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IRS Audit Techniques
- Choose an IRS Audit Technique from the links on the right -->
:: Audit Techniques Guides (ATGs)
The
Audit Techniques Guides (ATGs) focus on developing highly
trained examiners for a particular market segment. These Guides
contain examination techniques, common and unique industry
issues, business practices, industry terminology and other
information to assist examiners in performing examinations.
Audit Techniques Guides are available here in
Adobe PDF and must be viewed
with the
Acrobat Reader. Several guides
are now also available to view online in HTML.
NOTE: These guides are current through the
publication date. Since changes may have occurred after the
publication date that would affect the accuracy of these
documents, no guarantees are made concerning the technical
accuracy after the publication date.
Accuracy - Related Penalties For Taxpayers
Involved In Tax Shelter Transactions
Publication Date: 08/04
This audit technique guide (“ATG”) was developed to support the
field in the consistent development and application of penalties
when a taxpayer was involved in an abusive tax shelter,
including “technical” tax shelters.
Aerospace Industry
Publication Date: 01/05
The Service has prepared a comprehensive audit technique guide
to assist examiners in evaluating research credit in the
aerospace industry. The guide focuses on the particular unique
aspects of the industry and provides examiners tools and tests
to utilize in evaluating and auditing research credit.
Auto
Body and Repair Industry (PDF - 247K)
Publication Date: 8/95
Overview of the industry. Discusses some issues that may be
encountered - including other sources of income; cost of sales;
employment taxes; etc.
Aviation Tax
Publication Date: 2/99
Pertains to excise taxes imposed on commercial and
non-commercial aviation. Discusses which set of taxes applies to
which type of flights.
Coal
Excise Tax
Publication Date: 05/05
Provides excise tax agents with specific tools to examine issues
relating to domestically produced coal.
Commercial Banking
(PDF - 701K)
Publication Date: 5/01
Overview of the industry. Discusses potential issues and
terminology unique to banking.
Construction Industry (PDF - 1812K)
Publication Date: 10/04
Overview of the industry including a glossary. Discusses types
of contracts; types of contractors (large, small, home builder);
change of accounting method; and joint ventures.
Credit for Increasing Research Activities (i.e. Research
Tax Credit) IRC § 41
Publication Date: 06/05
This Audit Techniques Guide sets forth the Research Credit
Technical Advisors’ suggested guidelines for auditing research
credit issues.
Cost Segregation Audit Techniques Guide
Publication Date: 01/14/05
The Service has prepared a comprehensive audit techniques guide
to assist examiners in evaluating cost segregation studies
submitted by taxpayers in support of depreciation deductions.
The guide is also beneficial for taxpayers and practitioners in
preparing these studies.
Drywallers (PDF - 101K)
Publication Date: 8/98
Overview of the industry. Addresses specific aspects of a
drywall contractor's business - business/economic environment;
relationship with general contractor; cash vs. accrual method of
accounting.
Executive Compensation - Fringe Benefits Audit
Techniques Guide
Publication Date: 02/04/05
Corporate executives often receive extraordinary fringe benefits
that are not provided to other corporate employees. Any property
or service that an executive receives in lieu of or in addition
to regular taxable wages is a fringe benefit that may be subject
to
taxation.
Factoring of Receivables Audit Techniques Guide
Publication Date: 06/06
This audit techniques guide focuses on a strategy in which
multinational corporations use factoring of accounts receivable
among related parties to avoid U.S. taxation by shifting income
offshore and reducing U.S. income by deducting expenses related
to the same income.
Farm
Hobby Losses (ATG) (PDF - 400K)
Publication Date: 03/01
This audit techniques guide has been developed to provide
guidance to Revenue Agents and Tax Compliance Officers in
pursuing the application of IRC Section 183 with respect to
horse activities and cattle operations.
Farmers Audit Techniques Guide (ATG)
Publication Date: 07/06
The Agriculture Industry Audit Techniques Guide (ATG) focuses on
developing highly trained examiners for the Agricultural market
segment. The Guide contain examination techniques, common and
unique industry issues, business practices, industry terminology
and other information to assist examiners in performing
examinations.
Farming -
Specific Income Issues and Farm Cooperative (PDF - 98K)
Publication Date: 7/97
Overview of the industry. Discusses potential for unreported
income from primary farm income and nonfarming sources.
General
Livestock
Publication Date: 4/00
Provides a focus on the business of breeding, raising, buying
and selling livestock.
Golden Parachutes Audit Techniques Guide
Publication Date: 02/04/05
The Service has prepared a comprehensive audit techniques guide
to assist examiners in evaluating parachute examinations. The
parachute examination can occur during the examination of either
the corporation's or the individual's return.
Grain Farmers (PDF file under revision)
Overview of the industry. Provides terminology. Topics discussed
include underreporting of income, employment taxes, accounting
methods, government farm programs, etc.
Hardwood
Timber Industry (PDF - 366K)
Publication Date: 2/98
Provides general and technical information useful to examiners
in classifying, preplanning and examining returns relating to
this industry.
