The entrance conference is a meeting between the auditor and the taxpayer or taxpayer's designated representative, prior to beginning the examination of the taxpayer's books and records. This is generally the first face-to-face meeting between the taxpayer or representative and the auditor.
The entrance conference is the foundation of a good audit and generally sets the tone of the auditor's dealings with the taxpayer. The taxpayer should be left with the impression that the auditor will be honest and fair, flexible and interested in serving the taxpayer, and willing to educate and assist the taxpayer.
During the entrance conference the auditor should make the taxpayer aware of the purpose of the audit and what is expected of the taxpayer, as well as what the taxpayer may expect of the auditor.
Upon arrival at the taxpayer's place of business, the auditor should properly introduce himself or herself, present Agency business card and when appropriate, the proper identification. Then the auditor should hold a preliminary discussion with the taxpayer and/or his representative(s) about the business and the audit, including the following policies:
Questions that were not covered during the telephone contact should be discussed during the entrance conference (See Telephone Contact).
The 67th Legislature established a four-year statute of limitation for all taxes. The Legislature also allowed for an extension of the statute of limitation up to two years. An Agreement to Extend Period of Limitation form is the most frequent method of extending the statute. The form, once it is signed by the auditor and authorized taxpayer representative, then constitutes a legal document. It establishes a new expiration date for specific reporting periods to allow for the completion of an audit.
|1)||One for the audit package as an Exhibit, and|
|2)||One, for the taxpayer's records, given at the time the agreement is signed by the taxpayer or the authorized representative|
|(a)||The original statute expiration date of the period(s), OR|
|(b)||The extended expiration date(s) on the previously executed agreement(s).|
The audit period for a monthly filer is August 1, 2002, through July 31, 2006. An agreement was previously agreed and signed on September 15, 2006 to extend report periods 0208 through 0301 until March 20, 2007. Statute of Limitations for report period 0302 will expire before the audit can be submitted. A new agreement must be signed extending report period 0302 on or before March 20, 2007. In addition, the audit periods previously extended must now be included in the new agreement and also extended to the new date.
The periods(s) extended should only be the period(s) in danger of expiring before the audit is processed. The taxpayer will continue to be entitled to credits or refunds on periods extended by the agreement. However, the statute expiration for a vendor's refund assignment is not affected by the taxpayer's statute extension.
A new waiver may be necessary if the extended expiration date is nearing and the auditor will require more time to complete the audit. This new waiver form should include those periods previously extended as well as the additional periods.
The person who signs a statute extension agreement on behalf of a taxpayer must have clearly established authority to enter into a binding contract. An owner or partner would have such authority in an audit of a sole proprietor or partnership. An officer or director would have such authority in an audit of a corporation.
The Audit Questionnaire can provide sufficient written authorization if signed by the owner, partner, officer, or director. When an employee or third party representative claims apparent authority to extend the statute, the auditor should obtain written authorization from the owner, partner, officer, or director. This is especially important when there has been an ownership change or when a corporate reorganization has occurred. If a questionnaire was not returned, one needs to be obtained at the entrance conference. The questionnaire is attached to the Audit Plan and becomes part of the audit package.
CATS adds the following information to the form based on the taxpayer information section of Assignment Detail:
IMPORTANT: The reasons listed in CATS are the only reasons authorized by the statute for extending the assessment date:
DO NOT ADD ANY OTHER REASONS by amending the form in Word.
DO NOT ALTER ANY OF THE LISTED REASONS.
NOTE: The Agreement to Extend Period of Limitation is to be used when legitimate scheduling problems on the part of the taxpayer causes the audit field work to be delayed. Extensions may also be necessary when unforeseen audit problems arise and cause delays. Extensions are not tools for overcoming poor audit inventory management. (Interoffice Memo AD 17)
In 2015, the Texas Legislature passed House Bill 855, which requires state agencies to publish a list of the three most commonly used Web browsers on their websites. The Texas Comptroller’s most commonly used Web browsers are Google Chrome, Microsoft Internet Explorer and Apple Safari.