The Indiana Department of Revenue (DOR) partners with the Internal Revenue Service (IRS) and receives information pertaining to changes to a tax return based on their audit findings ranging from system audits to a full CP2000 audit. DOR then uses the IRS information to automatically change Indiana tax returns to follow IRS findings. No action will need to be taken by the taxpayer.
CP2000
A CP2000 is a notice a taxpayer will receive from the IRS concerning a discrepancy within their return after an audit. The findings from the audit are shared with DOR and are automatically adjusted on the taxpayer’s Indiana tax return.
Examination Operational Automation Database (EOAD)
EOAD is used by the IRS to trigger an IRS Audit. Their audit results are shared across the country depending on each state’s agreement parameters.
Under-Reporter
The IRS receives third-party information to ensure tax compliance following the same process as Indiana and other states. When there is a discrepancy in tax liability and changes are made, the IRS shares these changes with the states.
My Indiana tax return was changed due to an IRS Audit. Now what?
There is nothing further that needs to be done with your Indiana tax return if the changes on the return agree with the IRS audit outcome. Of course, DOR understands additional changes, agreements, or compromises of tax liability could have occurred after Indiana received the IRS audit findings. In this case, any further changes to the Indiana tax return can only be made by submitting a current Record of Account (ROA) or Account Transcript for the tax year in question.