Audit Assessments

When the audit identifies necessary changes to the information that the taxpayer originally reported, it usually results in the calculation of a new assessment.

The most common way of determining this new assessment is through an audit form. The form could be the same form type as the one that the taxpayer filed (except that the form is marked as an 'audit' form) or it could be a special audit form type. In either case, the form is brought to a state where the user can review the details of the proposed assessment, see the potential impact to the obligation's balance and make additional changes, as needed.

In some exceptional cases, the adjustment may be created manually (i.e. not via tax form) or certain changes to the taxpayer information are made to trigger a change in the assessed tax (e.g. removing an exemption).

There are two common scenarios:

• The taxpayer being audited did not file a tax return. In this case, the auditor creates the tax form.

• An existing tax return is audited. The auditor creates the audit form by copying the details from the existing form and making the necessary changes. When the audit form posts, the assessment adjustment is created for the difference between the prior assessment and the new assessment.

The C1-ParentTaxForm business object provides an Audit action that allows a user to create an audit form from an existing posted form. Any tax forms that inherit from this business object will have the Audit action available. Refer to Auditing Tax Forms for more information on auditing existing tax forms.

The audit form is usually not posted until it has gone through proper approval / review and until the taxpayer has accepted the new assessment.

Should the taxpayer disagree with the changed assessment, he/she can file for an appeal. The tax authority may or may not choose to keep the audit open while the appeal is in progress. The audit assessment is not applied to the obligation's balance until a decision is made on the appeal. If the appeal is upheld, the new assessment is not created. On the other hand, if the appeal is denied, the new assessment is posted. Refer to The Big Picture of Appeals for more information on appeals.