How to Be Tax Auditor - Job Description, Skills, and Interview Questions

Jan 4, 2020 / 6 Minutes Read / By Albert

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When businesses fail to properly document and report their financial activities, they put themselves at risk of incurring costly tax audits. Tax audits are conducted by the IRS to ensure proper tax compliance and to identify any potential discrepancies. The consequences of an audit can be severe, ranging from additional taxes and penalties to possible criminal prosecution. To avoid these risks, businesses should ensure that they are properly filing and documenting their taxes, as well as making sure they are in compliance with all applicable tax laws.

Steps How to Become

Earn a Bachelor's Degree. Most employers require tax auditors to have a bachelor's degree in accounting, finance, business administration or a related field. Coursework in accounting, auditing, economics and tax law are beneficial.
Get Professional Certification. Professional certification is not required to become a tax auditor, but it can provide an edge when competing for positions. The American Institute of Certified Public Accountants offers the Certified Information Technology Professional designation.
Complete an Internship. Many employers prefer individuals who have had internship experience in a related field. Internships provide valuable hands-on experience and can give individuals an edge when competing for positions.
Obtain Work Experience. Many employers prefer tax auditors who have at least two years of experience in the field. Individuals can gain experience by working as an accountant or in a related field.
Pass the IRS Exam. The Internal Revenue Service (IRS) requires tax auditors to pass an exam to become certified. The exam covers a variety of topics, including federal tax laws, accounting principles and ethics.
Prepare for the Job. Tax auditors must be familiar with the latest tax laws, regulations and financial reporting guidelines. They must also be able to effectively communicate with taxpayers and understand the complexities of the tax system.

Tax auditing is a complex process that requires a high level of skill and capability. It involves examining financial documents to ensure that all necessary information is reported correctly and that taxes have been paid in compliance with applicable laws and regulations. Tax auditors must possess strong problem-solving, analytical, and organizational skills, as well as the ability to pay close attention to detail.

They must also have a deep understanding of tax codes and regulations, as well as proficiency in using tax and accounting software. By having such skills and capabilities, tax auditors can help businesses ensure their taxes are paid accurately and on time, thus avoiding costly penalties and fines.

You may want to check Operational Risk Management Auditor, Quality Auditor, and Information Security Auditor for alternative.

Job Description

Review financial records and documents to ensure accuracy and compliance with tax regulations.
Prepare and submit accurate tax returns and payment to the appropriate government agencies.
Analyze and interpret financial information to identify potential tax liabilities or savings.
Communicate with clients to provide tax advice, answer questions, and address any concerns.
Identify potential tax deductions and credits that may reduce a clients overall tax burden.
Research and stay up to date on changing tax laws and regulations.
Prepare financial statements, income projections, and other documents that may be necessary for completing a tax return.
Negotiate with tax authorities to settle disputes or reduce available penalties.
Manage a portfolio of clients and ensure that all their tax needs are met in a timely manner.
Remain knowledgeable of new tax legislation, rulings, and regulations.

Skills and Competencies to Have

Knowledge of federal, state and local tax laws
Understanding of Generally Accepted Accounting Principles (GAAP)
Excellent mathematical and analytical ability
Detail-oriented with strong organizational skills
Ability to interpret and explain tax regulations
Ability to identify and resolve discrepancies
Excellent communication and interpersonal skills
Knowledge of computerized tax preparation software
Ability to multitask and meet deadlines
Ability to work independently

Auditing is a critical job in any field, particularly in the area of taxation. Tax auditors are tasked with the responsibility of reviewing financial records and ensuring that taxpayers are accurately reporting their income and paying the correct amount of taxes. To succeed in this role, having a wide range of skills is essential, but the most important skill for any tax auditor is attention to detail.

A tax auditor must have a keen eye for detail in order to review all documents accurately and spot any errors or irregularities, as any incorrect information could lead to problems for both the taxpayer and the government. a tax auditor must have excellent analytical and research skills in order to properly interpret financial data and apply the relevant tax regulations. Finally, tax auditors must have strong communication skills in order to effectively explain the audit process to taxpayers and address any questions or concerns they may have.

With these core skills, a tax auditor will be able to conduct thorough and accurate audits, helping ensure that individuals and businesses are paying their fair share of taxes.

