(A) Reasons for reviewing the taxpayer file: i. To obtain Information on the taxpayer’s activity, the taxpayer’s industry, and commercial issues affecting the taxpayer’s industry (e.g., commercial information and statistics). ii. To determine the financial performance of the taxpayer, including profitability (e.g., annual accounts). iii. To determine if there are any related and/or associated party of taxpayers; iv. Summary of tax compliance record, including copies of tax returns v. Note prior difficulties encountered in dealings with the taxpayer including any outstanding issues from prior audit; vi. Third party information held on file.

(Bi). Prior audit report helps identify prior year adjustments which may be applicable to the current years ii. it also helps determine the extent of the audit scope. For example, if the sales factor numerator was extensively tested in prior years and no adjustments resulted, it might be possible to minimize the testing in the current years if business operations have not changed. iii. Also, if an audit adjustment was made in prior years, the auditor may be able to use the factual development from the prior audit as a roadmap to streamline the verification of current year facts by directing the auditor’s focus to the key areas. iv. Prior audit reports can help to streamline the audit process and avoid duplication of efforts between audit cycles

(C) Refusal of a taxpayer to provide records. b) Refusal of a taxpayer to sign a waiver. c) Statements by the taxpayer that they intend to contact a Minister of Finance or want to take court action to stop the audit d) Threats made by a taxpayer. e) Possible fraud f) Any event that might critically jeopardize the state’s interest.