For those who use TurboTax you get an option to pay $50 for audit insurance via Audit Defender. I ALWAYS opt for this.

Wellll I got the dreaded state audit letter yesterday for the tax year 2022. I had a massive gain as I sold out of the hood in 2022. Now the state is double/triple checking my deductions via an audit.

So I call Audit Defender and opened a case....went thru some basic questions to verify I qualify. the insurance is backed by an outfit called TaxAudit.

This will be interesting. Question is do any of you have experience with Audit Defender or TaxAudit? Good or Bad?

Yeah ... never go it alone when they have unlimited resources.

Today a secure web portal was set up so I can download requested info. The audit letter and 2022 return where the first downloads.

I had a bad experience. The money spent for Audit Defense would have been better put to use as toilet paper.

The reps at Audit Defense told me to ignore the audit letter and wait for the IRS penalties. I escalated to get different reps. Their V.P. of Do No Work was irritated at being disturbed, and also said that I should ignore the audit letter and wait for penalties. He offered to have his team represent me "if I really wanted them to", but said it in a threatening tone to make it clear they would have the IRS stick it to me. I got the message.

I don't use that system but have experience on state tax audits. They seem a great deal less intrusive than I expected them to be. The state claimed that I had an extra $2,800 in income.

An audit can open yourself up to an unlimited review costing you thousands and maybe even 10 of thousands. Where my CPA said the state (Illinois) was on a simple fishing expedition for extra cash, the numbers didn't make sense to argue over. The extra tax was under $100 and there was a $200 late fee/fine. Best I could figure was they included my tax refund from my Pa and WV returns. Since this was a refund for over payment on money that was already taxed, I know was right.