Since the beginning of the pandemic, Minnesota’s nexus waiver policy provided that the state will not assert nexus for business income tax or for sales and use tax purposes “solely because an employee is temporarily working from home due to the COVID-19 pandemic.”
Tax Disputes & Litigation
Our tax controversy attorneys come from a variety of backgrounds, including experience as government counsel, public accounting, and tax court clerkships.
Read Masha Yevzelman’s Tax Notes State article “Minnesota Data Center Exemption: DOR’s Revised Guidance Shows Progress”
What We Do
Our team of skilled attorneys provides experienced, effective representation in preparation for and throughout the tax controversy process. We offer full‑service representation on a multistate basis, and at all stages of the tax controversy process:
- Agency examination and audit
- Agency administrative appeals and hearings
- Tax tribunal hearings and trials
- Trial court
- Appellate court
- Tax process evaluation and automation
- Taxability research and determinations
- Tax refund review and claim preparation
- Tax exposure analysis and mitigation (i.e., voluntary disclosure agreements)
Frequently, our early involvement at the examination or protest stages permits us to help the taxpayer marshal the critical underlying facts and to define the arguments most likely to prevail. In addition, we bring the benefits of attorney‑client confidentiality and privilege to the controversy.
When litigation is advisable or necessary, we draw upon our trial experience to choose the appropriate court, develop the case through formal and informal discovery, and aggressively advocate the taxpayer’s position before the judge or jury. Our tax litigators have extensive experience in federal district courts, the United States Tax Court, the Minnesota Tax Court, the Wisconsin Tax Appeals Commission, State District Courts, the Eighth Circuit Court of Appeals, the Minnesota Supreme Court, the North Dakota Supreme Court, and the Minnesota Court of Appeals. We know tax law, but more importantly, we have the experienced advocate’s ability to develop and present the most persuasive arguments and themes.
Throughout our representation, we strive to obtain fair and thoughtful review of the dispute to achieve the best possible result for our client at the earliest opportunity.
We represent publicly owned and privately held corporations, partnerships, cooperatives, individuals and fiduciaries in tax disputes and litigation of all types against State and Federal taxing authorities. Our clients are well-recognized national, regional and local businesses. We regularly negotiate and litigate tax disputes involving corporate and personal income taxes, sales and use taxes, excise taxes, estate and gift taxes, employment taxes, property taxes, and healthcare provider taxes.
- Phone Recovery Services, LLC v. Qwest Corp et al., 919 N.W.2d 315 (Minn. 2018) (holding that Minnesota’s qui tam statute prohibits qui tam actions relating to fees and charges for 911 services because such fees and charges are “taxes”).
- Connexus Energy, et al. v. Commissioner of Revenue, 868 N.W.2d 234 (Minn. 2015) (prevailing on the argument that the two-year statute of limitations applies to refunds paid by the Commissioner to taxpayers and later determined to have been paid in error).
- SAP Retail, Inc. v. Commissioner of Revenue, Docket No. 8345-R (Minn. T.C. Sep. 19, 2013) (represented an intervenor in SAP Retail’s appeal involving taxability of software implementation services, which the tax court agreed were not part of the “sales price” of software).
- Northern X-Ray Company v. Commissioner of Revenue, Docket No. 7945-R (Minn. T.C. Dec. 8, 2009) (holding that material credits received from manufacturers are not part of the gross receipts from the retail sales of x-ray film).
- Ticketmaster, LLC v. Commissioner of Revenue, Docket No. 7866-R (Minn. T. C. Mar. 6, 2008) (convinced the tax court that Ticketmaster’s convenience charges and processing fees were not subject to the Minneapolis Entertainment Tax).
- Sprint Spectrum LP, et al. v. Commissioner of Revenue, 676 N.W.2d 656 (Minn. 2004) (Minn. Sales/Use Tax . . . telecommunications equipment, which produces telecommunication signals that have physical properties, is exempt from sales tax as capital equipment because it is used to manufacture tangible personal property).
- Bailey Nurseries v. Commissioner of Revenue, 2002 WL 1077273 (Minn. Tax), Docket No. 7255-R (May 16, 2002) (Minn. Sales/Use Tax . . . machinery and equipment for preparing soil, cultivating, harvesting and irrigating purposes, purchased by the taxpayer for use in its wholesale shrub nursery business were entitled to “farm machinery” tax rate).
