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?
In a Managed Audit, the audit functions are performed primarily by the taxpayer with guidance and verification provided by a Department auditor. A written Agreement between the Department and the taxpayer formalizes this arrangement.
Payment of any tax due must be made at the conclusion of 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 will be less disruptive to your business operations since you will be able to manage your own resources.
- The Department will waive up to $5,000 of interest and the 5 percent assessment penalty on any tax due.
How does it work?
If you qualify to participate in the program, the auditor will
- Explain the procedures and timelines.
- Determine the audit functions you will perform.
- Give you specific written instructions.
- Provide guidance throughout the course of the audit.
Do I automatically qualify?
No. The decision to perform a Managed Audit is solely at the Department’s discretion. Careful consideration is given to the following factors:
- Complexity of the business
- Tax reporting and payment history
- Accounting system and internal controls
- Availability of electronic records
- Taxpayer's time and resources available to perform the audit
- Cost vs. benefit: Efficient use of state's resources
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.