For the first time in years, the Internal Revenue Service (IRS) has a major hiring initiative that’s bringing in many new employees. As a result, taxpayers and their representatives might encounter a relatively new IRS examination agent or auditor. One telltale sign that you have a new auditor is that he or she will be accompanied by an on-the-job instructor (OJI). The new auditors will be trained but may not be experienced in field, office, or correspondence exams. Here’s what taxpayers can expect when encountering a new auditor.

A new IRS auditor might be nervous because he or she is new on the job and because the OJI will be present throughout the audit. Taxpayer representatives can put new auditors more at ease by asking where the auditor and OJI are from and about their professional background both inside and outside the IRS. Practitioners might also ask where the auditor received his or her training, how long the classes were, and what subjects were covered. Not only are people proud of their professional accomplishments, but sharing this information helps the practitioner assess the level of knowledge that the auditor has and how best to communicate the facts and law pertaining to the case at hand.


The IRS may request a field audit or an office audit. Taxpayers or their representatives who hold a valid power of attorney can request a change of venue, a change to the field audit site, a change of auditors, or a change of area office.

Per the Internal Revenue Manual (IRM) section, the site of a field audit depends on where the books and records are normally maintained.

A taxpayer representative requesting a transfer of an examination should make that request in writing (IRM That request must include the reason for the transfer, the current address(es) and phone number(s) of the taxpayer and business, and the location of books and records. In the taxpayer representative’s request, the “representative must indicate that they are in possession of the records to be examined and will make them available in an expedient manner,” per IRM The location of the taxpayer’s representative is generally not considered when determining where the audit will take place. If the transfer is for an audit of a joint return, both spouses must be aware of the transfer request and the decision.

Per IRM, auditors evaluate written requests to change venues on a case-by-case basis, in accordance with Treas. Reg. §301.7605-1. If a taxpayer disagrees with a transfer, the auditor will consider where the audit can be performed most efficiently (Reg. §301.7605-1(e)(1)(iv)).

There should be at least 13 months remaining on the assessment statute expiration date as of the date that the taxpayer’s transfer request is received; otherwise a one-year extension on the statute date will normally be requested as a condition for the transfer (Reg. §301.7605-1(e)(4)). These decisions usually take 10 to 30 days. Throughout this process, auditors are being judged on their ability to perform and make decisions.


New auditors are likely not as familiar with the tax laws as experienced taxpayer representatives. If this is the case, explaining the law as if it were new and specifically citing the taxpayer’s position back to the Internal Revenue Code, regulations, and court cases can speed up the audit process.

New auditors are also being trained to make evidential, factual determinations, so producing relevant, available records is very important. New auditors are also trained to enforce the law without exception. For example, expect exceptions due to hardships or hazards of litigation to be handled in appeals rather than by the auditor.

It’s likely that the new auditors will be trained rather uniformly across the country. A typical audit may go like this: The auditor will generally confirm gross income through discussion with the taxpayer and by checking accounts for deposits of undeclared income. Financial statements used for third-party purposes such as bank loans are very useful, especially if the loan was granted, because when preparing such statements, it’s in the taxpayer’s best interest to have the highest possible income, contrary to the taxpayer’s motivation when preparing tax returns. Financial statements that are consistent with tax returns produce strong evidence, especially if the financial statements have been audited by a CPA.

In an audit for an individual, large losses, capital transactions, or carryover items may be targeted. In a corporate audit where the taxpayer owns a small corporation, the auditor may look for the existence of constructive dividends, shareholder loans, thin capitalization, and other items that are subject to shareholder/corporation arbitrage to avoid payroll taxes or double taxation of dividends. Where these opportunities exist, the shareholder is often also brought in to a corporate audit. Similarly, where an individual is influential in a partnership, the auditor may scrutinize guaranteed payments for services by examining both the partnership and partner’s returns.

Overall, auditors are being trained to look for an audit adjustment, an agreement, and where possible, a one-day audit. Not every audit fits this mold, and some audits may even be examined for civil fraud, especially if a taxpayer has a large amount of unreported income. Yet “one and done” is likely the auditor’s goal, where feasible.

As tax disagreements arise, the taxpayer’s representative might agree to table unagreed items until the audit is finished because they might ultimately be immaterial and concessions may be made. Alternatively, the taxpayer representative can agree to disagree with the auditor and prepare an appeal. This strategy is efficient for both the IRS auditor and the taxpayer representative, although appealing a case is more work for the auditor. This may cause an auditor trepidation about a case going to appeals, and the new auditor may be more favorable to a fair settlement.