- St. Paul Abrasives, Inc., et al. v. Commissioner of Revenue, 1998 WL 726457 (Minn. Tax), Docket Nos. 6814-6817 (October 12, 1998) (Minn. Sales Tax . . . taxpayers, who ran an abrasives supply business, not liable for sales/use tax on purchase of incentive items they provided to customers in a trading stamp-like redemption program, since the purchases were for resale in other states where customers redeemed their incentive points).
- Northern States Power Company and United Power Association v. Commissioner of Revenue, 571 N.W. 2d 573 (Minn. 1997) (Minnesota sales tax exemption for capital equipment held to apply to electrical transformers located outside the power plant).
- Dahlberg Hearing Systems, Inc. v. Commissioner of Revenue, 546 N.W.2d 739 (Minn. 1996) (Minn. Use Tax . . . computers destined for business use in other states not subject to Minnesota use tax simply because software was loaded at company’s Minnesota headquarters).
- Northern X-Ray Company v. Tax Commissioner, 542 N.W.2d 733 (North Dakota 1996) (defense of North Dakota contractor’s use tax claims).
- Copy Duplicating Products Inc. v. Commissioner of Revenue, Minn. Tax Court, Docket No. 6378 (July 10, 1995) (Minn. Sales Tax . . . copiers purchased by copier leasing company free of sales tax as sales for resale continued to be sold for resale when they were converted to coin-operated use because the “license to use” sold by the company to its coin-operation customers was also a resale).
- Burlington Northern Railroad Company v. Commissioner, 509 N.W. 2d 551 (Minn. 1993) (Minnesota sales tax attempted to be imposed on railroad rolling stock was held invalid under the Railroad Revitalization and Regulatory Reform Act of 1976).
Minnesota Corporate Income Tax
- General Mills, Inc. v. Commissioner of Revenue, 931 N.W.2d 791 (Minn. 2019) (finding that to calculate the Minnesota research and development credit (a) the federal minimum base amount was part of the calculation and (b) that federal gross receipts should be used to determine the denominator of the fixed-base percentage of the base amount).
- Alaska Airlines, Inc. v. Commissioner of Revenue, No. 9433-R (Minn. T.C. Mar. 16, 2022) (holding that the Minnesota Minimum Fee’s inclusion of Minnesota sales or receipts for airlines is preempted by the federal Anti-Head Tax Act, 49 U.S.C. § 40116, which prohibits states from taxing the gross receipts of airlines).
- Amoco Corporation and Affiliates v. Commissioner of Revenue, 658 N.W.2d 859 (Minn. 2003) (Minn. Corporate Income Tax . . . exploration and production operations of integrated oil company held not unitary with refining and marketing operations, under statutory definition of unitary business).
- Green Giant v. Commissioner of Revenue, 534 N.W.2d 710 (Minn. 1995) (Minn. Corporate Income Tax . . . income assigned to corporation jointly owned by Green Giant and Alaskan Native Corporation should be excluded from the tax computation).
Minnesota Individual Income Tax
- Zauhar v. Commissioner of Revenue, No. 9139-R (Minn. T.C. Aug. 19, 2020) (holding that the taxpayer was a domiciliary of Florida and not Minnesota even though his wife remained a Minnesota resident).
- Chapman v. Commissioner, 651 N.W. 2d 825 (Minn. 2002) (Minnesota alternative minimum tax provision limiting charitable contribution deductions solely to Minnesota charities declared unconstitutional as discriminatory to interstate commerce).
- Buckrey v. Commissioner, T.C. Memo 2017-138 (complex transferee liability case involving a closely owned corporation’s unpaid taxes and holding that the former shareholders’ liability as transferees was limited by Minnesota law).
- Astleford v. Commissioner, T.C. Memo 2008-12 (gift tax case involving valuation of gifts of interests in a family limited partnership; three tiers of discounts approved by court).
- Xcel Energy Inc. v. United States (D. Minn.) (tax treatment of leveraged company-owned life insurance plan).
- O’Shaughnessy v. Commissioner, 332 F.2d 1125 (8th Cir. 2003) (multi-issue litigation involving inter alia, depreciation, abandonment loss, and change of method of accounting issues for glass manufacturing company).