IRC 162(m) Salary Deduction Limitation Audit Techniques
Guide
Publication Date: 02/04/05
Every publicly held corporation maintains its executive
compensation records
differently. Likewise, every publicly held corporation maintains
different methods
for compensating its executives. As the examining agent, you
must first learn the
identity of the individual(s) within the corporation who are
most familiar with how
the executive compensation records are maintained.
The
Laundromat Industry (PDF - 126K)
Publication Date: 6/00
Provides an explanation of water consumption analysis for
reconstructing unreported income from the operation of a
laundromat. This method is to be used only when there is a
reasonable indication of unreported income.
Lawsuit Awards and Settlements
Publication Date: 01/01
This guide focuses on taxability of law suit awards and
settlements.
Masonry
and Concrete Industry (PDF - 72K)
Publication Date: 8/98
Provides industry practices; description of the industry;
potential issues and terminology.
New Vehicle Dealership Audit Technique Guide
Publication Date: 1/05
This guide will give you the key to a quick and competent
closure of any new vehicle dealership examination which hinges
on narrowing the scope of the examination to items that may
prove productive.
Non-Qualified Deferred Compensation Audit Technique
Guide
Publication Date: 02/04/05
The Service has prepared a comprehensive audit techniques guide
to assist examiners in evaluating non-qualified deferred
compensation. A nonqualified deferred compensation (NQDC) plan
is any elective or nonelective plan, agreement, method, or
arrangement between an employer and an employee (or service
recipient and service provider) to pay the employee compensation
some time in the future.
Oil
and Gas Industry (PDF - 494K)
Publication Date: 5/96
Provides information on basic operations and common terminology.
Includes reference to royalty owners and an introduction to
financial products.
Partnerships
Publication Date: 12/02
The focus is on issues that fall within sections 701 through 761
of the Code (Subchapter K). Subchapter K deals primarily with
the formation, operation, and termination of partnerships. Many
issues arise during the initial or final year of the
partnership.
Passive
Activity Losses
Publication Date: 02/05
Provides examiners with specific guidance on potential audit
issues, issue identification and lead sheets and other job aids.
Placer
Mining
Publication Date: 7/99
Provides guidelines for the examination of taxpayers in this
industry. Focuses on small mining operations represented as sole
proprietorships on Schedule C, but can be adapted for
partnership and corporate returns.
Poultry Industry (PDF - 1568K)
Publication Date: 12/02
The purpose of this guide is to highlight issues that are
specific to or have a large impact on the poultry industry. Most
of the issues in this guide relate directly to the major
companies rather than the individual farmers. However, one
chapter has been devoted to the issues normally found in
conjunction with a poultry grower audit.
The Port
Project (PDF - 282K)
Publication Date: 8/95
Provides examiners assistance in auditing industries related to
coastal and inland waterways.
Reforestation Industry
Publication Date: 8/95
Overview of the industry. Discusses some issues that may be
encountered - including employment taxes; poor accounting
records; etc.
Rehabilitation Tax Credit (PDF - 353K)
Publication Date: 12/02
Provides examiners with audit aids (i.e. issue checksheet, pro
forma Information Document Request, and standardized audit
reports, etc.) which assist in identifying and addressing common
rehab tax credit issues.
Retail Industry
Publication Date: 8/05
Overview of the Retail Industry.
Scrap
Metal Industry
Publication Date: 2/99
Provides overview of industry, glossary and examination
techniques for both purchasers and sellers of scrap metal.
Shareholder Loan (ATG) (PDF - 254K)
Publication Date: 06/01
This guide has been developed to provide guidance in addressing
arm's length concerns, the timing of interest recognition, and
the allocation of interest and principal. This guide addresses
only issues regarding loans to shareholders.
Split Dollar Life Insurance Audit Techniques Guide
Publication Date: 03/07/05
Split-dollar life insurance arrangements can be a key feature of
executive compensation packages. Over the years, the Service has
provided limited guidance regarding the taxation of these
arrangements. Beginning in 2001, transitional guidance on the
valuation of split-dollar life insurance arrangements was
provided in the form of notices and proposed regulations in
anticipation of final regulations.
Sports
Franchises
Publication Date: 8/99
Focuses on major league franchises. Potential issues may include
revenue (sponsorship, broadcast, season tickets), strike fund
payments, stadium issues, player contracts, purchase/sale of
franchise, league expansion, etc.
Stock Based Compensation Audit Techniques Guide
Publication Date: 02/04/05
The Service has prepared a comprehensive audit techniques guide
to assist examiners in evaluating stock-based compensation.
Stock-based compensation generally consists of either the
transferring of stock or the issuance of stock options to an
employee or independent contractor.
Swine Farm Industry (PDF - 920KB)
Publication Date: 12/02
Overview of the industry includes methods of accounting (accrual
vs. cash), farm price inventory, unit livestock price, prepaid
feed, income from discharge of indebtedness, selection fees,
depreciation, grower issues, penalties, research credits,
employment taxes, and excise taxes.
Tobacco
Industry (PDF - 174K)
Publication Date: 3/96
Focuses on techniques for examining tobacco farmers, dealers and
warehouse operations.
Veterinary
Medicine
Publication Date: 4/05
Overview of industry includes discussion of types of business
entities (especially personal service corporation); cash vs.
accrual method of accounting; and inventory vs. supplies.
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