Can New York State Audit My Federal Tax Return?

Can the state of New York audit a federal tax return? Well, there’s nothing to prevent it from doing so. Often, a New York taxpayer may claim a state tax refund based upon the result of some calculation on the taxpayer’s federal tax return. Then, a New York state auditor questions the result and decides to inquire further by auditing the taxpayer’s state and federal return. At the Thorgood Law Firm, we’ve been seeing such audits occur much more frequently in the last few years.

New York State audits for different taxes including income, sales, payroll, and corporate franchise, with each tax having its own set of legal requirements. Audits are usually triggered by returns being compared to statistical norms to determine any likelihood of error or under- reporting, with certain anomalies triggering an audit.

What usually occurs is that a taxpayer receives a letter requesting information that affects the accuracy of a particular federal schedule or other applicable form. Once the taxpayer responds, perhaps by having to provide a voluminous amount of information to the State of New York, the auditor may agree and the audit ends. However, the auditor also may disagree and consequently issue a statement of proposed audit changes proposing to disallow losses or deductions claimed on this federal schedule based upon allegations that they were improperly or incorrectly taken.

If the State of New York is auditing your tax returns and you need assistance and guidance in resolving any problematic issues, call THE TAX EXPERTS at the Thorgood Law Firm For a FREE consultation, call 212-490-0704.Can New York State Audit My Federal Tax Return?

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