by Brian Mahany
Several prominent accountants recently compared notes regarding the Wisconsin Department of Revenue audit process. The consensus was not very flattering to the agency.
Unlike many states and the IRS, Wisconsin DOR auditors frequently give no reasoning or explanation for their audit findings. In many cases, it is pretty much “Pay up and don’t ask any questions.”
One accountant said, “I am working through a thorny issue in WI. They have issued notices of adjustment to a client’s WI tax returns, but offer no reasoning or legal authority for the adjustment.” An accountant from Milwaukee said, “ I have found WI to be more aggressive in setting up unagreed issues, and very slow on resolving them @ appeals in the past few years. The appeals process is a bit tedious.”
What does this mean for businesses and individuals confronted with an adverse audit ruling? It means you need help.
Ideally, taxpayers should engage a tax attorney or CPA well versed in audit defense at the first notice of an audit. Many people, however, do not engage counsel until the audit is complete and they are facing a large tax bill.
It’s still not too late to prevail, however. Even if the audit is complete. Sometimes its possible to engage the auditor before the assessment is finalized. Time periods are short, however.
If the auditor will not budge, it may still be possible to engage the audit group manager. During my term as Maine’s state revenue commissioner it was not uncommon for auditors to be overruled by their group manager. What was less common was for taxpayers to ask for a conference with the manager. Many taxpayers simply do not know they can ask to speak with the auditor’s boss.
If all else fails, one can always appeal the assessment. In our experience, the professionals in the Resolution Unit (where appeals are sent) will answer questions and can sometimes adjust the audit finding short of a full hearing.
The best advice is to always engage a professional early in the process. There are many ways to avert a negative audit assessment. The longer one waits, however, the fewer the options.
Do you have an assessment in Michigan, Wisconsin or Maine? Let the audit defense lawyers of Mahany & Ertl help you. Our tax lawyers can assist with a wide range of tax problems including audit resolution, tax appeals, tax court litigation, collection representation, criminal tax and unwinding phony welfare benefit plans. We also help taxpayers with amnesty applications and offshore tax difficulties.