Can the State Audit Your Taxes?

May, 27 2022 by Charla Suaste

Often, when we talk about being audited, our minds immediately go to the infamy of the Internal Revenue Service. For this reason, it can be easy to forget that state agencies who collect income tax can audit your tax return as well!

The IRS regularly exchanges tax information with state tax agencies. As such, the audit of a federal return can trigger an audit of a taxpayer’s state return. One of the most common reasons for a state audit is the audit of your federal tax return. If the IRS makes adjustments to a previously filed federal tax return, this could affect claims made on your state return such as credits claimed and deductions taken. Upon the completion of an audit, the IRS may notify the state of any changes that were made. In turn, this could prompt your state taxing agency to come knocking!

One way to prevent this from happening is to amend your state tax return and make any necessary revisions based on the IRS’s determination. If you are not sure how to prepare an amended return or don’t know what changes need to be made and you filed your return using TurboTax, the software can assist you with the process of amending your return. If you did not use TurboTax, we recommend contacting a local tax professional to assist you with this process!

Other common triggers that can initiate an audit of your state tax return include anything from working in a state that is different from the one you reside in, owning a business that operates in more than one state or simply making a mathematical mistake or other discrepancy.

However, no matter the reason for receiving such a notice, you should never have to defend your tax return to any state agency without the proper representation. That is where TaxAudit comes in.

At TaxAudit, we are the experts in defending taxpayers in the event of an audit. Upon the receipt of a letter or notice from any income taxing agency, you should call us right away so we can step in and begin the representation process.

 

What does this look like, you might ask?

First, you’ll speak with one of our top-notch Customer Service Representatives. They will work with you to get your case started and provide you with an outline of your next steps.

You will then be assigned to one of our Case Coordinators. This person will be there to provide administrative support from the start of your case all the way through to a resolution. They will work with you to get set up on our secure message portal and advise on initial documentation that will need to be sent in.

Then, you will be assigned to one of our world-class tax professionals. This person will be there to represent you to the IRS or state taxing agency every step of the way. This includes:

• Reviewing the notice, your tax return, and any additional documentation that might be needed.
• Explaining your options and developing a strategy
• Thoughtfully preparing any necessary documentation to present to the taxing agency in an organized manner.
• Scheduling and attending all phone calls and audit appointments on your behalf.
• Diligently following up with the IRS or state tax agency to ensure your case is resolved efficiently and fairly.
• Ensuring that you pay no more tax than you rightfully owe.

If you are a member with us and have received any type of income tax notice, make sure to contact us right away so that we can get the process started and avoid unnecessary delays.

If you are not a member with us and would like the peace of mind that comes with audit representation, click here to start the process of purchasing a membership or call our Customer Service team at 800.922.8348, and they will be happy to help.