Dan Martinez & Associates, L.L.C.

Managed Audit Program

What Is It?

The Managed Audit Program was enacted by the 76th Legislature, SB 1319 (effective October 1, 1999) as a means to allow qualifying taxpayers to work with Comptroller auditors to reduce the time it takes to complete an audit.

Who Qualifies?

Taxpayers that have been notified of an audit but in which audit fieldwork has not yet begun can be considered for participation in the Program. Managed audits will not be approved if the taxpayer was previously audited and the prior audit took 80 hours or fewer. Other factors to be considered in determining if a managed audit will be allowed include:

  • The taxpayer’s qualifications to perform a managed audit – sole proprietor auditing him/herself, taxability knowledge.
  • The taxpayer’s history of compliance.
  • Amount of time and resources available to the taxpayer for dedication to the audit.
  • Availability of the taxpayer’s records.
  • Ability of the taxpayer to pay an assessment.

Benefits?

The goal of the Managed Audit is to speed up the completion of audits. Additionally, taxpayers participating in the Managed Audit Program will not be assessed a penalty on any tax liability and may be entitled to the waiver of all or a part of any interest that may be due. The waiver of penalty and interest can amount to a significant savings for participating taxpayers.

Process Overview

Interested taxpayers should request a Managed Audit within 30 days of the date that the Audit Notification Letter was sent. The Audit Division will approve or deny the managed audit request within thirty (30) days of the request. Upon approval, the parties will enter into a managed audit contract that provides that the taxpayer will set a timeline to be approved by the auditor, a sample to be selected by the auditor with analysis of the sample to be made jointly by the taxpayer and the auditor.

Why Dan Martinez & Associates?

As former tax auditors for the State, we have a firsthand understanding of the audit process and have assisted both large and small companies in meeting the compliance requirements of the Managed Audit Program. Our clients that have participated in the Managed Audit Program have benefited from the completion of audits in a reduced timeframe as well as the waiver of penalty and interest, which have amounted to significant savings for certain taxpayers.

Contact us to see if you qualify for the Managed Audit Program.