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I’m being audited by the city of Palm Springs


Hi folks,
I just received a letter of intent to audit. They want all my paperwork including tax returns and bank statements. Has anyone else been through this? Any and all advice will be appreciated.


Talk to a CPA ASAP. Or an attorney. What is the reason they give for the request to audit?
Did you see this?


No! That’s terrible. I’m not too worried as I’m small potatoes and I’ve been jumping through all their hoops. Just hoping there’s someone else out there that’s been through it.



I would recommend filing the extension and wait to see how the Measure C vote on June 5 lands. I wouldn’t agree to this audit on my business if they are just going to eliminate my business a week later.


That sounds odd, I didn’t know a city could audit you. Are they interested in your Air income?


I presume they’re auditing to verify of the property is a short term rental or not and to see if any relevant city tourist taxes are due? The income might verify this.


In Palm Springs, we pay a Transit Occupancy Tax which is 11.5%. I was not part of the audit, but from what I know, the city originally requested information such as a copy of your federal tax return, as well as bank statements from over 200 randomly selected permit holders. Since the original audit request, it has been amended for, what I believe to be, overreach. The city has become a draconian nightmare of regulations. About every 2 months, you see a drop of about 300+ vacation rentals (including us shortly) who have just about had it with this experience and are voluntarily giving up on this city.

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