Your Right to Appeal a Notice of Deficiency Determination - Idaho State Tax Commission (original) (raw)

Idaho law gives taxpayers the right to protest a Notice of Deficiency Determination (NODD) they receive from the Tax Commission.

After you receive your NODD

You have 63 days from the date we mail the NODD to file a written protest to request that we redetermine the deficiency (see Idaho Code section 63-3045). We send the NODD to your last known address on file. Your written protest must contain all the following information to be “perfected”*:

1. Your name, address, and tax identification number (Social Security number, federal Employer Identification Number, Idaho tax permit number, or Individual Taxpayer Identification Number).
2. The tax period(s) the deficiency relates to.
3. The specific item(s) you disagree with.
4. The factual or legal basis for the objections made.

*”Perfected” means that your protest can proceed to the next stage.

If your protest includes all the required information, we’ll send you an acknowledgment letter.

If your protest doesn’t include all the required information, we’ll send you a letter telling you what you need to do to perfect your protest. We must receive the information required to complete your protest within 28 days from the date on the letter we sent notifying you that your protest wasn’t complete. Otherwise, the NODD becomes final on the 29th day, and you lose your right to appeal. When appropriate, we might reduce the amount of deficiency during the 29-day period.

If the unit that sent the NOOD doesn’t resolve your protest, it transfers the protest to the Tax Commission’s Appeals Unit.

The Tax Commission’s Appeals Unit

Our Appeals Unit, a group independent from the unit that sent the NODD, is responsible for reviewing and resolving your protest.

The mission of the Appeals Unit is to resolve disputes with taxpayers in an informal, timely, and consistent way, and to determine the correct amount of a taxpayer’s tax liability. Your tax liability is your full debt and includes tax, interest, and any penalty that applies.

When the Appeals Unit receives your perfected protest, an appeals specialist is assigned to your case. The specialist is your point of contact and will send you a letter that outlines the next steps in the appeals process, including the right to an informal hearing. This letter is called the hearing rights letter. You’ll also receive your case number.

If you request an informal hearing, the appeals specialist will ask you for a list of dates when you’re available. You can either appear in person at the Tax Commission’s Boise office or join by phone.

You can also provide additional documents before the hearing.

If you don’t respond to the letter the appeals specialist sends you or if you don’t appear for your hearing (and didn’t reschedule), we might issue a decision after 42 days from the date of the hearing rights letter or the date the hearing was scheduled. The decision will be based on the material available in your protest file.

Informal hearing

An informal hearing is your chance to discuss the NODD and your protest with us. The informal hearing is like a conference. No one is under oath, and the “rules of evidence” (as in a legal proceeding) don’t apply.

Your appeals specialist will attend. A Tax Commissioner might attend. Other Tax Commission staff or a representative from the Idaho Attorney General’s office might also attend.

The informal hearing gives you the opportunity to explain why the NODD is incorrect. The appeals specialist has access to information on file with the Tax Commission or that you gave the unit that sent the NODD. Please bring any new documents, records, or other information that supports your position.

You can ask questions at the hearing. Someone might also ask you questions.

We record the hearing for administrative purposes. You can also record the hearing with your own equipment and at your own expense.

Representation at the informal hearing

You have the right to be represented or accompanied by any person of your choice at the hearing.

However, if you want someone to act on your behalf following the hearing, you must authorize this in writing. We have a Power of Attorney form designed for tax matters. You can use this form to appoint an attorney, accountant, tax preparer, family member, friend, or anyone else to act on your behalf.

Resolving your case

A case can be resolved in one of these ways:

• We can issue a decision that upholds the NODD, modifies it, or cancels it entirely.
• You can withdraw your protest.
• We can resolve your protest through a settlement agreement.

We won’t announce a final decision at the close of your informal hearing.

Although it depends on the complexity of the case, your appeals specialist will take the following actions to review and resolve your case:

• Research relevant tax laws and rules.
• Review legal precedents.
• Evaluate any new information, documents, or legal arguments received during the appeals period (including during the informal hearing).
• Evaluate any new issues that may arise during the appeals period which could potentially increase or decrease the tax liability.

