Ill. Admin. Code tit. 86 § 850.155

Current through Register Vol. 48, No. 45, November 8, 2024

Section 850.155 - Notice of Engagement and Agreed-Upon Procedures

a) A qualified practitioner hired by a taxpayer who has received an actionable referral under Section 850.115(b)(3)(B) to perform a certified audit must submit a Notice of Engagement to the Department notifying it of the taxpayer's participation in the Certified Audit Pilot Program on behalf of the taxpayer on a form prescribed by the Department.

b)The information provided in the notification shall be submitted in the form and manner required by the Department and shall include the taxpayer's name, federal employer identification number or social security number, Department account identification number, mailing address, and business location, and the specific occupation and use taxes and period proposed to be covered by the engagement for the certified audit. In addition, the notice shall include the name, address, identification number, contact person, and telephone number of the engaged firm. [50 ILCS 355/10-35(a)]

c) The qualified practitioner must agree to conduct the certified audit using the Illinois Department of Revenue's agreed-upon procedures at the time of the qualified practitioner's submission of the Notice of Engagement.

1) The Department has established a list of agreed-upon procedures that qualified practitioners must follow in a certified audit. These designated agreed-upon procedures combine elements from the American Institute of Certified Public Accountants' Clarified Statements on Standards for Attestation Engagements with the Department's own audit standards.

2) Any deviations from the established list of agreed-upon procedures must be approved in writing by the Department. The qualified practitioner must submit a written request to the Department and receive written approval from the Department prior to making any additions, deletions, or revisions to the approved certified audit plan.

3) The Department will be the final authority on the nature, extent, and type of audit procedures.

d)If the taxpayer has received notice of an audit referral from the Department and has not been issued a written notice of intent to conduct an audit, the taxpayer shall be a participating taxpayer and the Department shall so advise the qualified practitioner in writing within 10 days after receipt of the engagement notice. However, the Department may limit the taxes or periods subject to the certified audit. [50 ILCS 355/10-35(b)] The Department may deny a notice of engagement for any of the following reasons:

1) the taxpayer has delinquent final liabilities for any tax that the Department administers (this does not include taxpayers currently on a payment plan approved by the Department's Collection Program Area to satisfy a delinquent final liability);

2) the taxpayer has voluntary disclosure agreements in place or pending for occupation or use tax for the audit period under consideration for the Certified Audit Pilot Program;

3) the taxpayer has been issued a notice of an upcoming occupation or use tax audit by the Department; and

4) the taxpayer does not have complete records available for the entire audit period under consideration for the Certified Audit Pilot Program.

e) If the Department denies the Notice of Engagement, the written notification to the qualified practitioner must set out the specific reasons for the denial unless an ongoing investigation would be jeopardized or confidentiality provisions would be breached.

f) If the taxpayer, qualified practitioner, or the taxpayer's legal representative files a protest and requests a hearing on the denial of the Notice of Engagement within 60 days after issuance of the denial, the Department shall give notice to the taxpayer, qualified practitioner, or taxpayer's legal representative of the time and place fixed for the hearing and shall hold a hearing in conformity with the provisions of the Retailers' Occupation Tax Act [35 ILCS 120 ]. After hearing, the Department shall issue a final determination to the taxpayer. If a protest to the denial of the Notice of Engagement and a request for a hearing thereon is not filed within 60 days after the issuance of the denial, then the denial shall become a final determination.

Ill. Admin. Code tit. 86, § 850.155

Adopted at 47 Ill. Reg. 14822, effective 10/4/2023