How was ownership verified?
Enter how the ownership was verified. Business ownership may be verified by examining income tax returns, business licenses, professional license of a sole proprietor, partnership agreements, corporate charters, state sales tax permit, or Sec. of State information. The Auditor must be specific about which income tax return, or license was examined (1120 – corporation, 1120S – subchapter S corporation, 1040 – Sch.C – individual business expenses, 1065 – partnership, state sales tax license, comptroller franchise tax report, etc.). The year of the tax return must also be listed on #8 of the C-51 audit report form. Asking the employer who owns the business is not acceptable in verifying the ownership of a business. Verification of the ownership may not be accomplished by examining the employer’s copies of federal Forms 940, 941,and 943, state unemployment tax reports, W-2 or W-3 forms, or sales tax reports (although the sales tax license may be used). If a federal tax return is used to ve
