Tag Archives: audit

IRS Issues New Transfer Pricing Audit Roadmap

The IRS released a Transfer Pricing Audit Roadmap on February 18, 2014.  The Roadmap, which was issued through the IRS Transfer Pricing Operations of the Large Business and International (LB&I) division, was developed to provide audit techniques and tools for transfer pricing examinations.  The Roadmap is designed as a comprehensive toolkit based on an audit […]

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PCAOB No Longer Pushing Auditor Rotation

After encountering heavy resistance from the public and action from the House of Representatives, the PCAOB has finally dropped its project pushing auditor rotation. On February 5, James Doty, PCAOB Chairman, informed members of the SEC that the board no longer has an active project regarding a term limit for auditors. Research by the PCAOB showed that for […]

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Tax Tip: Proof of Gross Income

During the course of a tax audit, the agent will add up all bank deposits, back out identifiable non-tax items (such as account transfers) and compare that total to the gross income reported on the tax return. The excess of deposits over reported income is deemed to be unreported taxable income unless proven otherwise. Frequently, […]

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Transfer Pricing – General Principles, Penalties and Contemporaneous Documentation

General Principles – Transfer pricing is relevant for U.S. companies with foreign subsidiaries or foreign parent companies that engage in certain intercompany transactions.  U.S. transfer pricing rules require that intercompany pricing between a U.S. company and a foreign affiliate must be based on an ‘arm’s length’ price that would be charged in a similar transaction […]

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What are your chances of being selected for an IRS tax audit?

The 2011 IRS Data Book, a compilation of statistical data and IRS activities, is out.  You can read the whole book here: http://www.irs.gov/pub/irs-soi/11databk.pdf or just skip to page 22 of the publication for the important stuff. In summary, the average audit rate for individual tax returns is 1.1%.  But what’s in your return can push […]

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