Sampling in Sales and Use Tax Audits

Location of this document: http://willyancey.com/sampling-sut-review.html

Dr. Yancey is the author of Statistical Sampling in Sales and Use Tax Audits, (CCH, 2002),  http://onlinestore.cch.com/default.asp?ProductID=1898

Related Web pages:

• Forensic Economics
• Sampling Design Issues in Sales and Use Tax Audits
• Sampling for Sales and Use Tax Audits ... state-specific references
• Sampling in Financial Audits and Internal Audits
• Sampling for Income Tax
• Sampling for Medicare and Other Claims
• Sampling Theory
• Statistical Education and Software
• Statistical Evidence in Litigation
• Taxsites.com - State and Local Tax page
• Will Yancey's Home Page

This bibliography lists review articles and books that discuss the application of sampling in sales and use tax audits.  Some articles discuss exemption certificates, audit methods, mark-up methods, records availability, and other issues related to sampling in sales and use tax audits. Citations to state tax law, cases, and administrative guidance related to audit sampling are at willyancey.com/sampling.htm

References on this web site will be updated occasionally.  Please e-mail your suggestions for additions and changes to will@willyancey.com

Disclaimer: Inclusion in this list does not imply the reference is or was a reliable authority or relevant to any particular set of facts.  Omission from this list does not imply the item was not reliable.

Sales and Use Tax Audit - Articles and Books

• Adams, Virginia N., and Kirk Johnson, "Increasing Auditor Productivity Through Automated Statistical Sampling of Taxpayer Records," Federation of Tax Administrators Workshop on Revenue Administration, Washington, DC, 1988.
• Adams, Virginia N., and Kirk Johnson, "Automating Statistical Sampling of Taxpayer Records," Federation of Tax Administrators Workshop on Tax Administration, Washington, DC, 1989.
• American Bar Association, Sales and Use Desk Handbook , 2000-2001 Edition, (ABA, 2000).
• Andrews, Thomas F., and Dennis Fox, "Advanced Sampling Issues in Sales and Use Tax Audits," presentation at Institute of Property Taxation Sales Tax Symposium, September 30, 1996.
• Andrews, Thomas F., and William F. Yancey, "Facts, Not Fiction: How Statistical Sampling Should Really Work!" presentation to Committee on State Taxation (COST) Sales Tax Conference, San Antonio, Texas, February 23-25, 1998.
• Andrews, Thomas F., and William F. Yancey, "Statistical Sampling: Practical Issues Explained for the Non-Statistician" presentation at Paul J. Hartman State and Local Tax Forum, Nashville, Tennessee, October 22-23, 1998.
• Arnold, James B., "An Audit Manager's Guide to Reclaiming Sales Tax & Monitoring Compliance,"  presentation at World Research Group Tax Audit Defense and Business Incentives Conference, Phoenix, Arizona, November 27, 2001.
• Barton, Barbara, and Susan P. Schaefer, "Pitfalls to Watch for in Sampling for Sales/Use Tax Audits!", presentation at Institute of Property Taxation Sales Tax Symposium, September 1999; reprinted in IPT Sales Tax Report, November 1999, pp. 1 and following.
• Boucher, Karen J., and Karen Nakamura, "Managing Sales and Use Tax Compliance and Administration with Self-audits and Managed Compliance agreements", 31 The Tax Adviser 424 (June 2000).
• Bright, Joseph C., Jr., Joseph B. Kadane, and Daniel S. Nagin, "Statistical Sampling in Tax Audits", 13 Law & Social Inquiry 305 (Spring 1988).
• Buehler, Dave, "Reverse Audits Can Turn Tide Against State, But Beware of Backlash Offsets, Skeletons," 13 Sales and Use Tax Alert, no. 18, (October 15, 2003).
• Buehler, Dave, "Commissioner Etiquette:  Dos and Don'ts in Dealing with Revenue Departments," 14 Sales and Use Tax Alert, no. 6, (April 1, 2004).
  
