Hi Metchosin, Im a printer and in general I charge pst for design anyway, unless its going to another printer who is pst exempt. Ive been taking a closer look at the pst rules (although there are endless bulletins).

the graphic designer who went through the audit - was told that if a customer gets a tangible product (in this case film, or cd) then it is taxable. (and if he were to charge the film separately then he has to prove that its not for the same design- how you do that I dont know) They even tried to make him pay on the occasions that he sent
a digital inkjet proof on to the printer (since that was something tangible).
They looked at a random 3month period and averaged out how much he should have been collecting and pro-rated it for the past 6 years
(which is how far back they can go).

(although when we got audited we had to go back 20years in paperwork)

As far as a pst collection, there is a small commission that you deduct for collecting (3% or so) but since he wasnt doing it right, that was disallowed, Plus penalties and interest (back 6 years)

they seized the money from his account, no opportunity to question it and fight it. Although he probably can and should fight it/ it makes it tough to survive in an already difficult time.

essentially, they have hired a whole bunch of new people to collect pst and their plan is to audit everyone, (and go back 6 years)
from then on everyone will be audited every 6 years. So its a good idea to talk to the accountant.