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Feds Looking for Revenue with More Audits

The IRS and state tax agencies are trying to boost revenues with more audits.

A survey of 890 corporate tax executives conducted by KPMG shows that 61 percent have noticed an uptick in federal tax dispute activity over the past year. State auditors are also stepping up their regulatory efforts, with 37 percent of respondents reporting an increase in the regions where they

A survey of 890 corporate tax executives conducted by KPMG shows that 61 percent have noticed an uptick in federal tax dispute activity over the past year. State auditors are also stepping up their regulatory efforts, with 37 percent of respondents reporting an increase in the regions where they operate.

"Tax directors, CFOs and corporate boards should keep the increased likelihood of an audit by taxing authorities high on their priority lists as it presents a significant tax risk," advised Frank Lavadera, principal-in-charge of KPMG LLP's tax dispute resolution services network. He added that tax authorities wanted companies to be more transparent and submit more complex, detailed reports. In addition, the IRS and state governments are filling out their auditing labor pools.

KPMG recommends that companies start preparing now by going through all their procedures and policies to ensure they are compliant. Gathering important documents ahead of time will enable the organization to be ready in the event of an audit notification and avoid a mad scramble later on.

CFOs may want to strengthen their internal audit committees and root out any internal bookkeeping risks now, as federal regulators are starting to increase the frequency with which they conduct internal audits, CFO World reports. 

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