Managed Audit Programs
Facing a state audit can feel overwhelming, but some states provide an alternative: Managed Audit Programs. These programs encourage cooperation by reducing penalties if you agree to participate and follow structured guidelines. Instead of waiting for the state to dictate every step, you gain more control, shorten the audit timeline, and often save significant money. Our CPA team in New York evaluates your eligibility, manages the entire process, and safeguards your interests from start to finish — ensuring that “cooperation” doesn’t turn into unnecessary overexposure.
Why Managed Audit Programs Matter
Traditional audits can stretch on for months or even years, leaving businesses drained by documentation requests and exposed to mounting penalties. A managed audit program flips the script — instead of being investigated, you are given the framework to review your own records under state oversight.
While this approach sounds straightforward, it’s not without risk. If you don’t fully understand the scope or misapply sampling methods, you could inadvertently increase your liability. That’s why CPA guidance is essential. We help you navigate eligibility requirements, determine the scope of the audit, and ensure the process works in your favor — not against you. With expert oversight, a managed audit can mean lower penalties, faster resolution, and greater predictability.
What’s Included
Eligibility evaluation to confirm whether a managed audit is right for you
Support with scope and sampling methods to ensure accurate reporting
Direct coordination with state authorities — we handle communication on your behalf
Reduced penalties compared to traditional audit pathways
Faster, more predictable resolution so you can move forward confidently
We Help With
Confusion over whether your business qualifies for a managed audit program
Fear of miscalculating tax liabilities during sampling and review
Overwhelm from state documentation requests and compliance demands
Risk of agreeing to terms that increase liability instead of reducing it
Lack of strategy for minimizing penalties and ensuring fair treatment
Explore More Audit Support Services
IRS audit issues often overlap with other tax challenges. That’s why our Audit Support category includes a full range of services:
- Back Taxes Help — file missing returns, reduce penalties, and stop collections
- IRS Audit Representation — defend your business during federal or state audits
- Voluntary Disclosure Agreements (VDAs) — resolve past exposure discreetly with favorable terms
- Reverse Audit (Refund Recovery) — recover overpaid sales and use taxes
FAQs: Managed Audit Programs
A CPA helps you avoid overpaying taxes and build a strategy that supports your financial goals. Here’s what you need to know about tax filing, planning, and audit representation —whether you’re in New York or anywhere in the US.
What exactly is a managed audit program?
A managed audit program is a voluntary agreement offered by certain states that allows taxpayers to conduct part of the audit process themselves under state supervision. Instead of waiting for auditors to comb through years of records, you work with the state to determine the scope, sampling methods, and reporting. In exchange for your cooperation, penalties are typically reduced or waived. It’s designed to encourage voluntary compliance while saving time and resources for both the taxpayer and the state.
Are managed audits always the best option?
ot necessarily. While they can lead to reduced penalties, managed audits require careful execution. If the sampling or scope is mishandled, you could end up disclosing more liability than necessary. For example, if your internal review overestimates taxable transactions, the state may use that as the basis for assessment. Our role as CPAs is to evaluate whether this option makes sense for your specific case and to manage the process so you don’t unintentionally increase your exposure.
How do states decide who qualifies for a managed audit program?
Eligibility depends on state-specific rules, but generally, managed audits are offered to taxpayers who show a willingness to cooperate and whose records are considered suitable for self-review. Some states limit the program to certain industries or transaction sizes. Part of our service is to review your case, determine eligibility, and prepare the strongest possible application so you can take advantage of this opportunity if it fits your situation.
Will participating in a managed audit limit how far back the state can look?
Often, yes. Like VDAs, managed audits may include agreements on the look-back period, which can significantly reduce exposure compared to a full-scale audit. The exact terms depend on negotiations and state policies, which is why having CPA representation matters — we know how to structure agreements that protect your interests while maintaining compliance.
Does cooperating in a managed audit mean I lose leverage?
Cooperation doesn’t mean surrender. In fact, a managed audit can give you more leverage because you’re proactively involved in determining the scope and methodology. The key is to cooperate strategically — providing what’s required, while protecting your position. With CPA oversight, you get the best of both worlds: reduced penalties through cooperation and strong representation to ensure fairness.