- Northern States Power Company v. United States, 151 F.3d 876 (8th Cir. 1998) (multi-issue income tax case involving inter alia, placed in service date for nuclear fuel assemblies, and change of method of accounting questions).
- Sprint Communications, Ltd v. Comm’r, 578 N.W.2d 752 (Minn. 1998) (dispute over whether federal telecommunications excise tax that taxpayer collects from its customers should be included in “sales price” and taxed by the Minnesota sales tax).
- Northern States Power Company v. United States, 73 F.3d 764 (8th Cir. 1996) (multi-issue income tax case, including an “interest netting” dispute).
- O’Hagan v. United States, 95-1 USTC 50,082, aff’d, 96-1 USTC 50, 311 (8th Cir. 1996) (injunction action against IRS to restrain levy on homestead).
- O’Shaughnessy v. United States, 517 N.W. 2d 574 (Minn. 1994) (federal tax lien held unenforceable against assets of discretionary trust).
- Landmark v. United States, 25 Cl. Ct. 100 (1992) (first case in the country to hold that cooperatives are not subject to the deduction limitations of I.R.C. § 277).
- Security Bank Minnesota v. Commissioner, 98 T.C. 33 (1992), aff’d, 994 N.W. 2d 432 (8th Cir. 1993) (tax case affecting 40 Midwestern banks, which held that small cash-basis banks were not subject to the interest accrual rules under I.R.C. § 1281).
- Perham Hospital District v. County of Otter Tail, 969 N.W.2d 366 (Minn. 2022) (affirming the Minnesota Tax Court’s opinion that medical clinics owned and operated by Perham Hospital District were exempt from property tax because they were operated to improve and run Perham Hospital—they helped attract physicians and patients, improved the hospital’s overall operations and service delivery, increased patient follow-up, provided physical space for use by other hospital departments).
- Cooperative Power Association v. Hennepin County, Minn. Tax Court, Docket Nos. 20070, 22041 and 24007 (March 20, 1996) (Minn. Property Tax . . . property tax valuation on headquarters of electric power cooperative reduced approx. 32 percent).
- Department Stores and Shopping Centers. We are the leading representative of department stores and major shopping center owners, developers and managers.
- Hotels and Motels. We have cutting-edge experience with the complexities of hotel and motel properties as those issues continue to evolve in national circles, and our clients include a number of national flags.
- Office Buildings. We have unsurpassed experience in the representation of office properties in both the Minneapolis and Saint Paul central business districts and in the suburban office markets.
- Environmentally Contaminated Properties. We are nationally recognized for our knowledge in the negotiation and trial of cases where the market value of the subject property is adversely affected by petroleum derivatives, asbestos, PCBs, landfills, and other forms of contaminants.
- Medical Office Buildings. We have developed considerable expertise in the valuation of medical office buildings, both in the Twin Cities Metropolitan Area and in Greater Minnesota.
- Restaurants. We have extensive experience with the difficult issues in valuing restaurant properties.
- Industrial and Manufacturing Properties. We have considerable experience with large and not-so-large industrial properties, including manufacturing, distribution and headquarters facilities.
- Apartment Buildings. We represent regional and local owners and managers of apartment complexes and properties of all types.
- Office Warehouse and Office Showroom Facilities. We regularly represent the owners and managers of office warehouse and office showroom facilities.
- Bank Properties. We have successfully represented major banks in trial and in negotiations involving branch bank and other bank properties.
News & Articles
May 4, 2022
Under IRC § 6330, a taxpayer is entitled to a “collection due process” (CDP) hearing before the IRS Appeals Office can take any enforced collection action.
April 14, 2022
Join Fredrikson & Byron’s Tax Disputes & Litigation Group for our Inaugural Let’s Talk About Tax – An Annual Sampler event on Wednesday, May 25, 2022.
March 3, 2022
The two most troubling sales tax issues for companies tend to be related to software and direct mail. Direct mail is especially difficult, as there are numerous issues to untangle, and a robust understanding of the facts is critical.
January 20, 2022
Most employers or retirement plan administrators are required to file annual informational returns with the U.S. Department of Labor called Form 5500, Annual Return/Report of Employee Benefit Plan.
December 3, 2021
If you are into Foreign Bank Account Reports (FBARs), your concern about penalties for failing to comply with those FinCEN 114 reporting rules just took an exciting, and perhaps fearsome, turn.
