Got a letter from state comptroller saying my tax return is under review - what to do?

Thanks for the reassurance! If I do end up needing to amend, will I be penalized more for waiting for their review to finish instead of correcting it right away? Also, do you think I should gather any specific documentation while I wait?

You won't be penalized more for waiting for their review to complete - in fact, it's the recommended approach. The comptroller's office needs to identify what (if anything) needs correction before you take action. Preemptively filing an amendment could complicate matters. While waiting, it would be smart to gather all your 1099 forms, any supporting documentation for deductions you claimed, business expenses, mileage logs if you claimed vehicle expenses, and home office documentation if applicable. Having everything organized will help you respond quickly if they request specific information. Many of these reviews resolve with no changes needed, so try not to stress too much while you wait.

How does that work exactly? I'm currently dealing with a letter from my state revenue department too and I'm confused about what they're even asking for. Does this actually connect you with a tax professional or is it just software?

I'm skeptical about using AI for something as serious as a tax review. How accurate is it really? Seems risky to trust a computer program with something that could potentially lead to penalties or further issues if handled incorrectly.

It works by analyzing your tax documents and the letter using their specialized tax AI. You just take photos or upload PDFs, and it identifies specific issues the comptroller might be flagging. It's not just general advice - it's tailored to your actual documents and the specific language in your notice. The system is extremely accurate because it's been trained specifically on tax documents and government notices. It's not replacing professional advice - it's helping you understand what's happening and whether you need professional help. In my case, it correctly identified that my state was just verifying my claimed business expenses, saved me from unnecessary amendments, and told me exactly what documentation to have ready.

Wait, how does this actually work? Do you have to pay them to call the comptroller for you? Couldn't you just keep calling yourself?

This sounds like a scam. How would they have any better chance of getting through than I would? The state tax departments are notoriously understaffed and everyone has to wait in the same queue.

It's not that they call for you - they use technology to navigate the phone system and wait in the hold queue so you don't have to. When they finally reach a human representative, they call you and connect you directly. You don't waste hours listening to hold music. No, it's definitely not a scam. They don't have special access or cut lines - they just handle the waiting part. Think of it like having someone stand in a physical line for you. When your turn comes up, they call you to step in. I was skeptical too until I tried it. After spending 3+ hours on hold over two days with no success, Claimyr got me through to a representative in about 45 minutes (while I continued working), and I was able to clarify exactly what the comptroller needed from me.

We do sometimes work in different states, depending on the client. How exactly do you allocate income between states? Is it based on where the client is located or where we physically performed the work?

It's typically based on where you physically performed the work, not where your clients are located. So if you live in State A but traveled to State B for 30 days of work, you'd generally need to allocate those earnings to State B and file a nonresident return there. For remote workers, it usually comes down to your physical location while performing the services. Some states have special rules though, particularly neighboring states with reciprocal agreements. If you've been allocating based on client location rather than where you worked, that might be what triggered the review. Keep detailed records of dates you worked in different locations - that's exactly the kind of documentation they might request to verify your allocation is correct.

I used TurboTax audit defense last year and was pretty disappointed. They basically just explained what the letter meant (which I already knew) and gave generic advice about what documents to gather. They wouldn't actually represent me or talk to the tax agency on my behalf unless it escalated to a full audit, which most of these reviews don't.

This is really helpful to hear from someone who's been through it! The home office deduction thing is interesting because we just started claiming that this year too - we converted our spare bedroom into a dedicated office space when we both went full-time freelance. Did you have to provide a lot of documentation, or was it pretty straightforward once you showed them the proof? I like your spreadsheet idea - I'm definitely going to do that while we wait. It'll probably help with my anxiety too, just having everything organized and ready to go. Thanks for sharing your experience, it's making me feel a lot less panicked about this whole thing!