How does Tennessee handle tax audits?

Tennessee's approach to tax audits, conducted by the Tennessee Department of Revenue, is systematic and thorough. The Department uses various methods to select taxpayers for audit, including random selection and targeted reviews based on specific criteria. These criteria may pertain to discrepancies in tax returns, unusual patterns in reported income, or other factors that warrant further examination. When a taxpayer is selected for an audit, the Department typically notifies them via mail, and the communication outlines the scope of the audit and the documents or records that may be required. It is essential for the taxpayer to gather relevant documentation to support their tax filings, as this can significantly impact the audit's outcome. The audit may focus on different types of taxes, such as sales and use tax, franchise and excise tax, or income tax, depending on the taxpayer's situation. During the audit process, the auditor will review the provided information and may ask additional questions for clarification. At the conclusion of the audit, the Department will issue a report detailing the findings, which may lead to adjustments in tax liability. Taxpayers have the right to appeal any findings they believe to be inaccurate. For more detailed information about audits, taxpayers may wish to consult the Tennessee Department of Revenue website, which includes resources and contact information for specific inquiries.