MTC Income Tax Audit Manual DRAFT vIII

Income & Franchise Tax Audit Manual Rev. June 2010 Multistate Tax Commission 444 North Capitol Street, N.W., Suite 425 Washington, D.C. 20001 Telephone: 202-624-8699 Website: www.mtc.gov [This page intentionally left blank] MTC Income & Franchise Tax Manual June 2010 PUBLIC DRAFT Page 2 of 100 Multistate Tax Commission Income & Franchise Tax Audit Manual Table of Contents Chapter Title Page 1..............Introduction ..................................................................................4 2..............Terms and Definitions..................................................................5 3..............Pre-Audit Procedures ...................................................................8 4..............Statutes of Limitation & Waivers ..............................................10 5..............Working with Taxpayers ............................................................12 6..............Nexus .........................................................................................16 7..............Unitary Investigation .................................................................24 8..............Computation of Income .............................................................43 9..............State Adjustments ......................................................................52 10............Business & Non-Business ...