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Paladini Law

A Tax Law Firm

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New Jersey State Tax Audits

Tax Audit Attorney Serving Bergen County and all of New Jersey

Like the IRS, NJ tax audits can be a lengthy, stressful process. This is only exacerbated because the state will sometimes examine 4 years of returns, as opposed to the 3 years the IRS generally examines.

NJ will utilize various audit techniques in an NJ tax audit depending on the business, the type of tax, and the quality of records you have. If your records are poor or nonexistent, NJ will use an indirect method to determine your tax liability. This essentially means NJ will make a guestimate of the amount of money you made and expenses you incurred and will tax you accordingly.

If you tried to handle the initial audit yourself and were unhappy with the results, there are appeal rights that can challenge the state’s conclusions. It’s imperative appeals are filed properly and timely. If not, your only remedy may be to pay the liability in full and engage in costly battle for NJ to refund your money.

What To Know About A Tax Audit:

  • Why am I being audited?
  • Do I need to meet with the auditor?
  • What documents does the state of New Jersey request during an audit?
  • What New Jersey auditors look for during an audit

NJ Audit FAQs

Why Am I Being Audited?

There’ are a few reasons you could have been selected for audit:

  • It could be random.
  • There could be unusual items on your tax returns, such as a category with unusually high expenses.
  • If you filed an amended return with a claim for refund, it can increase your chances of an audit.
  • A third party you use—such as a vendor or customer—could have been audited leading to a review of your business.
  • New Jersey could be focusing on your specific industry.
  • The Ex-factor: an ex-spouse, ex-business partner, or ex-employee could have provided information stating returns were filed inaccurately.

Do I Need to Meet with the Auditor?

Usually your attorney or authorized representative will handle all face-to-face meetings, phone conferences, and correspondence with New Jersey. It’s very rare a taxpayer must be interviewed.

What Kind of Documents Will New Jersey Request During an Audit?

In most audits, New Jersey will request:

  • All federal and state income tax returns
  • All federal and state payroll tax returns
  • State sales tax returns
  • General ledger
  • Form 1099s
  • Bank statements

Once the auditor reviews the return, she will usually ask for additional information via an Information Document Request. The auditor is seeking to spot check a few line items on the returns. For instance, if you deducted supplies, they may request backup documentation such as canceled checks and receipts to substantiate the deduction on the return.

What Are Some Common Things NJ Auditors Look For?

NJ Auditors will make sure all returns have been filed. In addition, they will compare the sales tax returns to the income tax returns for discrepancies in the gross receipts stated.

Contact a New Jersey Tax Audit Lawyer!

While you may be tempted to handle an audit yourself, it’s almost always a good idea to hire representation. We have experience handling NJ audits for various times of businesses and individuals. Below is a review from one of our previous clients, Jason:

Jason Chen Review

For help with NJ Tax Audits, contact me today.

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Practice Areas

  • IRS Audits
  • IRS Audits
  • IRS Payment Plans
  • IRS Payment Plans
  • IRS Offer in Compromise
  • IRS Offer in Compromise
  • IRS Installment Agreements
  • IRS Installment Agreements
  • Disclosure of Foreign Assets & International Tax Matters
  • Disclosure of Foreign Assets & International Tax Matters
  • New Jersey State Tax Audits
  • New Jersey State Tax Audits
  • IRS Tax Levies: What They Are, How They Work, and How to Respond

Don't Face Complex Tax Issues Alone. 866-384-7103

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Areas We Serve: Hoboken, Jefferson, Montville, Morris County, Morristown, Newark, Mount Olive, Parsippany-Troy Hills, Randolph, Rockaway, Roxbury, and Westfield
   

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Bergen County Office

80 W Century Rd., Suite B7
Paramus, NJ 07652
(by appointment only)
Phone: 866-384-7103
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Jersey City Office

Morristown Office

163 Madison Ave #220-38
Morristown, NJ 07960
(by appointment only)
Phone: 862-217-6967
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Morristown Office