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Last Updated: 10/13/2017

Appealing an Audit

You can appeal a Department of Revenue audit either informally to the department or formally to the Minnesota Tax Court. You must file the appeal within 60 days of the date on our audit report.
 

What if I need more time to prepare my appeal?

You can request a 30-day extension by writing to us at the address provided on the audit report, within the 60 day appeal period.  However, interest will continue to accrue on any unpaid debt.
 

How do I appeal to the Department of Revenue?

  1. Complete the "Audit Appeal" form enclosed with your audit report.
  2. Include any documents or other information that support your appeal.
  3. If you want to talk to a department representative, request this in your appeal.
  4. If another person is acting on your behalf, attach a signed copy of Form REV184, Power of Attorney, which authorizes them to represent your interests.

What if my appeal has been denied?

If we deny your appeal, you have 60 more days to appeal that decision to the Minnesota Tax Court.
 

How do I appeal to the Tax Court?

You can appeal your case to the Tax Court’s Regular Division or Small Claims Division (if the total tax, penalty, and interest in dispute is less than $5,000). All decisions in the Small Claims Division are final.
 
For more information or to get appeal forms:

What if I disagree with my penalty?

We may cancel your penalty if you can show you had “reasonable cause” (an acceptable reason) for not complying with the tax laws. Send us a detailed explanation to back up your argument. You should still pay your tax and interest due because interest will keep accruing until we advise you of our decision. If we decide in your favor, you will receive a refund of any overpayment.
 

What if I received incorrect written advice from a Department of Revenue employee and have been penalized?

If we gave you incorrect advice in writing and you were penalized as a result, we will cancel your penalty. However, that does not reduce the amount of additional tax or interest you owe. If we deny your request to cancel a penalty, you have 60 days to appeal that decision to either the department’s Appeals Office or the Minnesota Tax Court.
 

What about charging me interest?

We assess interest on any unpaid tax and penalty after the tax return’s due date. Interest is not a fine, so it’s not the same as a penalty. We rarely cancel the interest charge.
 

I agree with the tax order, now what should I do?

Review your returns filed for more recent tax years to see if similar changes are needed. If so, you must file amended income tax or property tax refund returns for those years and pay any additional tax and interest that you owe as a result. If you do not fix the mistakes in your returns, you could be audited and have to pay additional penalties and interest.
 
To amend your returns, use the following forms:
 
Form M1X, Amended Minnesota Income Tax Return
 
Form M1PRX, Amended Property Tax Refund Return

I agree with tax order, how do I make a payment?

You can pay electronically or by mail, as follows:
  • To make an electronic payment: Log in to our e-Services system, or call 1-800-570-3329 to pay by phone. Please have your Social Security number and banking information handy.
  • To pay by mail: Make your check payable to Minnesota Revenue. Send your check – along with the payment voucher that came with your audit report – to the address listed on the voucher.
Pay as much as you can by the due date, and continue to make payments until you are contacted by Department of Revenue Collections. At that point, they can help you set up a payment plan for the remaining balance.
 

What if I paid  more than I should have?

If you paid more tax than was owed, you can file for a refund using Form M1X. To claim a refund, you must file within 3½ years of the due date of your original return or within 1 year of the date on the audit report, whichever is later.
 

Are payment agreements available?

Yes. If you can not pay in full right now. Installment agreements are used if you are unable to pay your liability in full with a single payment. The fastest and easiest way to set up a payment agreement is through our website. Go to the Online Payment Plan System.
 
For more information, see Payment Agreement information.
 

What if the IRS revised the audit that Minnesota is basing the additional tax liability on?

Sometimes the Department of Revenue audits your Minnesota return and assesses additional tax, based on information from an IRS audit of your federal return. If you successfully appeal an IRS audit, and the resulting changes affect your state taxes, you also should file a Minnesota appeal. Be sure to include all IRS documents showing that the IRS reversed or revised its original audit.
 
To check the status of a federal audit, call the IRS at 1-800-829-1040.
 

What if I don't respond to the audit I received?

If you don’t respond to an audit within 60 days, the Department of Revenue will take additional steps to collect the money you owe.
 
For more information on appeals, see Appeals in the collection information.
For more information on this process, see “I owe the Minnesota Department of Revenue. Now what?.”