An audit by any other name??

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- MZB
  
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posted
2 years ago

Sat, Mar 26, 2022 2:37 PM

I posted in a different thread that when I checked on my Michigan refund, it said ?Under Review.? I was curious what it might be. Well, yesterday I received a letter from the Michigan Department of Treasury, Discovery and Tax Division.

Anyway, it starts out by saying that a tax return was filed in my name. It goes on to mention that there?s an increase in tax fraud, identity theft, etc. and they are trying to prevent this. Hence, my return ?was selected for review.?

Bottom line: ?Treasury needs to confirm your identity.?

They want me to send them copies of all my W2s, 1099s, SS-1099s, etc. along with a copy of my driver?s license. They conclude ?This review generally takes 12 weeks.?

So, now, my question. Is this a ?routine? identity check? It sure sounds like an audit cleverly designed to look like something else. Hard to know what to think.

Mel

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- ira smilovitz
  
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posted
2 years ago

Sat, Mar 26, 2022 3:55 PM

It, more than likely, is what it claims to be. I have seen similar letters from other states and in no case was there every any change proposed in my clients' returns. Either there is a potential identity theft situation and they're looking for which taxpayer can document their return or there was a "significant" deviation from past reporting flagged by the detection algorithm. This can be a change in the pattern of income, source of income, etc.

It's a pain but there's no way to avoid it.

Ira Smilovitz, EA Leonia, NJ

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- John Levine
  
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posted
2 years ago

Sat, Mar 26, 2022 4:35 PM

According to MZB snipped-for-privacy@noway.prudigy.net>:

Refund fraud really is a big problem, so I think they are doing what they say they are, ensuring that it's really you.

A couple of years ago my Federal return was flagged for an identity check even though it had a payment due. (The usual fraud is to file a fake return and steal the refund.) I was able to handle it with a phone call, and the agent was as baffled as I was why they had flagged the return.