• Connolly, Barbara A., "Audits", Institute for Professionals in Taxation 1997 Sales and Use Tax Symposium, Dallas, Texas, September 30, 1997, section labeled "Audits".
• Cummings, Rocky B, "Too Much Information", Journal of State Taxation (November - December 2007), pp. 13 - 15. www.tax.cchgroup.com/images/FOT/Cummings_JSTA_26-01_07.pdf
• Davis, Daniel M., Multistate Guide to Sales and Use Tax Audits, (Aspen Publishers, 2001).
• DeRito, Douglas J., Mary Jane Egr, and Tiffany L. Westmoreland, "Coping with Compliance and Audits and Compliance in the Twenty-First Century", presentation at New York University Institute on State and Local Taxation, New York City, December 3-4, 1998.  Reprinted in IPT Sales Tax Report , January-February 1999, pp. 2-11.
• Dillon, Michael, "State Sales Tax Liquor Audits of the Bar and Restaurant Industry: An Overview of State Efforts and Common Issues", 24 Journal of State Taxation 25 (September-October 2006).
• Dobbins, Britt, and Wendy Leonard, "Compliance Strategies Regarding Resale and Other Sales Tax Exemption Certificates",  12 Journal of Multistate Taxation and Incentives 14 (February 2003).
• Due, John F., "Trends in State Sales Tax Audit Selection Since 1960," 38 National Tax Journal 235, (June 1985).
  
• Due, John F., and John L. Mikesell, Sales Taxation: State and Local Structure and Administration, 2nd edition (Urban Institute Press, 1995). (Chapter 9 contains a survey of the states' sales tax audit programs.)
• Edwards, Terry, "Sampling in State Tax Audits: How Do They Do It?", Texas Society of CPAs, Texas State Tax Conference, Houston, October 31, 2003.
  
• Egr, Mary Jane, Joe B. Huddleston, and Tiffany S. Westmoreland, "All Cases Begin at the Audit Level", presentation at New York University Institute on State and Local Taxation, New York City, December 2-3, 1999.  Reprinted in IPT Sales Tax Report, December 1999, pp. 1, 4-12.
• Ehler, Anthony L., and Richard E. Lanza, "Audits, Appeals & Litigation", presentation in Institute for Professionals in Taxation 2000 Sales & Use Tax Symposium, Kansas City, Missouri, September 26, 2000, pp. 75-81.
• Faber, Peter, "Litigating a State or Local Tax Case," 14 Journal of State Taxation 43 (1995).
• Falk, Eric, and Wendy Rotz, "Stratified Sampling for Sales and Use Tax Highly Skewed Data - Determination of the Certainty Stratum Cut-off Amount", Proceedings of the American Statistical Association Section on Statistical Computing, (August 2003).
• Falk, Eric, Joomi Kim, and Wendy Rotz, "Minimum Sample Sizes with Rare Events in Stratified Designs", 2004 Proceedings of the American Statistical Association Section on Business & Economics Statistics 1174, (JSM 2004).
• Federation of Tax Administrators Task Force on EDI Audit and Legal Issues for Tax Administration, Model Recordkeeping and Retention Regulation, (March 1996),  www.taxadmin.org/fta/modelreg.pdf
• Federation of Tax Administrators Task Force on EDI Audit and Legal Issues for Tax Administration, Auditing Electronic Data, (January 1997), www.taxadmin.org/fta/ediaudit.pdf
• Federation of Tax Administrators Task Force on EDI Audit and Legal Issues for Tax Administration, Procurement Cards and Tax Compliance: Bridging the Gap, (June 1997), www.taxadmin.org/fta/pcards.pdf
• Federation of Tax Administrators Task Force on EDI Audit and Legal Issues for Tax Administration, Evaluated Receipts Settlement (ERS) and Tax Compliance, (September 1998),  www.taxadmin.org/fta/ers.pdf
• Federation of Tax Administrators Task Force on EDI Audit and Legal Issues for Tax Administration,  Sales and Use Tax Compliance Agreements, (March 2000), reprinted in 52 Tax Executive 120 (March/April 2000), www.taxadmin.org/fta/SUTCA.pdf
• Federation of Tax Administrators Task Force on EDI Audit and Legal Issues for Tax Administration,  Appendix B, Sales and Use Tax Compliance Agreements, Survey of State Practices, (updated January 2004), www.taxadmin.org/fta/pub/SUTCA2004.pdf
• Federation of Tax Administrators Task Force on EDI Audit and Legal Issues for Tax Administration, Model Direct Payment Permit Regulation, (June 2000),  www.taxadmin.org/fta/DPay.pdf
• Federation of Tax Administrators Task Force on EDI Audit and Legal Issues for Tax Administration, Direct Payment Permits: Requirements, Restrictions, Revocation, (updated January 2004),  www.taxadmin.org/fta/pub/DPay2004.pdf
• Federation of Tax Administrators Task Force on EDI Audit and Legal Issues for Tax Administration, Sampling for Sales and Use Tax Compliance, (December 2002), www.taxadmin.org/fta/pub/sample.pdf
• Federation of Tax Administrators Task Force on EDI Audit and Legal Issues for Tax Administration, Appendix A: Survey of State Sampling Practices, (updated January 2004), www.taxadmin.org/fta/pub/Samp2004.pdf
• FTA plans to update the survey of state sampling practices. The updated survey results may be publicly available by the end of 2007.
• Fields, Robert J., Understanding and Managing Sales and Use Tax Audits, Sixth Edition, (CCH, 2004), http://onlinestore.cch.com/default.asp?ProductID=2715. [Chapter 7 discusses audits and sampling issues.]
• Fields, Robert J., "Where Tax Technology Can Go Wrong: Practical Advice For Avoiding Some Common Pitfalls",  BNA Multstate Tax Report (July 2003), reprinted in BNA Weekly State Tax Report (June 20, 2003) and IPT Sales Tax Report (September 2003).
  