November 11, 2021
For years, remote workers had been complicating state tax compliance for companies. When the U.S. Supreme Court’s decision in Wayfair came out in June 2018, many believed that the decision’s economic nexus standards would reduce complexity surrounding remote workers.
November 4, 2021
With a changing planet and generous federal tax incentives, renewable energy projects are increasing in both number and size. So naturally, states want their fair share of tax revenue.
October 28, 2021
You are moving to another state, but will keep some Minnesota ties (e.g., maintain a house or cabin in Minnesota, spend summers in Minnesota, remain employed by a Minnesota company). Will the Minnesota Department of Revenue agree that you actually moved?
October 15, 2021
Many business owners, especially owners who are thinking of selling their business, wonder if an ESOP is a good ownership transition option for them. The answer is not always easy to determine but an ESOP is something that should be explored.
October 7, 2021
Having spent more than a decade working with taxpayers and Department employees on sales and use tax audits and refund requests, I find that responding to documentation requests from the Department can either be an exercise in pragmatism or an exercise in preventing auditors from murdering a taxpayer’s business by a thousand cuts. The reality is that accumulating and providing documentation is easier for some taxpayers than for others. Similarly, the requirements laid out by some states, or by some auditors, are more burdensome than by others.
October 1, 2021
One of the largest sources of stress for a taxpayer with significant federal tax debts is whether the IRS can take his or her house. For many taxpayers, the family residence is the most important source of their wealth. In addition, it is not just their house, but their home—a source of happiness and joy and family community. The prospect of losing a home therefore not only threatens financial loss, but it is often emotionally taxing as well.
October 1, 2021
In this webinar, we revisit issues and policy questions surrounding Minnesota’s so-called “three-legged stool” and focus on our state’s three revenue workhorses: income tax, sales and use tax, and property tax.
September 23, 2021
By Lynn S. Linné
Many 501(c)(3) organizations receive a property tax statement on a newly acquired property and ask: “As a 501(c)(3) organization, aren’t we exempt from property tax?”
Tax Issues in the Use or Disposition of International Intangibles: The Good, the Bad, and the Ugly (Part I)
September 9, 2021
By Ken Levinson
The transfer or use of intangibles generally is a complicated area of taxation, and one that continues to evolve.
September 3, 2021
As I ask organizations, big and small, what sales and use tax issues cause them the biggest headaches, the answers are overwhelmingly the same – taxability and apportionment of both software and direct mail. I’m going to save direct mail for another day. But for those who are unconcerned about your organization’s treatment of software, I’m here today to read you the riot act.
August 26, 2021
Yes, taxpayers can opt out! While the monthly payments of the enhanced child tax credits, passed last spring by Congress as part of the American Rescue Plan, are helpful to many American families, they could actually create issues for others, with some taxpayers actually owing money to the federal government next year if they were to receive such tax credits now.
August 19, 2021
Companies that hire independent contractors are not obligated to withhold income taxes or employment taxes (such as Social Security and Medicare) or pay the employer share of employment taxes and unemployment insurance. But, just because an employer labels its workers “independent contractors,” as opposed to “employees,” doesn’t make it so.
August 12, 2021
Since 1959, taxpayers have been relying on a federal law—Public Law 86-272—to protect them from having to file state income tax returns in states where the taxpayers’ in-state activities are limited to just soliciting sales of tangible personal property. On August 4, 2021, the Multistate Tax Commission (MTC) member states voted 20-0 to revise the MTC’s “Statement of Information” regarding Public Law 86-272 in an attempt to eviscerate the federal law’s protections.
August 4, 2021
When is a brokerage not a brokerage? According to a recent Private Letter Ruling released by the IRS, the answer might surprise you.
July 29, 2021
Despite the relatively simple mechanics of the distribution and forgiveness of PPP loans, the taxation of both expenses paid for with PPP loan proceeds and forgiveness of the PPP loans has continued to evolve, leaving complicated rules for taxpayers to navigate.
July 20, 2021
Recently, many of our clients have received notices from the county assessor’s office that the county is conducting an “annual review” of their property for assessment purposes. How should you respond to these types of requests? It depends.
July 15, 2021
Last week, we reviewed the basics about captive insurance companies, nonadmitted insurance and the essence of the federal legislation known as the NRRA. This week, we examine what the states did to implement NRRA and how that affected, or may affect, insurance premiums paid to out-of-state captives.
