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Introduction This guide was developed by members of the Market
Segment Speciality Program in Los Angeles to familiarize agents with some of
the practices prevalent within the auto body and repair industry and share
information on issues encountered during the study of this business segment. All of the examinations included in this study were
conducted in the Los Angeles basin and commentary reflects this location. State
laws and local ordinances in other areas will differ, particularly in the areas
of emissions and certification controls, sales tax applicability, and state tax
reporting. Bird dog fees, towing, and dealer incentive payments may also be
regulated. It is, therefore, important for the examiner to become familiar with
local restrictions and compare them to those in the Los
Angeles area when evaluating the material presented. Returns examined were selected based largely on
gross income, taxable income, and ZIP Code. Body shops were selected initially
and represent the bulk of the returns examined, though several general auto
repair shops were included later in the study. Although the study included mostly C-Corporations,
a few sole proprietorships were also examined, one of
which was a referral from a check casher project. No towing companies, chains,
franchises, or specialty services such as brake, muffler, or transmission
repair facilities were included in the study. The examinations undertaken spanned 20 months,
including an initial transition period with a few returns remaining in
inventory at this writing. This guide was written based on the knowledge of the
industry gained over that period and cannot be regarded as all inclusive. (More
information regarding other industry segments has continually surfaced and new
or anticipated legislation will undoubtedly influence some established
practices.) The information presented is designed to provide
the agent with a general familiarity with the auto body/repair industry before
beginning an examination, and to describe some of the issues encountered in
this study. The guide should only be used as a supplement to mandatory
procedures and other available resources as well as the agent's own expertise
in resolving cases involving the industry. Chapter 1 Chapter 2 Chapter 3 Chapter 4 Chapter 5 Chapter 6 Chapter 7 Chapter 8 Chapter 9 Chapter 10 Glossary ix |