Tuesday, June 8, 2010

How to Fight Back Against State Tax Audit Assessments: Developing an Advantageous Relationship with Your Auditor

To many taxpayers, the average audit is a nuisance—and the temptation to simply settle and move on is very strong. In an earlier article, Geoffrey J. Christian, of Dow Lohnes Price Tax Consulting LLC, laid out a case for the long-term benefits that arise when a taxpayer pushes back against audit assessments. In this article, Marshal Kline of Dow Lohnes Price, discusses one of the most effective tools available to any tax professional—creating a good rapport with the auditor.

In our present environment, where state tax audits in all areas of taxation are on the rise, many tax professionals find themselves spending more and more time being reactive than proactive. Fewer are the days tax professionals go to work and actually find themselves devoting their time to the things they intended. Instead, they are being pulled in a variety of directions, scheduling field audits, responding to information document requests (IDRs), reviewing notices of deficiency along with the related workpapers and analyses, drafting protests in response to same, and, when there is time, preparing the tax returns that begin the whole process anew.

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Reprinted with permission from BNA Tax Management Weekly State Tax Report.  Authored by Marshal Kline, Dow Lohnes Price Tax Consulting Group, and published by BNA Tax Management Weekly State Tax Report on May 28, 2010.

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