• Fournier, L. and William Raabe, "Statistical Sampling Methods in State Tax Audits", 2 Journal of State Taxation 115 (1983).
  
• Galloway, John W., and David H. Machlan, "New Wave Audit Methodologies", Institute for Professionals in Taxation 1997 Annual Conference, Orlando, Florida, June 30, 1997.
• Gavenda, Maryann, "Statistical Versus Non-statistical Sampling in Sales and Use Tax Audits," 20 Journal of State Taxation 65 (Summer 2001).
• Gorrissen, Jeanne E., State Tax Audit and Collection Procedures: General Principles, Tax Management Multistate Tax Portfolio No. 1720 (BNA, revised 2002).
  
• Greene, Jeffrey A., Roberts O'Brad, and Stacie E. Taylor, "Audit Issues & Sampling," presentation in Institute for Professionals in Taxation 2001 Sales & Use Tax Symposium, San Antonio, Texas, October 2, 2001, pp. 279-287.
• Greenstein, Russell, and Lisa Tilis, "Statistical Sampling in Sales and Use Tax Audits," In Matthew N. Murray and William F. Fox, editors, The Sales Tax in the 21st Century, (Praeger Publishers, 1997), pp. 166-174. Reprinted in 12 State Tax Notes 861 ( March, 17, 1997).  Reprinted in 43 National Public Accountant 26 (October 1998).
• Healy, John C., Surviving a Sales and Use Tax Audit, (CCH, 2002), http://onlinestore.cch.com/default.asp?ProductID=1897
• Heintz, James A., and John M. Wendt, "Improved Use Tax Auditing Through Sampling", 25 Government Accountants Journal 62 (Summer 1976).
• International Fuel Tax Association (IFTA), IFTA Best Practices Audit Guide, (IFTA, 2006), http://www.iftach.org/committee/ac/downloadfile.php?id=526 . Pages 22-27 and 33 discuss sampling issues for IFTA audits.
• Jandrain, James G., Sales and Use Taxes, (AICPA, 1996).
• Jennings, Harold A., "Statististical Sampling," Institute for Professionals in Taxation 2002 Sales & Use Tax Academy, Washington, DC, April 14-17, 2002.
  
• Kasner, Kyle B., Susan Schaefer, and Lee A. Zoeller, "Statistical Sampling Technology - Making Your Case in a Paper or Paperless Environment," Tax Executives Institute Advanced Technology Seminar, Irving, Texas, (May 19, 1998).
• Kent, Margaret, "Know Your Auditor A Psychological Guide for the State Tax Manager", 14 State Tax Notes 629 (February 23, 1998).
• Kisscorni, Edward S., "Reverse Sales and Use Tax Audits", 30 The Tax Adviser 638 (September 1999).
• Kozub, Robert M., James T. Collins, and John C. Healy, Sales and Use Tax Answer Book, (Panel Publishers, A Division of Aspen Publishers, Inc., First edition, 2001;  Second edition, 2002) [Chapter 15 is on examinations, investigations, and sampling.]
• Larscheid, George, Survey on Sampling in Field Audits , (Wisconsin Department of Revenue, 1996). [Survey responses from 45 states on their use of sampling in sales and use tax audits.]
• Leonard, Wendy, "Collecting and Managing Exemption Certificates", 106(1) Business Credit 26 (January 2004).
• Leong, "Sales and Use Tax Audit Techniques and Procedures Employed for Retailers," 3 Journal of State Taxation 129 (Summer 1984).
  