July 8, 2021
We are seeing increased focus by state tax departments on nonadmitted insurance premium reporting, tax payments owed and auditing of captive insurance companies. This article is Part I of our primer on the application of the nonadmitted premium tax rules to purchases of insurance from out-of-state captives.
June 30, 2021
Construction is one of the more unique and fascinating industries when it comes to state tax. When working with clients on either sales and use tax planning or controversy matters, the sales and use tax structure facing contractors frequently prompts a number of unanticipated challenges.
June 24, 2021
A taxpayer with substantial back taxes has a few options to deal with IRS pressure to get them paid, and while an installment agreement can be a good outcome in some cases, there are many pitfalls to avoid when entering into one.
June 16, 2021
If you just filed a property tax appeal for the January 2, 2020 (Pay 2021) tax year, you may have obligations to comply with what is commonly referred to as the “August 1 Rule.”
June 10, 2021
The story can apply directly to issues currently facing Minnesota taxpayers. Said directly, we will have “unpredictable elements” in life. And, while those elements can be insurmountable when surfacing on their own schedule, we can have a positive impact when exercising deliberate foresight.
June 3, 2021
Minnesotans are wondering: could or should they change their residency to achieve income tax savings?
Diamonds are Forever, But I Have a Theory that Roger Moore’s James Bond Killed the Three-Martini Lunch
May 27, 2021
Could the latest amendment to the Tax Cuts and Jobs Act of 2017 mark the return of the “three martini lunch”? Maybe, at least through 2022.
May 25, 2021
Whether it be state tax nexus, federal tax conformity or remote worker issues, the 2021 legislative session has been full of interesting state tax issues. Together with guest speakers from COST, our Fredrikson state tax team recapped several of these multistate issues during this webinar on June 10, 2021.
May 19, 2021
To alleviate burdens on taxpayers and their representatives, the IRS allowed temporary use of electronic signatures for a limited number of tax forms.
May 12, 2021
The process that organizations go through during the preparation, deal, and integration phases of an M&A transaction are fraught with tax issues. Learn how Fredrikson & Byron can help.
FBAR Controversies Continue: Foreign Account Reporting, Compliance Requirements, and Litigation Update
April 8, 2021
Attorneys Ken Levinson and Masha Yevzelman of Fredrikson & Byron’s Tax Disputes & Litigation Group presented this webinar on April 29, 2021.
March 1, 2021
This webinar on March 18, 2021, described how conservation easements function from a real estate perspective, addressed the differences between syndicated conservation easements and non-syndicated conservation easements, and provided an update on how courts have been ruling in conservation easement disputes.
February 16, 2021
Minnesotans whose “home state” is here and who purchase “nonadmitted insurance” directly from insurers not licensed to sell insurance in Minnesota are required to file Form IG255 annually with the Department of Revenue.
January 28, 2021
Fredrikson & Byron’s Kyle Brehm and Kevin Goodno join Rep. Paul Marquart (DFL-Dilworth), House Tax Committee Chair and Rep. Pat Garofalo (R-Farmington), Republican Lead, House Ways & Means Committee for a virtual panel previewing Minnesota Legislative Session Taxing Decisions.
November 23, 2020
On December 10, 2020, speakers from Fredrikson & Byron and RSM discussed a collection of interesting, diverse, and thought-provoking tax issues and events from 2020.
November 17, 2020
The Minnesota Department of Revenue has updated its data center exemption guidance, taking a step in the right direction for purchases of distributed software and required documentation.
November 10, 2020
By Emily M. Chad and John J. Erhart
As of November 9, 2020, owners of partnerships and S corporations in those states allowing pass-through entities to pay state tax at the entity level can deduct those taxes on their federal returns with the U.S. Department of the Treasury’s blessing.
November 3, 2020
On November 12, 2020, members of our Tax Litigation Group addressed the top ten myths about changing your Minnesota residency, including myths such as: there is an all-inclusive binding checklist for changing residency, you can’t keep any MN contacts after you leave, and there is a medical exception to residency.
September 15, 2020
This session explores the considerations sellers should be aware of and discuss some strategies to consider when looking to mitigate state tax risks associated with such discussions.
