Streamline can assist with the evaluation, production, negotiation, and implementation of alternative compliance procedures, including managed audits and compliance, contract auditors, alternative reporting procedures, and more. These procedures came to forefront almost two decades ago as both jurisdictions and taxpayers began looking to increase efficiency and reduce compliance costs. Today, many jurisdictions have formalized these procedures by adopting legislation, regulations, and programs.
“Alternative reporting procedure” is an umbrella term covering many techniques to remit taxes based on estimations. Included here are calculating tax using managed compliance to a jurisdiction without a written agreement, estimating post-audit period liabilities with prior audit results, and other methods.
Contract auditors now perform audits on behalf of many corporations. More common with property tax and unclaimed property, they are now gradually expanding into sales and use tax, as well. Due to decreasing budgets and resources, contract auditors are now a popular vehicle for taxing jurisdictions to increase audit-related tax revenues without raising headcount. Of course, special caution must be exercised to enact a confidentiality agreement with auditor. Likewise, taxpayers should be skeptical of contingency fee-based auditors, or “bounty hunters.”
Managed audits permit taxpayers to perform most typical auditor functions (creation of scope and work plan; data reconciliation; creation of audit assessment/credit schedules) in exchange for the waiver of penalty or interest.
Managed compliance allows taxpayers to enter into a written agreement with a jurisdiction to report sales and use tax of purchase transactions according to a predetermined percentage. Usually involving a specific account or group of accounts, for a given period of time, these help reduce the administrative burden of reviewing every transaction in detail. Managed compliance agreements typically are available only for direct payment permit holders, and are limited to expense purchases.
Our professionals help clients determine which, if any, methods can help. However, these methods are not for every situation; we are pros at exploring all options, and determining their potential value. We evaluate all options, refining the required techniques, negotiations, and procedures implementations.
For more information regarding our alternative compliance procedures services, please contact us at (972) 838-1900.