• Leib, H., "Using Sampling Techniques to Assess State Taxes," 3 Journal of State Taxation (1985).
• Loftus, James T., and Thomas E. Vermeer, "Technology, Fraud Auditing, and Liquor", 4 Journal of Forensic Accounting 307, (2003). [Use of data mining and sampling in Maryland alcoholic beverage tax audits.]
• Matulich, Diane J., and Roger C. Pfaffenberger, "Sampling: Your Worst Nightmare", Institute for Professionals in Taxation 2003 Annual Conference, Scottsdale, Arizona, June 23, 2003.
• McCoid, Allan H., "The Admissibility of Sample Data Into a Court of Law: Some Further Thoughts," 4 UCLA Law Review 233 (1957).  Commentary on Sprowls article in same journal.
• McGoff, Peggy, "En Garde! Statistical Sampling A Double-edged Sword," 8 Sales and Use Tax Alert, no. 2, pp. 1-3 (February 1998).
• McGoff, Peggy, "Tax Preparation the Key to Lower Audit Assessments", 10 Sales and Use Tax Alert, no. 17, pp. 1-3 (December 15, 1998).
• McGoff, Peggy, "Sampling: Influencing the Outcome of an Audit", 11 Sales and Use Tax Alert, no. 8, pp. 1-4 (May 1, 2001).
• McGoff, Peggy, "Changes to California Audit Manual Will Effect Many," 12 Sales and Use Tax Alert, no. 1, pp. 5 and 8 (January 15, 2002).
  
• Mucke, Christopher A., and David M. Smith, "Sales and Use Tax Optional Reporting Methodology", 31 The Tax Adviser330 (May 2000).
• Mulrow, Jeri M., "Statistical Sampling as a Win-Win in Tax Audits," 15 State Tax Notes 1491 (December 7, 1998).
• Mulrow, Jeri and Eric Falk, "What's the Risk Due to Sampling in Tax Audits and Planning?", 90 Tax Notes 939 (February 12, 2001).
• Mulrow, Jeri and Eric Falk, "What's the Risk Due to Sampling in Tax Audits and Planning?"  20 State Tax Notes (January 22, 2001).
• Mulrow, Jeri M., and Stacie Taylor, "Introduction to Statistical Sampling", presentation in Institute for Professionals in Taxation 2000 Sales & Use Tax Symposium, Kansas City, Missouri, September 25, 2000, pp. 83-97.  Repeated in Institute for Professionals in Taxation 2001 Sales & Use Tax Symposium, San Antonio, Texas, October 1, 2001, pp. 103-117.
• Multistate Tax Commission Joint Audit Program, Non-statistical Sampling Training Course, (March 2000).
• Multistate Tax Commission Joint Audit Program, Basic Statistical Sampling Training Course, (2000).
• Murray, Matthew N., "Sales Tax Compliance and Audit Selection," 48 National Tax Journal 515 (December 1995).
• Naghavi, Faranak, Jeri Mulrow, and Eric Falk, "Reverse Sales and Use Tax Audits and Statistical Sampling: A Double Benefit", 11(10) Journal of Multistate Taxation and Incentives 18 (February 2002).
  
