Auditing process
We accept most tax returns as filed, but to ensure the accuracy of voluntary compliance, we audit a variety of returns each year.
Once a return is assigned to one of our auditors, an audit appointment or correspondence letter is sent. This letter will ask you to submit information required for the audit. Some audits are conducted entirely through the mail, and other audits may require face to face or virtual meetings.
Audit meetings may occur at your home or office, your representative's office, one of our locations, or virtually. If you want a representative present, you need to complete a Tax Information Authorization and Power of Attorney for Representation form.
You'll be asked to provide proof of return amounts and documentation, including but not limited to:
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Business income and expenses.
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Receipts for purchases.
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Bank statements.
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Transportation logs.
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Travel, meals, and entertainment receipts.
When the auditor is done reviewing your records, you may receive a Proposed Auditor's Report if changes are needed. It will explain the proposed changes and the reasoning. Please ask the auditor about anything that is unclear to you.
After the audit, we will:
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Accept the tax return as filed; or
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Issue a Notice of Deficiency and Auditor's Report that explains the changes to your return and shows the additional amount you must pay and why; or
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Issue an Auditor's Report that shows you are entitled to a refund and why.
If we changed your return, the auditor will explain your appeal rights. If you owe additional tax, penalty, or interest, the auditor will provide information on your payment options. You may pay the additional amount at any time during the audit. The auditor may also ask you to amend your return(s) for other tax years for the same issue.
Frequently Asked Questions
You can represent yourself, have someone accompany you, or designate someone to represent you. If your case is hard to understand or involves many issues, you may want someone to help you. If someone else prepared the return, you may also want their help.
People who can represent include:
- Oregon-licensed lawyers.
- Oregon-licensed public accountants or certified public accountants.
- Oregon-licensed tax consultants.
- Oregon-licensed enrolled agents.
- Out-of-state CPAs, if they meet substantial equivalency requirements. (ORS 673.010)
- If you own a business, the employee who does your tax work.
- Processing adjustments. Processing adjustments are corrections we make to a return while we process it.
- Federal audits. These audits are based on information from the Internal Revenue Service (IRS). If you receive an audit report from the IRS and the changes made affect your Oregon return, you should amend your Oregon return as soon as possible. Interest charges accrue from the due date of the return until all tax is paid.
- Correspondence audits. These are written letters asking you to confirm items on a return. The letter explains what items we're reviewing and what we need from you to verify them.
- Field audits. These are in-depth audits that include the review of income and expenses from businesses, farms, partnerships, corporations, or rentals.
If adjustments on your federal return or another state's return affect your Oregon return, you should amend your Oregon return as soon as possible.
If you filed an appeal with the IRS or the other state and you get a notice from us, send a copy of the IRS or other state appeal notification. We'll suspend further action until your case is resolved.