Managed audit program

# (a)

The tax administrator may, in a written agreement with a taxpayer, authorize a taxpayer to conduct a managed audit pursuant to this section. The agreement shall specify the period to be audited and the procedure to be followed, and shall be signed by an authorized representative of the tax administrator and the taxpayer.

# (b)

For purposes of this section, the term “managed audit” means a review and analysis of invoices, checks, accounting records, or other documents or information to determine the correct amount of tax. A managed audit may include, but is not required to include, the following categories of liability under this Chapter, including tax on:

(i) Sales of one or more types of taxable items.

(ii) Purchases of assets.

(iii) Purchases of expense items.

(iv) Purchases under a direct payment permit.

(v) Any other category specified in an agreement authorized by this section. It shall be in the tax administrator’s sole discretion as to which categories of liability shall be included in any managed audit.

# (c)

The decision to authorize a managed audit rests solely with the tax administrator.
In determining whether to authorize a managed audit, the tax administrator may consider, in addition to other facts the tax administrator may consider relevant, any of the following:

(i) The taxpayer’s history of tax compliance.

(ii) The amount of time and resources the taxpayer has available to dedicate to the managed audit.

(iii) The extent and availability of the taxpayer’s records.

(iv) The taxpayer’s ability to pay any expected liability.

# (d)

The tax administrator may examine records and perform reviews that (s)he determines are necessary before the managed audit is finalized to verify the results of the managed audit. Unless the managed audit or information reviewed by the tax administrator discloses fraud or willful evasion of the tax, the tax administrator may not assess a penalty and may waive all or a part of the interest that would otherwise accrue on any amount identified as due in a managed audit. This subsection (d) does not apply to any amount collected by the taxpayer that was a tax or represented to be a tax that was not remitted to the state.