• Nelson, Bruce M., "State and Local Audit Selection, Strategies, and Tactics", 9 Journal of Multistate Taxation and Incentives (May 1999).
• Nugent, Joseph J, Michael J. Wojciechowicz, and John C. Healy, "Challenging the Sales And Use Tax Audit", 2 Journal of Multistate Taxation and Incentives (March/April 1992).
• Pearson, Dorothy, and Keith Simeral, "Sampling and Technology", Institute for Professionals in Taxation 1998 Sales and Use Tax Symposium, Orlando, Florida, September 28, 1998.
• Pfaffenberger, Roger C., "Statistical Sampling: Policy Issues", Institute for Professionals in Taxation 2002 Sales & Use Tax Academy, Washington, DC, April 14-17, 2002.
• Rotz, Wendy, Eric Falk, Ryan Petska, and Jinhee Yang, "PPS vs. Stratified Sampling in Modern Audits", Proceedings of the American Statistical Association Section on Survey Research Methods, (August 2002).
• Ryan, G. Brint, "Sales & Use Tax Audit and Compliance Methodologies in the '90s", Institute for Professionals in Taxation 1997 Sales and Use Tax Symposium, Dallas, Texas, September 30, 1997, section labeled "Audits".
• Pfaffenberger, Roger C., and Stacie E. Taylor, "Sampling Theory", Institute for Professionals in Taxation 2002 Sales and Use Tax Symposium, Monterey, California, October 1, 2002.
• Rotz, Wendy, Eric Falk, Ryan Petska, and Steve Miller, "Combined PPS and Stratified Sampling in Modern Tax Audits", 2004 Proceedings of the American Statistical Association Section on Business & Economics Statistics 1310, (JSM 2004).
• Ryan, G. Brint, and Roger C. Pfaffenberger, "Advanced Sampling", Institute for Professionals in Taxation 2001 Sales & Use Tax Symposium , San Antonio, Texas, October 1, 2001, pp. 59-73.
• Sampogna, Mike, "Bargain Hard For An Audit Sample That Favors You," Sales & Use Tax Monitor, Strafford Publications, May 31, 2003, pp. 1 and 11.
• Solomon, Herbert, "Confidence Intervals in Legal Settings," In Morris H. DeGroot, Stephen E. Fienberg, and Joseph B. Kadane, editors, Statistics and the Law, (Wiley, 1986, reprinted 1994), pp. 457-458 has Solomon's summary of Sprowls (1957).
• Sprowls, R. Clay, "The Admissibility of Sample Data Into a Court of Law," 4 UCLA Law Review 222 (1957).
• Stokes, Lynne, "Estimating the Size of a Subdomain: An Application in Auditing", 8 Journal of Business and Economics Statistics 337 (July 1990).
• Wilson, Bob, "On Audit, Details Are Key to E-tailer Record Retrieval," 3 E-Commerce Tax Alert issue 10, page 1 (October 2002).
  
• Yancey, Will, "Sampling Design Issues in Sales and Use Tax Audits", revised 2000, willyancey.com/sampling-design.htm
• Yancey, Will, "Sampling Leverage Example", revised 2000, willyancey.com/leverage.xls
• Yancey, Will, Statistical Sampling in Sales and Use Tax Audits, (CCH, 2002),  http://onlinestore.cch.com/default.asp?ProductID=1898
• Yancey, Will, "Statistical Sampling in Sales and Use Tax Audits", 12 Sales and Use Tax Alert, no. 10, insert (June 1, 2002).
• Yancey, Will, and Roger C. Pfaffenberger, "Use and Abuse of Sampling in Sales and Use Tax Audits," 97 COST State Tax Report , Issue 6, pp. 2-9, (November 1997). Reprint in 13 State Tax Notes 1673 (December 29, 1997), and Tax Analysts electronic database at 97 STN 250-17, willyancey.com/sampling-cost97.htm
• Yancey, Will, "Sampling in Sales and Use Tax Audits", IPT Sales Tax Report, July-August 1999, pp. 1-2, willyancey.com/sampling-iptaward.html
• Yancey, Will, and Tony Chirico, "Advanced Statistical Sampling", presentation in Institute for Professionals in Taxation 2000 Sales & Use Tax Symposium , Kansas City, Missouri, September 25, 2000, pp. 61-73.
• Yancey, Will, Tom Andrews, and Tony Chirico, "Multi-state Statistical and Nonstatistical Sampling: New Trends", presentation in Institute for Professionals in Taxation 2000 Sales & Use Tax Symposium, Kansas City, Missouri, September 27, 2000, pp. 339-348.
• Zoeller, Lee A., "Statistical Sampling Technology: Making Your Tax Case in a Paper or Paperless Environment," presentation at Tax Executives Institute, Advanced Technology Seminar, Irving, Texas, May 19, 1998.
• Zoeller, Lee A., "State Approaches to Sampling in Audits and the Available Taxpayer Responses", Council on State Taxation (COST), Sales Tax Conference, New Orleans, February 25, 2004.
  

Sampling in Other Areas

• For general references on statistical sampling, see willyancey.com/statistics.htm
• For references on sampling evidence in litigation, see willyancey.com/statistical_evidence.htm
• For references on sampling for financial audits and internal audits, see willyancey.com/sampling-financial.htm
• For references on sampling for Medicare and other claims, see willyancey.com/sampling-claims.html
• For references on sampling for valuation, see willyancey.com/sampling-valuation.html

Maintained by Will Yancey. Please e-mail any comments or suggestions to will@willyancey.com