The Department of Revenue’s Managed Audit Program allows you to have an active role in the audit of your business. This information explains how this program can benefit you and your business.
What is a managed audit?
A managed audit allows you to perform some, or all, of the audit functions. It is a contract between you and the Department.
Our auditor will:
- Explain the procedures
- Give you specific written instructions
- Work with you to determine the audit functions you can perform
- Provide assistance throughout the audit
What are the benefits?
- You will gain a better understanding of how Washington State tax laws apply to your business activity.
- The audit process is less disruptive to your regular business operations since you will be able to manage your own resources.
- If the audit results disclose additional tax due, we will:
- Waive up to $5,000 in audit interest
- Not add assessment penalties, including the 5 percent assessment issuance penalty
Note: To receive these benefits, the managed audit must be completed according to the terms of the agreement and full payment must be received at the time the resolution agreement is signed.
Qualifying for a managed audit
Our auditor will assess your business' resources and ability to perform some, or all, of the audit function. The complexity of your business operations and applicable tax laws will be taken into consideration. Once this review is completed, our auditor may propose a "managed" audit rather than a "traditional" audit.
If you qualify for a managed audit
You and the Department's auditor sign a contract that obligates you to perform specific audit functions in an agreed period of time, usually 60 days. The contract provides:
- Work performed by the business is subject to verification by our auditor.
- We will waive the first $5,000 of interest on a tax assessment, net of credits.
- We will not add assessment penalties, including the 5 percent assessment issuance penalty.
Note: The audit results are subject to an internal review process.
If you owe tax:
The payment of the tax must be made at the time a resolution agreement is signed. This agreement achnowledges the procedures have been performed as agreed between the business owner and the auditor.
Note: In the case of a tax overpayment, interest will be calculated and refunded at the statutory rate.
If you don't owe tax:
The Department will send you a confirmation letter.
How do I apply for the program?
Submit a completed Managed Audit Application, following the instructions on the form, and you will be contacted by the Department.