The IRS and the states have mutual exchange of information agreements.  The agreements are oftern bi-directional, so that state information about audit results, often including sasles tax audits, is provided to the IRS jsut as IRS audit reuslt are provided to the states.

We recently surveyed the states to determine how which states have the equivalent of the federal Offshore Voluntary Disclosure Program (OVDP) to determine whether a taxpayer who enters the OVDP will be able to come forwarrd to thier state taxing authority.  The reuslts are somewhat surprising in that many states do not have conforming legislation.  The absnes of conforming legislation leaves many well intentioned taxpayers hoping that the relevant statute of limitations runs before the OVDP information is obtained from the IRS.

Our sruvey can be found at https://www.millarlawoffices.com/wp-content/uploads/Multi-State-Survey-of-Voluntary-Disclosure-Programs-1.pdf.

This is only a survey and is not intended as a substiute for legal advice.