Senior Operational Risk Management Auditor, Cost Auditor, and Risk Management Auditor are related jobs you may like.

Frequent Interview Questions

What experience do you have conducting tax audits?
Describe a complex tax audit you have conducted in the past.
How do you interpret tax laws and regulations when determining audit procedures?
What strategies do you employ to ensure that taxpayers are compliant with regulations?
What is your experience with utilizing computerized auditing software?
How do you handle difficult or hostile taxpayers?
What processes do you use to ensure accuracy and completeness of your audit results?
Describe the most challenging audit you have ever completed.
How do you research and evaluate new tax laws and regulations?
How do you develop audit strategies to maximize effectiveness?

Common Tools in Industry

Tax Preparer Software. This software helps tax auditors prepare their tax returns in a timely and accurate manner. (eg: TurboTax)
Tax Compliance Software. This software helps tax auditors ensure that their clients are in compliance with all applicable tax laws. (eg: Avalara Compliance Cloud)
Tax Research Software. This software helps tax auditors research and analyze tax law information to make informed decisions. (eg: BNA Tax & Accounting)
Tax Planning Software. This software helps tax auditors plan and optimize their clients' tax strategies. (eg: H&R Block Tax Software)
Audit Management Software. This software helps tax auditors manage their audits and review audit findings efficiently. (eg: ACL GRC)
Document Management Software. This software helps tax auditors organize and store financial documents securely. (eg: Document Management System)
Data Analysis Software. This software helps tax auditors analyze financial data to identify potential errors or fraud. (eg: Tableau)
Financial Modeling Software. This software helps tax auditors create financial models to forecast future performance. (eg: SPSS Modeler)

Professional Organizations to Know

American Institute of Certified Public Accountants (AICPA)
National Association of Tax Professionals (NATP)
Association of Taxation Technicians (ATT)
Association of Chartered Certified Accountants (ACCA)
Chartered Institute of Taxation (CIOT)
Society of Tax Professionals (STP)
International Tax Professionals Association (ITPA)
Federation of Tax Administrators (FTA)
American Society of Tax Problem Solvers (ASTPS)
National Society of Accountants (NSA)

We also have Senior Auditor, Corporate Auditor, and Health Care Compliance Auditor jobs reports.

Common Important Terms

Tax Return. A tax return is a document filed with a tax authority by an individual or business that details their income, expenses, and other pertinent information used to calculate their taxes due.
Tax Law. Tax law is the legal code governing taxation, including statutes, regulations, and judicial decisions.
Tax Evasion. Tax evasion is the illegal act of avoiding or underpaying taxes by not reporting income, claiming false deductions, or hiding assets or cash.
Tax Deduction. A tax deduction is a deduction from taxable income that reduces the amount of taxes owed.
Tax Credits. A tax credit is a dollar-for-dollar reduction in the amount of taxes owed to the government.
Tax Liability. Tax liability is the total amount of taxes owed to the government by an individual or business.
Tax Audits. A tax audit is an official review of an individual or business's financial records and tax filings to ensure accuracy and compliance with tax laws.

Frequently Asked Questions

What is a Tax Auditor?

A Tax Auditor is an individual who is responsible for verifying that taxes are properly and accurately reported and paid. They review records such as financial statements, bank accounts, and other documents to ensure compliance with taxation laws and regulations.

What qualifications do I need to become a Tax Auditor?

To become a Tax Auditor, you will typically need a Bachelor's degree in accounting, finance, or a related field. You will also need to have a good understanding of taxation laws and regulations, as well as proficiency in using accounting software.

How long does it take to become a Tax Auditor?

It usually takes between 3-5 years to become a Tax Auditor. This includes the time it takes to obtain the necessary qualifications and to gain experience in the field.

What are the responsibilities of a Tax Auditor?

The responsibilities of a Tax Auditor include reviewing financial records, preparing audit reports, and providing recommendations for improvement. They must also ensure compliance with all applicable taxation laws and regulations.

What is the average salary for a Tax Auditor?

The average salary for a Tax Auditor is around $60,000 per year. This can vary depending on experience, qualifications, and location.

Web Resources

tax auditor | Wex | US Law | LII / Legal Information Institute www.law.cornell.edu
Tax Auditor, NEW YORK Office - career.arizona.edu career.arizona.edu
State of Arkansas Tax Auditor - Career Services web.saumag.edu