Audits

1. What should I expect if I am audited by the Wisconsin Department of Revenue?
   
   
2. What should I do if I disagree with the changes the Wisconsin Department of Revenue made to my return?
   
   
3. How do I appeal?
   
   
4. How do I file a claim for refund of a paid assessment?
   
   
5. What can I do if my refund claim is denied?
   
   
6. How do I pay an audit notice/bill?
   
   

1. What should I expect if I am audited by the Wisconsin Department of Revenue?

   An office audit typically involves the following steps:

   1. The department reviews tax returns and credit claims to determine if the correct amounts were reported
   2. The department may request more information or receipts to clarify or support some items
   3. An audit will conclude with:
      • An assessment notice explaining the amount due, showing the tax, interest and penalty (if any), or
      • A refund notice explaining the amount of tax and interest (if any) to be refunded, or
      • No change
      
      

   For a more detailed description of an office audit, see Publication 511, Office Audit of Wisconsin Income Tax Returns.

   A field audit typically involves the following steps:

   1. The department sends a letter notifying you that your tax returns have been selected for examination. The letter requests you call the auditor to set the date and time of the initial meeting. At this meeting, the auditor will want to discuss the nature of the business, the accounting or record keeping system used, and other related matters. You may also receive a pre-audit questionnaire.
   2. An auditor will perform a detailed examination of the tax returns and your books and records to determine if the correct amounts were reported on the tax returns. If possible, the audit will be conducted at your place of business. In some instances the auditor will obtain information from third-party sources.
      
   3. Upon completing the examination, the auditor may determine that adjustments should be made which result in an amount due or a refund. The auditor discusses the proposed audit report in a final conference and a complete copy of the proposed report is given to you and/or your representative at that time. You are then asked to sign the Notice of Proposed Field Audit Report form indicating either full or partial agreement or total disagreement with the proposed adjustments.
   4. The department will notify you by mail of the results of the field audit. If there are adjustments, you will receive an assessment or refund notice. If there is no tax due and no refund, a letter will be sent explaining that there is no change in the tax liability.
      
      

   For a more detailed description of the field audit, assessment, and refund processes, see Publication 501, Field Audit of Wisconsin Tax Returns.

2. What should I do if I disagree with the changes the Wisconsin Department of Revenue made to my return?

   If you disagree, you may do one of the following:

   • Pay the full amount due without filing any appeal and then consider whether to appeal later by filing a claim for refund of the amount you paid.
     
     

     Note: For all tax types except sales and use tax, the claim must be filed within four years of the audit notice date. See question 4 below. For information on sales and use tax claims for refund, see Publication 216, Filing Claims for Refund of Sales or Use Tax.

   • File an appeal with the Department of Revenue within 60 days of receiving the notice. This is explained in Appeal to the Wisconsin Department of Revenue below.
     
     

     Note: To stop the accumulation of interest on amounts owed, you may either:

   • Deposit the entire amount of the additional assessment, including interest and penalty, if any, with the Department of Revenue when filing the appeal or at any time while the appeal is pending.

     You will be paid interest at 3% per year on any portion of the deposit which is later refunded to you.

   • Pay any portion of an assessment with which you agree. Such payment shall be considered an admission of the validity of that portion of the assessment and may not be recovered in an appeal or any other action or proceeding.
     
     
3. How do I appeal?

   You have six levels of appeal available to you, to be taken in this order:

   1. Wisconsin Department of Revenue - Resolution Unit
   2. Wisconsin Tax Appeals Commission
   3. Circuit Court
   4. Court of Appeals
   5. Wisconsin Supreme Court
   6. U.S. Supreme Court
      
      

   Note: With regard to taxpayers who file joint individual income tax returns which the department adjusts, an appeal by one spouse is considered an appeal by both spouses. Either spouse may appeal an action relating to a joint return. However, a spouse may not appeal an assessment or a denial of a claim for refund issued with respect to a separate return filed by the other spouse.

   The Department of Revenue will notify spouses jointly that they may deposit with the department the amount of an additional assessment being appealed to stop the further accrual of interest. If the spouses have different addresses and if either spouse notifies the department in writing of those addresses, the Department of Revenue will send a duplicate notice regarding the deposit procedure.

   1. Appeal to the Wisconsin Department of Revenue

      Any taxpayer (or the taxpayer's representative) may appeal to the Department of Revenue if the taxpayer disagrees with a notice of assessment or refund. Follow the instructions in your notice.

