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Last Updated: 5/15/2018

MinnesotaCare Tax Audit Process

We regularly conduct audits to make sure taxpayers are correctly reporting MinnesotaCare tax. Audits are also an opportunity for us to provide education on the tax. 

What is the audit process like?

If your business is selected for an audit, we will contact you and guide you through each step. During an audit, we will visit your business and:

  • review your records over a specific time period (typically four to six years)
  • explain our findings and provide education on how to correctly prepare future returns
  • give you a preliminary report summarizing our initial findings

What records should I have available?

Keeping good records is very important! We review your records to determine the accuracy of each line on your MinnesotaCare tax returns. We will contact you and explain what records you need to provide for the audit.

You should have all internal accounting records and external third-party documentation available that support the amounts on your returns. This includes any paper records and any records you receive or store electronically. Some examples include:

  • Bank statements
  • Explanation of benefits (EOBs) from Medicare, FEHBA, and TRICARE payers
  • 1099 tax statements from payers
  • Collection agency statements
  • Credit card processing vendor statements
  • Patient financing company statements
  • Remittances from other government agencies
  • Detailed records of non-patient income
  • Audited and compiled financial statements
  • Invoices for legend drug purchases
  • All other summary and detailed reports, schedules, ledgers, and journals
  • Computer system or software back-ups

What happens after the audit?

At the end of the audit, we will send you a final report of the audit findings. The report will detail any changes to your tax liability, including any penalty and interest you owe.

You will have 60 days from the Notice Date on the final report to respond. You can respond in one of three ways:

  • pay any amount owed
  • file a written informal appeal with the department’s Appeals and Legal Services Division
  • file a formal appeal with the Minnesota Tax Court