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» From: the ether Dear TaxMama, We have received a bill from our state revenue cabinet stating our income tax return has been reviewed and adjusted. I understand our mistake now, but we have made the same mistake for years (one that involves medical expenses and deductibles). I would like to know if this is a one time evaluation or will we be audited for our federal taxes as well as other yearly state taxes? It would really help to know these answers, although we know if it is just a random one time deal that we could be unlucky enough to be picked again. Thank you. Larry Dear Larry, Typically, IRS and the states exchange information with one another. In fact, most states have the requirement that once you've had an IRS audit, you have 6 months to file an amended return for your state. You haven't told me what state you're in so it makes it more difficult to give you a specific answer. I'd go see a local tax pro to amend your IRS return, before IRS gets to it. The tax pro may be able to find some offsets that IRS would not consider. As to whether this will audit will open other years? Most likely, since your state found errors that generated income for them in one year, they will look to the other years that are still open to the statute of limitations. (At least, it makes perfect business sense for them to do that.) That's another reason to sit down with a local tax pro - especially someone who is familiar with your state's auditors (has a relationship with them). They can review your tax return and find other errors in your favor before the auditors contact you. Good luck! Eva Rosenberg Your TaxMama  |
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