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State tax appeals checklist.

As the number of multistate taxpayers--both individual and corporate--increases, CPAs often are faced with having to appeal a tax assessment in an unfamiliar state. Since no central authority mandates uniformity, tax practitioners and industry CPAs must learn to cope with myriad rules, regulations and deadlines.

To make it easier to assist multistate taxpayers, Steve C. Wells, Doug Barney and William D. Wallace, authors of "Taxpayers Face Diversity in State Appeals Procedures" (see the Tax Practice department, page 39), developed a checklist of questions to be answered before attempting an appeal of a tax assessment in another state.

1. How is the state's administrative appeals procedure organized?

2. What are the respective due dates for filing returns, making estimated payments and filing extensions?

3. What penalties are imposed for late filing of individual and corporate returns? Are the penalties automatic?

4. What penalties are imposed for the underpayment of tax? Are the penalties automatic?

5. What interest rate does the state impose on penalties or underpayments? When and how do the rates change?

6. What is the statute of limitations for the state to assess additional taxes?

7. What is the statute of limitations for filing for refunds?

8. Does the state levy more than one type of tax (sales, income, franchise, property, etc.)? If so, do appeals procedures vary by the type of tax involved?

9. What is the protest period for appealing an additional tax assessment? Does the protest period begin at the date of the notice or the date of receipt?

1O. Has the state adopted a "taxpayer bill of rights"?

11. Do the appeals procedures provide for an informal conference? If so, is there a deadline for requesting such a conference and must the request be in writing?

12. If an appeal is made, is payment of the disputed tax required before an appeal is heard? If not, at what point in the appeals process is payment required?

13. Will making certain elections in the appeals process result in forfeiture of other remedies to which the taxpayer might otherwise be entitled?

14. Does the state tax agency issue formal opinions? If so, are these opinions a matter of public record? (If available, the practitioner may wish to review them for relevance to the taxpayer's case. )

15. Does the state have an independent tax court or board to hear protests?

16. What is the average time for the appeals process from the additional assessment to the final adjudication?

17. Are net operating loss carrybacks permitted?

Answers to these questions can be obtained by consulting applicable state statutes and state tax reference services and guides and by directly contacting the respective state tax agencies.
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Publication:Journal of Accountancy
Date:Sep 1, 1992
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