Tax Audit - Manufacturing Industry Edition Ebook

TABLE OF CONTENTS

Chapter 1

• Principal Industry Activity (PIA), Principal Business Activity (PBA), and Standard Industrial Classification Codes 1-3
• Manufacturing 1-2
• Introduction Purpose 1-1
• Industry Specialization Program (ISP) 1-4
• How This Guide Is Presented 1-1
• Audit Technique Guides (ATG) 1-4

• Understanding the Production Process Introduction 2-1
• Types of Manufacturers 2-1
• Touring the Facilities 2-11
• Specific Observations 2-13
• Specialty Referrals 2-7
• Ratio Analysis 2-9
• Planning the Audit 2-2
• Initial Interview 2-10
• Identification of Potential Issues/Tax Return Analysis 2-2
• Flowcharting the Production Process and Related Source Document Flow 2-15
• Costing Methods for Manufacturing 2-2
• Comparative Years Analysis 2-8

• Required Filing Checks Introduction 3-1
• Related Returns 3-12
• Other Related Return Issues 3-17
• Other Employment Tax Issues -- In General 3-4
• Interest Free Adjustments 3-6
• Information Returns Statute of Limitations 3-10
• Information Returns 3-6
• Identifying Related Returns 3-13
• Form 1099 3-7
• Foreign Entities 3-20
• Examination Techniques 3-7
• Employment Tax Reconciliation 3-1
• Employee Versus Independent Contractor 3-2
• Corporate Taxpayer -- Shareholder Issues 3-13
• Backup Withholding 3-10
• Assertion Procedures 3-11
• Abatement Procedure 3-12

• Schedule M-1 and Schedule M-2 4-26
• Retained Earnings 4-25
• Reconcile the Book Accounts to the Return 4-4
• Preliminary Audit Steps 4-4
• Loans to/from Shareholders 4-14
• Inventory 4-14
• Interrelationship Between Balance Sheet and Income Statement 4-2
• Effect of Balance Sheet Adjustments on Taxable Income 4-3
• Comparative Analysis 4-5
• Cash 4-6
• Capital Stock/Capital Account 4-24
• Building and Equipment 4-18
• Balance Sheet Introduction 4-1
• Auditing a Balance Sheet Account and Schedules M-1 and M-2 4-5
• Accounts Receivable 4-10
• Accounts Payable, Other Current Liabilities and Other Liabilities 4-21