To further explain, as an audit strategy, we typically try to limit the auditors exposure to company personnel. The reason for this is to limit the information the IRS receives to only the specific questions they ask and not provide any additional information. After the tour we ask the IRS to leave your premises and work from our office so they are not asking any of your employees questions when management is not present to hear what they are being told. If the auditor asks a question of Kay or one of the officers, it would be expected that they should be able to answer the question immediately. If the auditor is at our office and they ask me the question, I’m not necessarily expected to have all the answers immediately, this allows us time to formulate an appropriate response. When I spoke to the IRS auditor, she let me know that she planned to work from her office after the plant tour tomorrow. We will also discuss logistics at the meeting in the meeting tomorrow morning.
The only thing that I was surprised to see was the engineer on the list of attendees of the opening meeting. The engineer is involved to evaluate the Research Credit, and is typically brought in separately during the course of the audit, not at the initial meeting. I spoke to the IRS auditor this morning and she is going to remove him from the agenda. A separate tour can be then be scheduled with a Deloitte representative who prepared the research credit study at a later date.
I apologize for not reaching out to you sooner to discuss the audit. Would you have time for a brief call today to discuss it? I’m in the office until 2pm today and then will be out at a meeting in the afternoon. I’m also available tomorrow morning before the meeting at 9:30am at your office