Federal Tax Credit Extension
April 5th, 2010
Question: Should I file my tax return during an audit, and if I do, will I recieve my refund?
The State of South Carolina is investigating state tax returns of individuals that claimed the 1098-T tax credit. They are auditing a large amount of students, and I am one of them. Although I fit the criteria necessary to get the tax credit, and don’t forsee my having to pay back taxes (I was a full-time student, I paid my university fees out of pocket, I graduated from a south carolina high school, etc.) this is tax season, and I would like to file my return in order to get my federal refund back.
Should I wait and file an extension? If I do file now, will I get my refund when I expect to (within a few weeks).
I sent all the documents requested a few weeks ago, and have heard nothing back from the agent.
Thanks.
Answer: You are fine to file your federal taxes as well as the state taxes. Neither agency can take your refund without there first being an audit and a finding that you owe them anything. The state audit will not affect your federal tax filing at all!
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