Corporate Income Tax: Compiling and Maintaining Audit Files

Strategies for Preparing an Effective Record for Federal and State Exams

Recording of a 110-minute CPE webinar with Q&A


Conducted on Tuesday, August 17, 2010

Recorded event now available

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Program Materials

This webinar will prepare your company tax department to develop a refined, well-planned approach to strategizing and executing an audit file for both state and federal income tax audits.

Description

Under Sarbanes-Oxley and FIN 48, companies must maintain highly detailed documentation to support federal and state income tax positions. However, recent case law raises the prospect that many documents must be turned over to auditors, so a well thought out audit file strategy is paramount.

Is your tax staff taking a fundamentally sound approach with audit files? Are tasks and access to information clearly defined for employees, consultants and external auditors? Are you maintaining separate files for potentially unprotected information and on state-by-state and issue-by-issue bases?

Strategic planning of federal or state audit file processes anticipates loss of protection on certain documentation, controls access to the file, and balances the external auditor's needs against the company's, without sacrificing the clarity and organization required for a government audit.

Listen as our panel of experienced tax advisors offers you insights that will help sharpen your company's processes for planning, creating, maintaining and evaluating effective income tax audit files.

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Outline

  1. Issues related to attorney-client privilege and tax workpapers
    1. U.S. Supreme Court’s decision not to hear Textron appeal
      1. Workpapers discoverable unless directly associated with litigation
    2. U.S. Court of Appeals for D.C. ruling in Deloitte case
      1. Partial victory for government in trying to see accountant’s audit records
  2. Fundamentals for creating and maintaining federal and state income tax audit files
    1. Defining internal roles and responsibilities
    2. Categorizing documents in the file on issue-by-issue or state-by-state basis
    3. Setting an audit file access policy
    4. Maintaining a log for the file
    5. Setting consultants’ roles and access
    6. Preparing work product protection plan for external auditors
    7. Controlling details put into documents, with lack of protection in mind
    8. Limiting information in the external auditor’s workpapers
  3. Reviewing and refining the audit file
    1. On a defined schedule
    2. Potential red flags
    3. What to look for in the way of improvements

Benefits

The panel will address these and other relevant aspects:

  • Establishing roles and responsibilities: Assigning the correct staff to tasks that affect file documents and clearly defining the relevant activities of outside consultants and external auditors.
  • Organizing principles: Effectively using state-by-state and issue-by-issue sub-files and keeping separate compliance and controversy files for potentially unprotected material. Maintaining a rigorous log-out process for information given to third parties.
  • Working with the external auditor: Developing separate plans for work product protection and for access to sensitive information.
  • Anticipating the government audit: Setting up the audit file for an expeditious and favorable audit.

Faculty

Pilar Mata
Pilar Mata

Sutherland Asbill & Brennan

She specializes in state and local tax and works on tax controversies at the audit, administrative, trial and appellate...  |  Read More

Robert Willmore
Robert Willmore

Partner, Tax and Litigation Group
Crowell & Moring

He has spoken and presented several times on best practices for corporate tax departments to protect privileged...  |  Read More

George Hani
George Hani

Member
Miller & Chevalier

He is Vice Chairman of the firm's Tax Department and specializes in administrative appeals of federal tax disputes. He...  |  Read More

Aaron Young
Aaron Young

State and Local Tax Partner
Reed Smith

He has extensive experience in state tax controversy matters involving corporate income, franchise and other taxes and...  |  Read More

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