42-2302. Managed audit agreements

A. On application by a taxpayer, the director, in the director's sole discretion, may agree to a managed audit with the taxpayer. The managed audit agreement shall:

1. Be signed by the taxpayer and the director.

2. Contain a declaration by the taxpayer that all statements of fact in the taxpayer's application and agreement are true and correct for every material matter.

3. Specify the types of taxes, the reporting periods, any limitations on the scope of the managed audit, the name of the taxpayer's authorized representative, if any, and the audit plan, including the procedures to perform the managed audit.

B. The managed audit agreement may be modified in writing if the agreement is signed by the taxpayer and director and the agreement complies with subsection A of this section.

C. The director may consider all relevant factors when determining whether to agree to a managed audit agreement, including:

1. The taxpayer's history of tax compliance.

2. The amount of the taxpayer's time and quality of resources that the taxpayer can dedicate to the audit.

3. The extent and availability of the taxpayer's records.

4. The nature and scope of any legal dispute with the department and its relevance to the managed audit proposal.

D. A managed audit agreement for taxes under chapter 5 of this title shall include county excise taxes. A taxpayer may request that the managed audit agreement include city and town excise taxes and the department shall notify the cities or towns in which the taxpayer conducts business. If a city or town does not agree to participate in the managed audit agreement, the city or town shall not conduct an audit of the taxpayer for forty-two months from the end of the last tax period that is covered by the managed audit agreement unless an exception applies pursuant to section 42-2059.