When people talk about income tax enforcement, they usually think of the Internal Revenue Service (IRS) that collects tax payments on behalf of the federal government. However, residents of Georgia not only have to file their taxes with the IRS but also with the Georgia Department of Revenue.

As you might assume given the name of the organization, the Georgia Department of Revenue collects and enforces state tax law. In other words, they perform many of the same services that the IRS does at the federal level. Just because your tax return avoided federal audits doesn’t mean there can’t be issues that occur at the state level. Thankfully, you have many of the same rights when dealing with the Georgia Department of Revenue as you do when dealing with the IRS.

Yes, the state of Georgia can audit your taxes and finances

As with the IRS, the Georgia Department of Revenue has the authority to review tax filings for accuracy and request that citizens, corporations and other businesses provide documentation to substantiate their tax filings and the amount of tax that a particular taxpayer claims to owe the state government.

There are certain issues that can red flag a tax return for an audit at the state level just as certain issues can increase your risks of an audit at the federal level. The following can lead to a state audit of someone’s income tax filing:

  • Unusually low income for an individual or business
  • An exceptionally high number of deductions
  • Missing income statements or discrepancies between documentation filed by an employer and an employee

What penalties do you face from the Georgia Department of Revenue?

If the IRS alleges that you made efforts to avoid your tax obligations by intentionally underpaying your taxes or under-reporting your income, they can charge you with tax fraud or tax evasion. The state of Georgia can also bring criminal charges against you related to your payment or non-payment of state income taxes.

The state can also take enforcement steps like the government does, which could range from an audit to criminal charges. You can face state tax charges for underpayments or evasion that result in a repayment plan, a lien on your personal property or a garnishment of your wages. While you may feel embarrassed and scared, you need to address this issue directly and as soon as possible to protect yourself or your business.

As with any kind of federal tax issue, you should take any issue with your state return seriously. You have the right to defend yourself against both charges and an audit. The more proactive you are earlier in the process, the greater your chances to mitigate the consequences and secure a more favorable outcome to the audit.