TEI-LMSB announce joint audit planning process.

Tax Executives Institute and the IRS's Large and Mid-Size Business Division have announced completion of a project to develop a joint audit planning process for taxpayers and the IRS. The goal of the effort is to establish accountability in jointly developing an issued-focused audit plan that will increase audit efficiency.

"The joint report emphasizes that the keys to a successful audit are communication, trust, and openness," according to TEI President Ray Rossi. The report is the subject of a video presented by TEI and LMSB representatives and recently distributed to TEI's U.S. chapters. The chapters have been encouraged to show the tape at an upcoming chapter meeting, perhaps engaging chapter members and LMSB representatives in a discussion of the mutual obligations of taxpayers and IRS representatives.

"Improving the examination process involves a commitment by both the taxpayer and LMSB to the same goals, even though there may be--and often are--disagreements on specific audit issues," Mr. Rossi stated. "For the past year, TEI members and LMSB representatives have worked together to provide a consistent approach to the audit process that includes all audit team members working in conjunction with the taxpayer."

TEI's president explained that the results of this collaboration is a planning and monitoring tool that lists the steps a taxpayer and audit team can take to enhance the quality and timeliness of their examinations. The tool also outlines the specific joint and individual responsibilities of all participants--the taxpayer, team manager, audit team, specialists, Counsel personnel - thereby focusing time and resources on the most important areas. More than a checklist, the tool focuses on six areas:

* Preliminary meetings and discussions

* Involvement of IRS Counsel, specialists and technical advisors * The scope of the audit

* The audit timeline/monitoring process

* Information document requests

* Issue resolution and notices of proposed adjustments

"The Joint Audit Planning Process brings home the message that, though taxpayers and the IRS may sit on opposite sides of the table, both have an interest in ensuring that the resources expended in examining corporate tax returns are used efficiently, wisely, and minimally," Mr. Rossi concluded.

The TEI members participating in the joint TEI-LMSB task force were Denise Lukowitz of Schneider National, Inc.; Victoria McInnes of General Motors Ciorp.; Christopher Riley of Archer-Daniels-Midland Co.; Mark Silbiger of The Lubrizol Corporation; and Bob Zysk of Northwestern Mutual Insurance Co. TEI Tax Counsel Mary Lou Fahey also participated in the project. Mr. Riley, TEI Communications Committee chair Robert McDonough, and TEI Executive Director Timothy McCormally participated in the production of the video with LMSB representatives.

Portions of the task force report will be published in the November-December 2003 issue of The Tax Executive; the full text is available on TEI's website (www.tei.org).