Managed Audits

How would you like to automatically get penalties waived and one-half of the normal interest rate to apply to your potential audit assessment?

The CDTFA has a little known program called the Managed Audit Program (“MAP”). MAP allows a qualified taxpayer to perform a self-audit to determine any taxes due.   However, companies should carefully determine the benefits and exposure with performing a MAP, which include the following:

1. Benefits
   1. Automatic waiver of penalties
   2. One-half of the normal interest rate applied
2. Cons
   1. Additional time, effort, resources, etc. for the taxpayer to perform the audit
   2. Potential loss of flexibility in examining books and records (may require more detail)

To qualify, businesses are supposed to file fairly standardized returns with limited deductions and unusual items, although we have seen the CDTFA be flexible in this area. The MAP program could substantially benefit businesses that have material exposure. However, each company should carefully consider and understand the risks and rewards of performing a MAP prior to committing to this process.

Please contact DSF to review your Company’s audit risk and see if the MAP could benefit you.

For immediate assistance contact Jim Fier or call (562) 249-6004