Appeals employees can ask employees from the originating unit questions that relate to ministerial, administrative, or procedural matters for your case. Appeals employees can’t ask them questions about the substance or positions taken without first giving you the opportunity to participate.

Settlement offer

You can make an offer to settle your appeal. It’s a written request and explains why the Tax Commission should accept your offer based on any of the following reasons:

• Disputed liability – You and the Tax Commission have a reasonable disagreement on the existence or amount of the tax liability under the law. A settlement based on disputed liability evaluates the risks of litigation.
• Doubt as to collectibility – Your assets and income may not be enough to pay the full amount of the liability.
• Economic hardship – You could pay the liability in full, but doing so would limit your ability to pay basic living expenses. The settlement amount is based on your facts and circumstances.
• Promotion of effective tax administration – Takes into account fairness and compelling public policy reasons that you identify. The settlement is fair based on the facts and circumstances of the case.

Your appeals specialist must present your offer to the Tax Commissioners. They’ll evaluate the offer, and they can accept it, decline it, or make a counteroffer.

An offer isn’t final until you receive a written settlement agreement signed by a Tax Commissioner or authorized delegate.

Read more about settlements in Tax Commission Administration and Enforcement Rules 500 and 501.

Final decision

Once your protest has been filed and after you receive a written acknowledgment of the protest from the Tax Commission, a final decision will be issued within 180 days following from either:

1. The conclusion of the informal hearing (if we didn’t give you extra time to provide new evidence or testimony), or
2. The date of a written request from you for a final decision on the issue. This request for a final decision must be the sole subject of your letter. See Tax Commission Administration and Enforcement Rule 325 for more information. If you request a final decision, we may deny any further request from you to provide more evidence or documents or to appear at any proceeding during the 180-day period.

We can delay a final decision if you agree in writing to waive the 180-day requirement. The waiver may be for a fixed period or open-ended.

Protesting after a final decision

If you disagree with the Tax Commission’s final decision, you have more appeal rights:

• Individual income tax. Appeal to the Board of Tax Appeals (BTA) or a district court.
• Corporate income, sales, or use tax
  • For amounts of $25,000 or less: File a petition with the BTA or a district court.
  • For amounts over $25,000: File a petition in district court.

You have 91 days to file a petition. After 91 days, all appeal rights expire. If you’re filing in district court, file in Ada County or the Idaho county where you live or have your main office or place of business.

Security

To appeal the Tax Commission’s decision to the board of tax appeals or district court, you must submit one of these securities in the amount of at least 20% of what the agency says you owe:

• Cash in the form of a cashier’s check, money order, or other certified funds payable to the Idaho State Tax Commission.
• A bond. A surety company licensed and authorized to do business in Idaho must have issued the bond.
• Bearer bonds or other similar obligations of the United States.
• Automatically renewable time certificates of deposit (CDs).
  • The CD must be in the name of the depositor and payable to the Idaho State Tax Commission.
  • The CD must contain a provision that the bank pays the interest to the depositor.
  • The CD can’t exceed the federally insured amount.
  • The issuing bank must be doing business in Idaho, and the FDIC must insure it.
• Investment certificates or share accounts.
  • You must give the Tax Commission proof of the insured account. The proof is either the certificate or the account passbook.
  • You must also give the Tax Commission a properly executed assignment form that shows the funds on deposit are assigned and made payable to the Idaho State Tax Commission.
  • The certificate or account can’t exceed the federally insured amount.
  • The issuing savings and loan association must be doing business in Idaho, and the FDIC must insure it.
• An irrevocable letter of credit.
  • The letter must be made out to the benefit of the Idaho State Tax Commission.
  • The letter’s terms must permit the Tax Commission to make demand directly against the issuer. The Tax Commission can make the demand only on the amount related to this letter of credit. The Tax Commission can’t make the demand until after your right to appeal has expired.
  • The letter of credit can’t exceed the federally insured amount.
  • The issuing bank must be doing business in Idaho, and the FDIC must insure it.