      An appeal must be:

      • In writing, stating the specific reasons for objecting to the adjustments and including supporting documents
      • Filed online, faxed, or mailed to the Wisconsin Department of Revenue
      • Actually received by the department within the 60 days, or mailed in a properly addressed envelope with postage prepaid, which is postmarked before midnight of the 60th day and received by the department within 5 days of the 60th day
        
        

      If an appeal is not filed with the department within the required 60-day period, the department's action is final. If an assessment was received, it must be paid. The only recourse then is to file a claim for refund. This is explained in question 4 below.

      Appeals may be handled through the mail or by a conference in Madison, Milwaukee, Eau Claire, or Appleton. Taxpayers may represent themselves or may be represented by another person, such as an attorney or an accountant.

      The Department of Revenue will notify the taxpayer in writing of its decision on the appeal.

      See Publication 506, Taxpayers' Appeal Rights of Audit Adjustments for more detailed information.

   2. Appeal to the Wisconsin Tax Appeals Commission

   The Wisconsin Tax Appeals Commission is entirely separate from the Department of Revenue.

   If a taxpayer disagrees with a decision from the Department of Revenue and wishes to contest it, an appeal must be filed with the Commission. The appeal must be filed within 60 days of the taxpayer's receipt of the department's decision.

   Note: If the taxpayer chose not to deposit the taxes with the department prior to the time of filing an appeal with the Commission, the taxpayer may, at any time while the appeal is pending before the Commission or a court, elect to either deposit the total taxes and interest with the Department of Revenue Resolution Unit or pay the portion of the assessment not being appealed.

   3. Appeal to the Courts: Circuit Court, Court of Appeals, and Supreme Court

   A taxpayer or the Department of Revenue may appeal a Tax Appeals Commission decision to the Circuit Court within 30 days after the date of mailing of the Commission's decision. The taxpayer or the department may then appeal the Circuit Court decision to the Court of Appeals, the Court of Appeals decision to the Wisconsin Supreme Court, and the Wisconsin Supreme Court decision to the U.S. Supreme Court.

4. How do I file a claim for refund of a paid assessment?

   For tax types other than sales and use, a claim for refund must:

   • Be filed on an amended return
   • Be filed within four years from the notice date
   • Include your name and address
   • Include your social security number, federal employer identification number, or account number
   • Include your reasons for requesting a refund
     
     

   For information on sales and use tax claims for refund, see Publication 216, Filing Claims for Refund of Sales or Use Tax.

   • For all tax types except Excise, send the appropriate amended return to:
     
     Wisconsin Department of Revenue
     Audit Bureau
     MS 5-144
     PO Box 8906
     Madison, WI 53708-8906
     
     
   • Send your claim for refund of paid excise tax assessments to:
     
     Wisconsin Department of Revenue
     PO Box 8900
     Madison, WI 53708-8900
     
     

   If you are entitled to a refund, we will figure interest and include it in your refund check.

5. What can I do if my refund claim is denied?

   File an appeal with the Resolution Unit within 60 days of receiving the denial notice as explained in Appeal to the Wisconsin Department of Revenue above.

6. How do I pay an audit notice/bill?

   You can pay online, by check, or by credit card.

   • Pay online
     
     

     Businesses:

     Go to tap.revenue.wi.gov. Log in and pay using My Tax Account

     Individuals:

     • Go to tap.revenue.wi.gov/pay
     • Select tax type (refer to the notice/bill)
     • Select the type of audit payment (refer to the notice/bill)
     • Apply the payment to the last tax year changed on your notice
     • Complete the required fields
     • Click Submit
     • Verify and agree to the payment
       
       
   • Pay by check
     
     
     • Make check payable to Wisconsin Department of Revenue
     • Print your tax account number in the check memo area
     • Mail the voucher included with the notice/bill and your payment to:
       
       

       Wisconsin Department of Revenue
       PO Box 930208 Milwaukee, WI
       53293-0208

   • Pay by credit card
     
     

     See Pay by Credit Card or contact the auditor for instructions.

     Note: A convenience fee applies to credit card payments.

Applicable Laws and Rules

This document provides statements or interpretations of the following laws and regulations enacted as of February 17, 2023: secs. 71.74, 71.75, 71.77, 71.88, 71.89, 71.90, 73.01, 73.015, 73.03, 77.59, 77.76, 77.96, 77.9964, 78.69, 78.80, 139.03, 139.092, 139.094, 139.315, 139.355, 139.365, 139.39, 227.57, 227.58, 808.04, 808.05, 809.60, 809.61 and 809.62, Wis. Stats.

Laws enacted and in effect after this date, new administrative rules, and court decisions may change the interpretations in this document. Guidance issued prior to this date, that is contrary to the information in this document is superseded by this document, according to sec. 73.16(2)(a), Wis. Stats.

The department welcomes your input on our guidance. Submit comments on this guidance document.

Guidance Document Number: 100019

February 17, 2023