(a) General. Every
timber owner, timberland owner, timber operator, and person harvesting timber
for forest products purposes, shall keep adequate and complete records showing:
(1) Contractual or financial agreements
relative to the ownership and harvest of timber for forest products.
(2) Harvest locations for logged
timber.
(3) The basis for
adjustments to harvest values.
These records shall include the books of account ordinarily
maintained by the average prudent businessman engaged in the activity, together
with all bills, receipts, invoices, scaling records, tapes, or other documents
of original entry supporting the entries in the books of account as well as all
schedules or working papers used in connection with the preparation of tax
returns.
(b)
Microfilm Records. Microfilm reproductions of general books of account, such as
cash books, journals, voucher registers, ledgers, etc., are acceptable in lieu
of original records, and microfilm reproductions of supporting data such as
sales invoices, purchase invoices, credit memoranda, scale tickets, trip
tickets, etc., are acceptable providing the following conditions are met:
(1) Appropriate facilities are provided for
the preservation of the films for periods required under subparagraph
(d).
(2) Microfilm rolls are
indexed, cross-referenced, labeled to show beginning and ending numbers or
beginning and ending alphabetical listing of documents included, and are
systematically filed.
(3) The
taxpayer agrees to provide transcriptions of any information contained on
microfilm which may be required for purposes of verification of tax
liability.
(4) Proper facilities
are provided for the ready inspection and location of the particular records,
including modern projectors for viewing and copying the records.
A posting reference must be on each invoice. Credit
memoranda must carry a reference to the document evidencing the original
transaction. Documents necessary to support a claimed adjustment for immediate
harvest value, such as scaling tickets and trip records, must be maintained in
an order by which they can be readily related to the harvesting for which the
value adjustment is sought.
(c) Records Prepared by Automated Data
Processing Systems. An ADP tax accounting system shall include a method of
producing visible and legible records that will provide the necessary
information for verification of the taxpayer's tax liability.
(1) Recorded or Reconstructible Data. ADP
shall make possible the tracing of any transaction back to the original source
or forward to a final total. If detail printouts are not made of transactions
at the time they are processed, then the system must have the ability to
reconstruct these transactions.
(2)
General and Subsidiary Books of Account. A general ledger, with source
references, shall be maintained to coincide with financial reports for tax
reporting periods. Subsidiary ledgers used to support the general ledger
accounts shall also be in printout form, or the system be capable of producing
a printout for any appropriate calendar or fiscal period.
(3) Supporting Documents and Audit Trail.
Records shall be kept in such a manner as to provide an audit trail that allows
for ready identification of details underlying the summary accounting data. The
system should be so designed that supporting documents, such as sales invoices,
purchase invoices, scaling tickets, credit memoranda, etc., are readily
available.
(4) Program
Documentation. A description of the ADP portion of the accounting system shall
be available. The statements and illustrations of the scope of operations
should be sufficiently detailed to indicate, (a) the application being
performed, (b) the procedures employed in each application (supported by flow
charts, block diagrams or other satisfactory description of the input or output
procedures), and (c) the controls used to insure accurate and reliable
processing. Important changes, together with their effective dates, should be
noted in order to preserve an accurate chronological
record.
(d) Records
Retention. All records pertaining to transactions subject to the timber yield
tax must be preserved for a period of not less than four years unless the State
Board of Equalization authorizes in writing their destruction within a lesser
period.
(e) Examination of Records.
All of the above-described records shall be made available for examination on
request by the Board or its authorized representatives.
(f) Failure to Maintain Records. Failure to
maintain and keep complete accurate records shall be considered evidence of
negligence or intent to evade the tax and may result in penalties or other
appropriate administrative action.
