LMSB Joint Audit Planning Process |
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Key features of the Joint Audit Planning Process include:
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Preliminary Meetings and Discussions
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Advise each other of scheduling conflicts that may results in delays or
increase burden
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A meaningful orie ntation is needed
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Taxpayer should disclose significant transactions impacting the cycle
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Taxpayer should provide routine start-of-audit information
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Financial information should be provided in electronic format to reduce the number of Information Document Requests (IDRs)
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Taxpayer should deliver a list of claims and requested audit adjustments for inclusion in the audit plan
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Specialists and their managers should be involved in preliminary meetings
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Involvement of IRS Counsel, Specialists, Technical Advisors
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Specialists should meet with taxpayer personnel prior to issuing IDRs
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Coordination with Office of Associate Chief Counsel should be made as early as possible
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Specialists and Counsel will be invited to attend key issue meetings
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Facts should be agreed prior to the involvement of a Technical Advisor
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Computer Audit Specialist should have advance access to the taxpayer’s
electronic data
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Scope of Audit
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LIFE (Limited Issue Focused Examination) should be considered
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A copy of the draft audit plan will be shared
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Support audits and third party contacts need to be considered early in the examination
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Audit team will share subsequent risk analysis results with the taxpayer
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After preliminary information is received the scope should be narrowed to focus on the most significant issues
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If issues are dropped or narrowed, additional issues should not be routinely substituted
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A plan to attain and maintain currency should be jointly developed
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Audit Timeline/Monitoring Progress
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An audit timeline should be jointly prepared
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Impasses and significant concerns that cannot be resolved will be immediately elevated
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The Team Manager and Tax Manager will attend regular audit progress
meetings and hold each other accountable
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Information Document Requests (IDRs)
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Joint discussions should be held prior to drafting IDRs
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Prior to issuance, all IDRs should be reviewed with the taxpayer for
completeness
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Standard response times for IDRs should be agreed upon
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Issue Resolution/Notices of Proposed Adjustments – Form 5701
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Issues should be discussed before Forms 5701 are issued
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Form 5701 timeframes should be jointly established
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Forms 5701 will be issued throughout the examination to facilitate early issue resolution
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Abbreviated proposed adjustment write-ups (5701s) will be used for agreed issues
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Both the taxpayer and the Service will make an earnest effort to resolve all issues at the lowest level, taking advantage of the issue management
initiatives when appropriate
To improve the audit planning process, the Large and Mid-SizeBusiness Division of the Internal Revenue Service and the Tax Executive Institute formed a team to develop a joint, issue driven, audit planning process that engages all members of the audit team, including specialists, in conjunction with the taxpayer. The report jointly prepared by the Team is found at Information for Large to Mid-Size Businesses on the IRS.gov website.
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Page Last Reviewed or Updated: October 10, 2008