oh darn, now where did I put all of those quarters and pennies…:roll:

Tom when did you receive your NY lic, they are giving you 2 weeks to provide all this info. is this a ramdom audit or for everyone that got a NY lic.

Everyone that sent in an application will be asked to supply a random 10% of their reports. 25 for the 250 applications, and 10 for the 100 applications.

The invoice that the state is asking for should be your inspection aggreement, and you will probably have to send last years tax return to prove you were paid. I will try to get clarification on that tomorrow.

Dan

Interesting. Who is requesting this info; the DOS or Dept of Taxation?

I can understand the Inspection Agreement, though using one is not a requirement. As there is no requirement for anyone to have been officially registered as a business entity, I’m not sure what a tax return will show. As “fee paid” can be $1, I’m really not sure what any tax return may show.

Like I said, I can provide any report they ask for. No problem. The other stuff? It depends on what they need. What they ask for may not provide the information they seek. They are pretty honest in their dealings with everyone. They may be trying to establish proof that the inspection records provided are real. Its a fair request, and a fair challenge for them, I’m sure.

Dennis,

I received my lic. the early part of Dec. 2005. I’m going to give them a call tomorrow. I have a guestion on the W-2 and 1099 because my business is a S- Corp which is a little different.
Tom

Dan - Who poicks the randon 10 percent? NYS or do we?..Would an affadavit from NACHI for those of us whop sent in Inspections for verification and review be sufficient ( Sure would be a cost savings vs printing up hard copies for NYS)?

Tom

Sorry about the sticky keys

They sent me my audit form and they selected 25 of my reports from the list I sent them. Have about 2 weeks to submit the package back to them with appropriate financial paperwork also.

Dan

Dan - Do the reports have to be printed hard copies or is a CD adequate?

Tom

I can not imagine they would accept CD… they will want everyone’s reports in the same format, for archiving purposes… Since they would not allow any other format than their form for submitting the list, I can’t imagine they would change now… I will put that on my list to talk to them… I spent 2 hours on hold today and did not get through to talk to them about the 1099 and W2 question… I have a direct number in to the department but hesitate to use it for this general a question… If I use that number all the time, they will quit answering it…

Dan

It appears that New York has misconceptions and has made invalid assumptions as to how a Home Inspection Business is operated.

Inspectors do not have access to financial records of the Corporation.

Inspectors may be paid a Salary where the W-2 income is not directly identifiable to the Inspection performed.

What is the Mailing Address where this information is being forwarded to?

Who is reviewing this information?

Is the 1099 and W-2 the only forms they are excepting for this auditing? Has anyone been through the complete audit yet? I understand the state wants to make sure the reports are paid reports.
What else can we provide. Dan, I really don’t think this is a general question. It is a very important question. If you have the inside track for all of us, please use it to get an answer.

Rick

Thanks Dan - Tom

I agree. The report copies are not difficult to provide, though that sure is alot of paper, ink, postage, and time. I do wonder if they have a clue the amount of paper they should expect to receive from all of those reports.

The 1099 and W-2? How the heck does that work?

I spoke with an Inspector that has completed 2 audits already for employees.

W-2 and/or financial records need to reflect earnings during the period of time that the Inspection was performed.

Copies of reports need to be paper hard copies and not on disc or CD.

His opinion:

  • The audit is triggered if you note you have performed 250 or more inspections to meet the grandfathering provisions. I do not know if there is anything to substantiate the validity of that opinion.