Wisconsin – Non-Statistical Sampling Publication Revised

1/18/2013

SALT Report 2054 – The Wisconsin Department of Revenue updated their publication regarding the use of non-statistical sampling in sales and use tax field audits.  Non-statistical sampling is commonly used if the taxpayer’s records are missing or if there are other circumstances that make reviewing the records difficult, for example, the records are held in an off-site storage facility.

The type of sampling method used will be determined by the manner in which the records are filed.  In most cases, taxpayer records are maintained in either alphabetical or chronological order, therefore the two most common sampling methods used are:

The Alpha Sample – When the documents to be examined are filed alphabetically by customer or vendor name, the alpha sample selection method is used.  With this method vendors are assigned alphabetically to each year of the audit so that equal shares of the documents are examined.

The Time Based Sample – When the documents to be examined are filed chronologically, a time-based sampling method is used.  With this method, the auditor will select one month’s transactions to review for each year under audit.

The publication explains the factors considered when determining if sampling will be used, how sampling results are calculated, and situations that may affect sampling results.

The publication reflects the Department’s interpretation of Wisconsin laws enacted as of December 1, 2012.

For Further Information:

Wisconsin Department of Revenue – Publication Number 515