July 27, 2020
This session evaluates how we got to the current state and focuses on challenges that taxpayers face when evaluating whether they have state tax nexus.
May 19, 2020
With the COVID-19 pandemic continuing to impact businesses within the healthcare industry, the Minnesota Department of Revenue on May 14, 2020, again offered relief to businesses with upcoming MinnesotaCare tax payment obligations.
May 7, 2020
Corporate tax departments are continually being asked to provide more documentation to defend assessments on transactions which are clearly not taxable or oftentimes have already been subject to tax. This session focuses on discussing these issues and preparing for the fight before it shows up at your door.
April 30, 2020
State tax controversy can present daunting strategy issues for taxpayers as well as service providers. This session focuses on preparing for controversy prior to audit division involvement and discusses potential strategies for defending a taxpayer position throughout the agency review phases (both audit and appeal).
April 23, 2020
This webinar provides participants with the knowledge they need to evaluate whether a property tax appeal makes sense for their properties.
April 22, 2020
As social distancing methods and shelter-in-place orders during the COVID-19 pandemic have prompted many across the country to work from home, businesses have begun to wonder about the nexus ramifications of their newly-expanded telecommuting arrangements.
April 16, 2020
Our panelists address taxpayer questions their offices are most frequently asked to respond to as a result of the current environment we are working within.
April 13, 2020
With the COVID-19 pandemic continuing to disrupt business operations, the Minnesota Department of Revenue on April 10, 2020, offered additional relief to those businesses with upcoming MinnesotaCare tax payment obligations.
April 10, 2020
On April 9, 2020, in its latest response to the COVID-19 pandemic, the Minnesota Department of Revenue offered expanded relief for businesses impacted by Emergency Executive Order 20-04. The expanded relief measures extend the payment deadline associated with these returns to May 20, 2020.
April 2, 2020
In light of the COVID-19 crisis, restaurants and businesses have shut down their operations. Tenants are struggling to pay their rent and landlords are left bearing the burden of vacancies and non-payment. Many property owners anticipate this will lead to a decrease in property values, and have already begun asking the question: Should I appeal my property taxes?
Business-Related Tax Changes Made by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act)
March 30, 2020
The CARES Act, signed into law on March 27, 2020, makes important changes to certain key tax provisions for businesses affected by COVID-19.
March 26, 2020
The IRS announced on March 24 that it has indefinitely suspended nearly all functions and services requiring face-to-face contact with taxpayers.
March 23, 2020
The Minnesota Department of Revenue, recognizing that several of the businesses subject to MinnesotaCare Tax have been impacted by the COVID-19 pandemic, announced certain relief measures for businesses who were unable to properly file returns by March 16, 2020.
March 21, 2020
COVID-19 has had innumerable impacts on our daily lives. In response, the IRS and certain local states have provided guidance for taxpayers whose federal income tax returns are due on April 15.
March 19, 2020
Responding to the COVID-19 pandemic, Minnesota Governor Tim Walz issued Emergency Executive Order 20-04 on March 16, 2020.
September 10, 2018
Individuals or companies with undisclosed foreign financial assets or income have until September 28, 2018 to enter the IRS’s Offshore Voluntary Disclosure Program.
June 22, 2018
By Masha M. Yevzelman & Thomas R. Muck
A merchant of goods and services that makes sales in multiple states is no longer required to have physical presence in a state in order to be subject to sales and use tax in that state.
February 6, 2018
In 2015, Congress passed 26 U.S.C. Section 7345, entitled “Revocation or Denial of Passport in Case of Certain Tax Delinquencies.” Although this law was passed in 2015, the IRS did not begin coordinating with the State Department immediately. However, it has announced that it will begin that process in January 2018.
Residency Legislative Alert: Location of Attorney, CPA, Financial Adviser or Bank Account May No Longer Be Considered in Domicile Determinations
May 31, 2017
By Masha M. Yevzelman & Thomas R. Muck
When evaluating whether an individual is a Minnesota resident, the Minnesota Department of Revenue has been considering, among many factors, the location of a person’s attorney, accountant, financial adviser and bank accounts.
January 18, 2017
By Wayne W. Carlson, Michael S. Raum & Elizabeth L. Alvine
No one wants to be audited, whether by the IRS or the state tax authorities. However, there may be instances in which it is important to make sure that you are actually subject to an audit, in order to ensure that your rights are protected.