Correspondence Audit
In some cases a QI or PAI can meet the QI audit requirement by performing a QI audit by correspondence with the IRS. This option, in fact, is the only alternative to the performance of a QI audit for a PAI, and can be used only in case the reportable amounts paid by the PAI do not exceed US$100,000.
For a QI, the correspondence audit typically is utilized in case the QI can not utilize a Waiver 1 (e.g., the QI is a part of a group of QIs that performs a consolidated QI audit) and the reportable amounts for the audit year do not exceed US$500,000.
The audit by correspondence with the IRS, for both a QI and a PAI, operates much like a Waiver 2. The most recent PAI correspondence audit report (in Excel format) was released by the IRS in April 2006 and the most recent QI correspondence audit report (in Excel format) was relased in May 2009. Make sure to change "2005" in the standard PAI corresondence report to the actual audit year.
