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Taxation for Universities and Colleges: Six Steps to a Successful Tax Compliance Program by Steve Hoffman

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Chapter Seven

Your Audit Defense

Building an Audit Defense

The culmination of tax nirvana comes in the form of having a solid audit defense. See Exhibit 7.1.

Exhibit 7.1 Solid Audit Defense

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Audit defense is the continued state of readiness for an audit. It is the summation of the prior steps in our tax compliance program pyramid of Awareness, Identification, Compliance, Monitoring, and Reporting. The completion of the six steps results in the process of being ready for an audit at any time. And it is necessary to be prepared for an audit at any time. The arrival of the letter from the IRS announcing the audit is never expected. But with the completion of the five steps prior to the audit, you will be prepared.

Who at your university is accountable for you having a good audit? Is it just you in your role as primary finance officer for your university? Do you feel that way sometimes? It is true that if there is an audit of your university, you will be in the lead for the audit.

I discovered that I was the lead representative of the audit as tax manager at the universities I was employed at and, at the same time, also realized the reason executives sit in swivel chairs. They swivel around and point their fingers at certain personnel and say, “Steve, you're in charge of this audit.” At those moments, I felt the weight of the world on my shoulders, knowing that despite the fact that ...

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