Helping Your Client Avoid a Residency Challenge After They've Moved Away

A number of ASCPA members have mentioned recently, and we've also noticed, a major uptick in the number of so-called "residency audits" conducted by the Alabama Department of Revenue (ADOR). The Alabama Tax Tribunal has issued a number of rulings on this issue in the past few years as well. Often these audits result from the taxpayer having filed a federal income tax return listing an Alabama address, while not having filed an Alabama return. The ADOR receives notice of this discrepancy through its exchange of information agreement with the IRS. 

Republished with permission. This article was first published in the September/October 2016 issue of Alabama Society of CPA's "Connections".