The process of developing a detailed, specific interview plan was found to be a necessity at the inception of each audit. Sometimes follow-up interviews were needed, as taxpayers altered their testimony when confronted with examination findings. The quality of your initial observations and questioning will affect the overall quality and success of the entire examination, whether or not you have developed third party information or noted other items indicative of non-compliance in your precontact analysis of the returns. The purpose of your interview is to secure from the taxpayer a general financial picture and familiarize yourself with the business operations and recordkeeping practices. After the interview, you should be in a position to see if the income bears an appropriate relationship to the taxpayer's standard of living.
Planning is essential to the success of the interview.
The interview should be planned in advance, keeping in mind your objectives and the results of your pre-contact analysis and your understanding of how this industry should work. If a questionnaire is used, it should be written specifically for the case in hand. The completed document should be a flexible guideline that will assist but not restrict your interview. Your questioning must be thorough and specific and the responses accurately and completely recorded. State questions simply and be certain that they are understood, repeating, and rephrasing if necessary to be sure that the answers are complete and responsive.