(RIVERWOODS, ILL., July 12, 2002) – When a state audits a company’s sales and use taxes, the stakes can be high and missteps can be costly. When the state auditor wants to use statistical sampling in a sales tax audit, everyone involved must take special care to avoid statistical pitfalls that can lead to incorrect assessments. To help all concerned make sure that statistical sampling is applied correctly, CCH INCORPORATED (CCH), a leading provider of tax and business law information and software, has published Statistical Sampling in Sales and Use Tax Audits, by noted expert and author Will Yancey, Ph.D. and CPA. ($75, 203 pages. To order, call CCH at 1-800-248-3248 or visit the CCH Online Store at onlinestore.cch.com.)
Statistical sampling is a practical and logical way to conduct audits when it is impractical to examine every single transaction, and states have been increasingly relying on this audit technique, according to John Logan, JD, senior tax analyst for CCH.
“Statistical sampling is replacing block sampling, in which an audit would look at every transaction in a given time period. This makes it imperative for business taxpayers and government agencies alike to have a sound understanding of the statistical, accounting, legal and information systems issues involved in this technique,” Logan said.
Detailed, Critical Issues
From the scheduling of an audit to a potential appeal of the results, taxpayers have decisions to make. The purpose of this volume is to give taxpayers an understanding of the audit process and help them make decisions that will lead to a positive outcome.
Author Yancey begins with an overview of the legal and accounting environment for sales and use tax audits and lays the foundation for a deeper understanding of the issues involved. He then takes the reader through each step involved, such as population analysis and sample planning, provides a practical overview of the techniques of statistical evaluation and offers advice on negotiating with the state over disputed transactions. A separate reference chapter includes extensive bibliographies of tax audit sampling and sampling theory, as well as software applications and publishers for data extraction and population analysis and for statistical sample evaluation.
Yancey provides practical guidance on dealing with computer-assisted audit techniques and checking data files before sampling. Detailed but critical issues, such as which data files to use, distinguishing between billing and delivery addresses to determine nexus and identifying which date fields are determinative are all addressed.
An especially useful feature is an extensive summary of relevant law and administrative guidance on sampling for all states that impose sales and use taxes. This state-by-state treatment cites relevant statutes, regulations, rules, administrative law decisions and court cases.
About the Author
Will Yancey – a CPA with a doctorate in accounting – consults, writes and presents on audit sampling for businesses, government agencies, law firms, consulting firms and professional organizations. Yancey has made dozens of presentations on sampling to groups such as the Council On State Taxation (COST), the Institute for Professionals in Taxation (IPT), the Tax Executives Institute (TEI), the University of Wisconsin—Milwaukee Multistate Tax Conference, the Hartman State and Local Tax Forum at Vanderbilt University and tax conferences for many states.
In 1999, he won the IPT Literary Award for his paper on sampling in sales and use tax audits. His articles and correspondence were cited or requested during the development of audit policy manuals of the California State Board of Equalization, New York State Department of Taxation & Finance, Tennessee Department of Revenue, Washington Department of Revenue and others.
Availability and Pricing
For more information or to order the 203-page Statistical Sampling in Sales and Use Tax Audits, contact CCH at 1-800-248-3248 or visit the CCH Online Store at onlinestore.cch.com. Single copy price is $75 plus applicable tax, shipping and handling. Quantity discounts and school adoption pricing are available.
About CCH INCORPORATED
CCH INCORPORATED, headquartered in Riverwoods, Ill., was founded in 1913 and has served four generations of business professionals and their clients. The company produces more than 700 electronic and print products for the tax, legal, securities, insurance, human resources, health care and small business markets. CCH is a wholly owned subsidiary of Wolters Kluwer U.S. The CCH web site can be accessed at cch.com. The CCH federal and state tax web site can be accessed at tax.cchgroup.com.