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A degree in taxation, such as the Online Master of Science in Taxation from Northeastern University, can put students on a number of exciting, challenging, and interesting career paths. From preparing for the Certified Public Accountant exam to providing the skills for internal tax management and financial planning, students with a Master of Science in Taxation have a range of developing career areas they can pursue.
One of these potential employment opportunities is the tax auditor role, which requires a high attention to detail and a knack for precision, alongside an in-depth understanding of current tax codes.
The tax auditor job can be challenging, but it can also be rewarding, particularly for students with an interest in financial records and tax laws. Let’s take a closer examination of what tax auditors do, as well as how students can prepare for this type of employment with an online master’s degree from Northeastern University.
Tax Auditor Job Description
As Study.com explained, the tax auditor job includes a range of responsibilities and tasks related to financial records. That includes ensuring that records are created, filed, and reported upon according to current industry standards and legislation. Tax auditors might work on auditing procedures for the financial records of individual consumers, helping to ensure that their income reporting and other financial areas are free of errors and aligned with state and federal laws.
Tax auditors also work internally on the financial statements and other documentation of businesses, agencies, and other groups. In these instances, it is up to the tax auditor to:
- Check business financial records for compliance
- Ensure that this documentation and other sensitive financial information is kept secure. In this way, tax auditors may work with members of the company’s IT team to review the digital safeguards and systems in place for the organization’s banking and finances.
- Pinpoint any areas of fraud, or the potential for fraudulent financial reporting and other activities
- Identify any mismanagement of capital or wasteful spending, and make recommendations to improve spending efficiency
- Review and compute the level of taxes the organization owes, and facilitate the timely payment of these amounts
- Maintain the company’s financial records, and oversee the organization of this documentation
While an internal position in a company is common for tax auditors, there are also professionals who work externally. External auditors are typically Certified Public Accountants employed by an accounting firm. These firms are hired by businesses and other agencies to perform an external audit of their financial records. They may advise stakeholders on the company’s financial situation or any available tax breaks. An external auditor may also help businesses file their taxes and ensure their financial reporting is compliant and accurate.
Finally, there are also government tax auditors, including those who work for the Internal Revenue Service. IRS tax auditor jobs include responsibilities like organizing and overseeing the financial records and reporting of government agencies. IRS tax auditors may also engage in random auditing of businesses, nonprofit groups, or individuals, particularly if there are suspicions of fraud or noncompliance with federal, state, and local tax laws and regulations.
Work Setting and Schedule
As the above job descriptions note, tax auditors can work at the federal, state, or local level, including in external accounting firms, internally within a business, or with the IRS.
The U.S. Bureau of Labor Statistics pointed out that some auditors may also be self employed, but these professionals only make up about 7% of all accountant and auditor jobs. The majority of tax auditors and accountants work within external accounting, tax preparation, and bookkeeping services, encompassing 24% of the 1.4 million jobs held in 2018.
“Most accountants and auditors work in offices, but some work remotely from home,” the BLS noted. “Although they complete much of their work alone, they sometimes work in teams with other accountants and auditors … [and] may travel to their clients’ places of business.”
The tax auditor job description also typically comes with a full-time working schedule throughout much of the calendar year. However, as the BLS noted, some auditors may work longer hours during peak seasonal periods, including the end of the business fiscal year and during tax season.
Tax Auditor Salary
The compensation that tax auditors receive can vary depending on their working environment, past professional experience, and responsibilities.
The median annual wage for auditors was $71,550 as of May 2019, the BLS reported. Those working as external auditors in the finance field earned median annual wages of $76,440 last year. Auditors working in tax preparation or as bookkeeping service providers made $71,390 during the same period.
The BLS reported that IRS tax auditors, examiners, collectors, and revenue agents working in the federal government earned a median annual wage of $54,890 as of May 2019.
Career Explorer pointed out that compensation can also vary depending on seniority:
- Entry-level auditors typically make around $46,978 per year.
- Mid-level auditors earn an average of $75,875 annually.
- Senior auditors usually see a starting pay of $97,652 each year.
Overall, though, the top earners can make as much as an annual salary of $122,548.
How to Become a Tax Auditor
Before students and professionals can pursue tax auditor careers, there are a few requirements they need to fulfill:
- Education: The BLS noted that most tax auditor jobs, including IRS auditor jobs, require at least a bachelor’s degree in accounting, business administration, or a related area. To be considered for IRS auditor jobs, professionals must also have specialized work experience in the field. However, most employers prefer that tax auditors earn a master’s degree in accounting or in a specialized area like the Master of Science in Taxation.
- Certification: Tax auditors must also earn their CPA certification. Nearly every state requires those taking the CPA certification exam to first complete 150 semester hours of higher education, about 30 hours more than the typical bachelor’s degree.
A degree like the Online Master of Science in Taxation can prepare students with the skills they need to become certified public accountants and tax auditors. Learn about the Online Master of Science in Taxation degree offered by Northeastern University.