A Case Study in Cutting Edge Audit Automation (and Notices)
At the 2013 Association for Computers in Taxation (ACT) Annual Conference on May 20-22, 2013 in at the Hilton Clearwater Beach Resort in Clearwater Beach, Florida I had the opportunity to co-present a session titled “A Case Study in Cutting Edge Audit Automation (and Notices)”. My co-presenter was Blake Martin, the Vice President and Head of Tax at Lincoln Financial Group. We were asked to present on this topic as federal coffers continue to dry up and cash hungry states get more aggressive than ever before. With the audit environment ever more challenging and tax departments struggling to keep ahead of the endless supply of notices and concurrent audits, this presentation was timely…and I believe very well received.
We started out by sharing some great insights from around the country pertaining to the latest in Federal, State and Local audits, as well as some of the biggest concerns from tax pros out there. We then dove into the detailed case study of how Lincoln Financial Group decided to fully automate its notices and audit cycles using the eTaxPortal – AuditRoom and Notice Tracker. Being a Fortune 500 company with over 30 tax professionals in 3 locations with the audit team in Indiana, and other tax and audit data stakeholders in many more locations, it was crucial for the tax department to get control of the process. Their objectives are to continuously improve the process, ensure standardization and efficiency and to reduce overall risk.
Some of the key goals of this automation included the following:
- Increase delivery and resolution time for audit inquiries
- To reduce the manual steps associated with tax department mail processing
- Reduce the amount of time that mail becomes actionable
- Improve controls and accountability
- To make all tax examinations more efficient, current and collaborative
- Reduce exposures
- Assist in automating “Continual Audit Program” (CAP) for Federal Audits
What was the scope?
- Electronic document storage and workflow around all notices (tax and non-tax). This included Federal & State Income, Premium Tax, Sales & Use Tax, Information Reporting, Federal Withholding, FICA, FUTA, SUTA, State Withholding, Personal Property Tax, Real Property Tax, Guarantee Fund Assessments and State & Local Business Licenses
- Full end to end automation and tracking from audit inception through protest and appeals including (across all tax types and jurisdictions):
- Information Document Requests (IDRs)
- Notice of Proposed Adjustments (NOPAs, NPAs)
- Revenue Agent Reports (RARs)
- Tax Claims
- Protest & Appeals
Thought I’d share the presentation with you here. You miss some of the side discussions and off slide topical meanderings, but I think you will still get a lot out of it. Feel free to let me know if you have any questions! Blake also shares some of the additional automation items he has slated for the coming year. Some of those automation ideas are not all that common. He has some interesting thoughts on how to use technology to eliminate and control areas that are the most time consuming and risky from an overall tax department perspective. I would also be happy to share the thinking behind those items and how we are going to approach it, if you are interested.