Due to precautions related to COVID-19, we have expanded our options for remote consultations. Please contact our office to discuss whether a full phone consultation or video conference is appropriate for your situation.

That audit letter may not be from the IRS, p. 2

Statistics about individual income tax audits are hard to pin down, but a 2006 report by the Office of the Legislative Auditor found that the state of Minnesota conducted early audits on about 4 percent of individual returns and post-processing audits on about 2 percent of returns. Back in March, Forbes reported that the IRS audits an average of about 1 percent of individual returns.

Granted, it isn’t really an apples-to-apples comparison. Returns per 100,000 would be a better way to gauge whether you have a better chance of hearing from the Department of Revenue than the IRS, but, again, those numbers are not easy to find. Even so, taxpayers should not underestimate the odds that they’ll hear from the state.

When we left off in our last post, we were about to talk about the actual audit. In some cases, the auditor will go through your receipts, your checking accounts, 1099s and other information that you used to prepare your taxes. The auditor may surprise you, too, by asking for records that you thought had nothing to do with your taxes.

The good news is that not everyone has to meet with an auditor. In fact, if the errors in the return were fairly minor — you forgot to include one type of income on your return or you claimed tax credits that you did not qualify for — you may not even get a call from the auditor.

Either way, when the audit is done, the department will provide you with a complete rundown of any adjustments made to your return. If you owe taxes, this notice will include the details.

Remember, the state can make mistakes, too. You do have the right to appeal the results of the audit.

Source: Minnesota Department of Revenue

Findlaw Network

Archives

Office Location

Edina Tax Law Office
Pridgeon & Zoss, PLLC
7301 Ohms Lane, Suite 420
Edina, MN 55439

Telephone: 952-835-8320
Fax: 952-835-0201
Edina Law Office Map

St. Anthony Tax Law Office
Pridgeon & Zoss, PLLC
2812 Anthony Lane South, Suite 200
St. Anthony, Minnesota 55418

Telephone: 612-455-8948
Fax: 612-788-9879
Map & Direction

column-side-img