IARP Tax Audit Risk

Small business owners lose sleep over it. CFO’s, controllers and tax manager’s get gray hair during it. Shareholders can lose significant capital because of it. Bankers, suppliers and customers sometimes walk away from long term business relationships as a result of it. Individuals and families unfortunately sometimes suffer as a consequence of it.

CPA’s and attorneys advise clients they must assume that every return, deduction and accounting practice will be questioned. Though that is not the case, when an audit does occur there is a 50/50 chance that a tax deduction will be disallowed.

The 2010 IRS Data Book reports that over 100,000 Additional Tax recommendations were sent to corporations after return and field audit examinations. Audit tax risk is a significant challenge for all sized businesses.

IARP: (IRS Audit Risk Program)

IARP is an audit risk management road map targeting IRS Industry Focus Issues (IFI). Industry Focus Issues are guidelines IRS examiners use to enforce oversight of tax laws. IFI outlines a statute specific risk based approach to examination oversight and audit engagement rules. IFI outlines focus areas of heightened agency scrutiny targeting specific issues that are reported on tax filings.

IARP assists small and mid-size businesses (SME) to determine tax audit exposures to Tier I, II and III risk factors.

The IARP is a threat management and scoring tool that uncovers, ascertains, manages and mitigates tax audit risk for each IFI risk factor.

The IARP ranks, aggregates and groups all tax risk exposures. Managers and tax advisers can then take considered action to mitigate exposure, prepare for tax audits and organize defensive responses for potential mediation, arbitration or litigation of tax audit disputes.

The IARP is a necessity for SME’s, private equity firms, financial services firms, companies conducting business in foreign countries, corporations utilizing offshore structures, companies engaged in innovative transactions, R&D programs, carry trade, recognize and book revenue from diverse sources or employ sophisticated tax strategies.

The IARP is a resource for CFOs, compliance officers, risk officers and corporate counsel. CPA’s, attorneys with a focus on corporate tax, compliance and risk consultants and other industry service providers will find the IARP an indispensable client engagement tool.

The IARP scoring methodology is designed to determine audit risk exposure and level of preparedness to meet audit risk factors as it guides users through a thorough risk assessment. The IARP helps managers formulate and initiate actions required to mitigate the threat of audit risk exposures.

IARP identifies and calculates expenses associated with mitigation initiatives while assisting managers to track the progress of mitigation responsibilities assigned to staff members and outside service providers.

IARP links to issue specific IRS resources and documentation that explains tax issues, documentation requirements and agency engagement guidance pertaining to the specific IFI risk factor. These critical tax compliance resources helps to quickly determine the severity of risk factors and aligns corporate resources needed to address aggregated corporate exposures.

Product features:
Audit Risk Scoring Methodology
Identify Audit Risk Exposures
Identify Mitigation Initiatives
Manage Mitigation Initiatives
Prioritize Aggregated Risk
Assign Tasks and Track Open Issues
Calculate Mitigation Expenses
Align Staff and Service Providers
Links to Issue Specific IRS Guidance
IRS Form Library and Search Engine
FASB and AICPA Guidance

The IARP is an Mobile Office MS Excel© App. IARP Mobile Office App requires a Mobile Office App a PDF reader and a Zip file manager for Android users. All available for no charge on Google Play. The app directs users to a Drop Box to pick up zip file.