Managed Audit Programs
Why Managed Audit Programs Matter
State audits don’t have to be prolonged, adversarial, or unpredictable. Managed audit programs offer a structured alternative that allows businesses to resolve tax exposure through cooperation rather than enforcement. When handled correctly, this approach can shorten timelines, reduce penalties, and bring greater certainty than traditional audits.
At BlancPeak, our CPAs evaluate eligibility, define audit scope and sampling, and manage communication with state authorities. We ensure cooperation works in your favor — limiting unnecessary exposure while moving the process toward a faster, controlled resolution.
What's Included
- Eligibility evaluation to determine whether a managed audit is the right fit
- Guidance on audit scope and sampling methods to ensure accurate reporting
- Direct coordination with state authorities — we manage all communication on your behalf
- Reduced penalties compared to traditional audit processes
- Faster, more predictable resolution so you can move forward with confidence
We Help With
- Uncertainty about whether your business qualifies for a managed audit program
- Concerns about miscalculating tax liabilities during sampling and self-review
- Overwhelm from extensive state documentation and compliance requests
- Risk of agreeing to audit terms that increase liability instead of reducing it
- No clear strategy for minimizing penalties or ensuring fair treatment
Explore More Audit Support Services
Effective managed audit programs start with proactive, strategic action. Explore other services in our Audit Support category:
FAQs: Managed Audit Programs
Managed audit programs provide a cooperative alternative to traditional enforcement. These FAQs explain how managed audits work, eligibility requirements, audit scope and sampling, look-back periods, penalty treatment, and how to protect your position.
What exactly is a managed audit program?
Managed audit programs are a voluntary arrangement offered by certain states that allows taxpayers to participate directly in the audit process under state supervision. Instead of a traditional, adversarial audit, you work with the state to define the scope, sampling methods, and reporting approach. In return for cooperation, penalties are often reduced or waived. The goal is to resolve issues more efficiently while conserving time and resources for both the taxpayer and the state.
Are managed audits always the best option?
Not necessarily. While managed audits can reduce penalties and expedite resolution, they require meticulous execution. If sampling methods or scope are misapplied, you could unintentionally overstate taxable activity and increase your liability. Our role as CPAs is to assess whether a managed audit is suitable for your situation and to oversee the process, ensuring cooperation doesn’t lead to unnecessary exposure.
How do states decide who qualifies for a managed audit program?
Eligibility depends on state-specific rules, but managed audits are typically offered to taxpayers who demonstrate good-faith cooperation and maintain records suitable for self-review. Some states restrict eligibility by industry, transaction volume, or audit history. We evaluate your facts, confirm eligibility, and prepare the application to position your case as favorably as possible.
Will participating in a managed audit limit how far back the state can look?
Often, yes. Managed audits may include negotiated look-back periods that reduce exposure compared to a full audit. The terms vary by state and case, which is why CPA representation matters. We help structure agreements that limit unnecessary reach while keeping you fully compliant.
Does cooperating in a managed audit mean I lose leverage?
No. Strategic cooperation can actually increase leverage by allowing you to help define the audit’s scope and methodology rather than reacting to unilateral state demands. With CPA oversight, you gain the benefits of cooperation — such as reduced penalties — while maintaining strong representation to ensure the process remains fair and controlled.
