What is an Audit

An audit is an examination of the taxpayer’s books and records to determine whether taxes are being correctly reported.  An audit may be either a desk audit conducted by mail or by telephone with an examiner in the Montpelier office, or a field audit where the auditor comes to a taxpayer’s place of business.

What Generally Prompts an Audit

The Vermont Department of Taxes receives information from several sources, such as the Internal Revenue Service, Vermont Department of Labor, Secretary of State’s office, and several other state agencies. We also utilize information gathered from previous audits conducted, review of returns filed, and tips received.  Most often audits result from the information being analyzed and discrepancies being detected.

Reference Guide for Data Sources Used for Routine Internal Revenue Service Discrepancy Audits

Many of our audits use information received from the Internal Revenue Service (IRS).  The following chart is intended to provide common reasons or sources related to differences noted on the "Notice of intent to Assess details" letter involving IRS-related discrepancy audits.

Discrepancy Reference Guide for Vermont Form IN-111