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What Occurs During an Examination

During the first meeting of an examination, the examination team will present and discuss the publication, “Achieving Quality Tax Examinations through Effective Planning, Execution and Resolution”.  The examination team will conduct an initial interview followed by a tour of the business.  At a subsequent meeting, the examination team and taxpayer will discuss and agree on an audit plan establishing respective commitments such as audit timeframes; materiality thresholds; Information Document Requests (IDRs); Notice of Proposed Adjustment; affirmative issues (Forms 5701); etc.  The examination team will then examine the issues selected.  All proposed adjustments will be discussed prior to the issuance of Form 5701.  Within agreed upon timeframes, it is best practice for the examination team to advise the taxpayer when an issue has been closed.  Finally, the examination team will inform the taxpayer as early as possible when and why penalties are being considered.


Page Last Reviewed or Updated: 24-Nov-2014