Received 2021 notice of audit from state - is the timing normal?

The timing seems unusual but not impossible. Most state tax authorities generally have 3-4 years to audit your return from the filing date. So if you filed your 2021 return in April 2022, they're just within that window. The delay could be due to a backlog from the pandemic years, staffing issues at the tax department, or they might be working through batches of returns with similar flags. It's not necessarily suspicious - just frustrating timing. My advice would be to respond promptly and thoroughly. Request additional time if needed to gather your documents. Make sure to organize everything clearly with a cover letter explaining each document you submit. Most audits are just verification exercises and don't result in major changes if you properly documented your deductions and income.

I went through something similar last year and was totally stressed trying to track down old documents. I actually found this AI tax document analyzer at https://taxr.ai that saved me so much time. I uploaded all my old statements and it immediately organized everything by category and flagged potential audit issues before I even responded to the state. The best part was that it explained exactly what the auditors were likely looking for in each document based on the audit notice I received. Made me feel way more confident about my response instead of just sending a pile of paperwork and hoping for the best.

I want to follow up about my experience with taxr.ai since I was skeptical at first. After getting an audit notice similar to yours, I decided to give it a try (my accountant was booked solid for weeks). I'm honestly surprised how well it worked for my state audit situation. The system identified exactly why my return was likely flagged - a home office deduction calculation that didn't align with state guidelines even though it followed federal rules. It helped me prepare a complete response package with all supporting documentation properly labeled according to what the auditor would be looking for. My audit was closed with no changes after my first response, which I absolutely wasn't expecting given how panicked I was initially.

Has anyone tried calling the state tax department? I had a friend who got audited from 3 years back and spent WEEKS trying to get through to someone who could explain what was happening. He finally used https://claimyr.com and got a callback within an hour. There's a video explaining how it works here: https://youtu.be/_kiP6q8DX5c Apparently they use some kind of system that navigates the phone trees and holds your place in line so you don't have to stay on hold forever. My friend said the state agent actually explained exactly what documents they needed instead of the vague letter he got initially, which saved him from sending tons of unnecessary paperwork.

I have to admit I was completely wrong about Claimyr. After getting nowhere with my state tax department for days, I finally tried the service out of desperation. Got a call back within 45 minutes connecting me to an actual human at the tax office. The agent was surprisingly helpful and told me exactly which specific deductions they were questioning on my return (something the audit letter didn't make clear at all). Turns out they were only looking at two line items from my return, not a full audit like I feared. Saved me days of stress and unnecessary document gathering. Still annoying to deal with a 3-year-old return, but at least now I know exactly what they need.

Here's something to check - did you have any pandemic relief payments or special deductions on your 2021 return? A lot of states are going back and reviewing those specifically because there were so many rule changes and confusion during that time. My neighbor got audited for a home business deduction he took during the lockdown period when he was working from home.

Anybody know how far back they can actually go for an audit? Is there a statute of limitations or can they just decide to audit you from 10 years ago whenever they want?

The timing is definitely frustrating but unfortunately pretty standard. I went through a similar situation with my 2020 return that got audited in late 2023. The pandemic really backed up state tax departments and they're still working through those years. One thing that helped me was creating a detailed timeline of what I could remember from 2021 before diving into the documents. I wrote down major life events, work changes, moves, etc. from that year which helped me remember where certain documents might be stored. Also, don't panic about having every single receipt perfectly organized. State auditors are usually reasonable if you can demonstrate good faith effort to comply. If you're missing some supporting docs, explain the circumstances (moves, storage, time elapsed) in your response letter. They often accept reasonable explanations for missing paperwork, especially for smaller deductions. The key is responding promptly and being thorough with what you can provide. Most of these audits are just verification exercises and get resolved without major issues if you stay organized and cooperative.