With more IRS personnel, there will be more new auditors, and practitioners might meet up with these auditors many times in the future. First impressions may be the most permanent ones, so patience and empathy may just pay off.

© 2020 A.P. Curatola

Change management leader Prosci, Inc. defines change management as “the process, tools and techniques to manage the people side of change to achieve a required business outcome.” While change is inevitable, it can be a little scary when it comes to your job. We’ve all read the headlines that as technology advances, many careers will be impacted and some face potential elimination.

It’s no wonder that employees often view new technology with trepidation. When we implement change, we ask that they throw aside their tried-and-true methods and take our word that this new technology is beneficial and critical to the business. We tell them that this change will add efficiencies and allow them more time for value-adding activities. Ultimately, successful change management takes more than taglines and posters. It’ll put your soft skills to the test as you navigate the human response to change. In order to properly execute change management, there are a few key areas to consider.


Proper change management takes time. Like any other aspect of a project, change management requires a well-thought-out plan and the resources to execute the plan. As you build your plan, consider the following:

  • Know your organization.

* How well has your organization adapted to change in the past?

* What are your employees’ technical skills?

* How long has your organization been using the current solution?

* How different is the new technology from the old?

  • Identify potential obstacles.
  • Identify someone to oversee the change management plan.

The tone at the top is crucial to successful change management. Leadership at both senior and middle management levels can either make or break a project, so it’s critical to gain their support. As leaders, their attitude toward the project will be observed by their teams. They are also in the best position to communicate the benefits of the project to their employees in a way that will truly resonate. Their teams will be looking to them for coaching and guidance on how to adopt the change. Finally, they have access to the people you’ll need throughout the project from both a design and testing standpoint. For all these reasons, it’s important to include leadership support in your action plan and provide them with the resources they need, such as key talking points to ensure consistent messaging across the organization.


The first question employees will ask is “What’s in it for me?” As with any kind of change, people need to understand how it’ll impact them and why they should care. Success of the project is in large part defined by employee adoption. This is why it’s key to involve them throughout the project. In order to embrace change, employees need to feel heard.

True ownership comes from involving staff in identifying issues and developing solutions. By involving employees in the design, you’ll gain support and they’ll feel a sense of ownership. When employees feel like they are part of the project and engaged, they will do everything they can to ensure its success. Including employees in the process can also be very beneficial to the project, as it provides the team with different perspectives and insights that lead to more impactful process improvements.


When implementing new technology, always keep in mind who will be impacted the most. Your end users will be impacted on a daily basis, and while the technology will be beneficial, in the beginning it’ll be disruptive to their daily routines. It’s your job to help them through this process of change and acknowledge the disruption.

Everyone embraces change at his or her own pace, so it’s important to remain patient with employees. When it comes to technology, not everyone learns at the same speed. Some are very quick to understand how a new system works while others may require additional explanations and time. Knowing this going into a project will make it easier for you to adapt your approach and display genuine empathy and patience with your employees.


Throughout the project from kickoff to even after go-live, employees will be relying upon the team for effective communication. Developing a communication plan starts with the identification and evaluation of stakeholders. Not everyone will be impacted to the same degree, so the communication plan will need to be tailored to the stakeholder, identifying both the communication methodology and frequency.

Communication methods can include email, videos, face-to-face, and group presentations. Employees will have a lot of questions throughout the process, so providing them a place to go such as an internal webpage would be helpful. The site should contain the team structure and names of members, updates, FAQs, and a method to submit questions. Communication works both ways, so the team members must be good listeners and not just focus on relaying information.


Training is a critical component of any implementation, allowing an opportunity to not only train employees on the new technology but also processes and behaviors. In training, employees find it helpful to have something to refer to, including job aides, presentations, and videos. Other reference material can include FAQs, process flowcharts, cross maps, and definitions of new terminology. These materials should be reviewed by end users to ensure their effectiveness. Employees should also be provided with a contact method for assistance after go-live. This is especially important so that employees continue to feel supported during the change.

Implementing new technology is exciting and a great opportunity to improve business processes. Change management issues can be avoided by remembering these key areas: develop a solid change management plan that includes a communication component; start the project off on the right foot with leadership support; engage employees in the process; provide training and support; and acknowledge the human element. Enthusiasm is contagious. An organization that’s well prepared for change can accomplish great things together!

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