Please note that this appeals process is in place for all tax types except for locally assessed property tax appeals.
About the appeals process:
You have the right to appeal decisions that you disagree with, especially decisions about the taxes you owe or that you feel should be refunded. The appeals process is important and we encourage you to use it if you have an objection. Everyone should pay their share of taxes, no more and no less, and we need to be informed of our errors. You have several avenues to follow throughout the appeals process, which you can read about below or get more detail from the Tax Appeals - Reference Guide and Steps to Take.
This is the place to start; more than 90 percent of disagreements are settled with an informal review. If you disagree with a notice from us, you’ll need to file a written objection within 30 days from the date of the first notice. For your convenience, you can download a form specifically designed for this purpose. The informal review is effective because a department supervisor reviews your case and the work of any employees involved. Read specific instructions on how to request an informal review.
Office of Dispute Resolution
If you disagree with the outcome of the informal review, the Office of Dispute Resolution is your next avenue. Nearly all of the remaining objections with the department are settled here. You need to file a written objection with the Office of Dispute Resolution within 15 days of the outcome of the informal review in step 1. There is a form specifically designed for this step as well.
The first part of this step is a scheduling conference, often held by telephone. After that, you may appear before a hearing officer who is independent of other department staff members. The decision from the Office of Dispute Resolution is considered the Department of Revenue’s final decision. If you disagree with the decision, you may make your case to the appeal bodies outside the Department of Revenue. Read specific instructions on how to file an appeal with the Office of Dispute Resolution.
State Tax Appeal Board - District Court - Montana Supreme Court:
Steps three through five involve the State Tax Appeal Board, the District Court and the Montana Supreme Court. Taxpayers usually resolve disputes well before this stage and appeal very few decisions to these bodies. The State Tax Appeal Board guarantees your right to have your dispute weighed by a panel that is fully independent of the Department of Revenue, and is simpler and less expensive than going to court. Ultimately, you can appeal to the courts. This gives you the ability to have a judicial body determine whether the decision made by the Department of Revenue is fair and appropriate. View additional information regarding the State Tax Appeals Board, the Montana District Court and the Montana Supreme Court.
Reasonable Cause for Waiver of Penalty and Interest:
To qualify for a waiver due to reasonable cause, you need to show that you exercised ordinary business care and prudence, but were still unable to file a tax return within a given time. We determine whether reasonable cause exists on a case-by-case basis. The law looks to the intervention of some condition, occurrence, or event which the taxpayer was in no position to reasonably anticipate. However, the requirements are construed in favor of collecting the penalty and interest. Forgetfulness or inadvertence do not qualify, nor does a lack of knowledge of the law or inability to pay a tax. Please see a complete description of the requirements and a few examples of instances that do and do not qualify as reasonable cause (ARM 42.3.105).
Taxpayer Bill of Rights:
15-1-222, Montana Code Annotated
The Department of Revenue shall in the course of performing its duties in the administration and collection of the state's taxes ensure that:
•The taxpayer has the right to record any interview, meeting, or conference with auditors or any other representatives of the department;
•The taxpayer has the right to hire a representative of the taxpayer's choice to represent the taxpayer's interests before the department or any tax appeal board. The taxpayer has a right to obtain a representative at any time, except that the selection of a representative may not be used to unreasonably delay a field audit that is in progress. The representative must have written authorization from the taxpayer to receive from the department confidential information concerning the taxpayer. The department shall provide copies to the authorized representative of all information sent to the taxpayer and shall notify the authorized representative concerning contacts with the taxpayer.
•The taxpayer has the right to obtain tax advice from the department. The taxpayer has a right to the waiver of penalties and interest, but not taxes, when he has relied on written advice provided to him by an employee of the department.
•At the discretion of the department, the taxpayer has the right to pay delinquent taxes, interest, and penalties on an installment basis. This subsection applies only to taxes collected by the department, provided the taxpayer meets reasonable criteria.
•The taxpayer has the right to a complete and accurate written description of the basis for any additional tax assessed by the department;
•The taxpayer has the right to a review by management level employees of the department for any additional taxes assessed by the department;
•The taxpayer has the right to a full explanation of the available procedures for review and appeal of additional tax assessments;
•The taxpayer, after the exhaustion of all appropriate administrative remedies, has the right to have the state tax appeal board or a court, or both, review any final decision of the department assessing an additional tax. The taxpayer shall seek a review in a timely manner. A taxpayer is entitled to collect court costs and attorney fees from the department for frivolous or bad faith lawsuits as provided in 25-10-711.
•The taxpayer has the right to a full explanation of the department's authority to collect delinquent taxes, including the procedures and notices that are required to protect the taxpayer;
•The taxpayer has the right to have certain property exempt from levy and seizure as provided in Title 25, chapter 13, part 6, and any other applicable provisions in Montana law;
•The taxpayer has the right to the immediate release of any lien the department has placed on property when the tax is paid or when the lien is the result of an error by the department;
•The taxpayer has the right to assistance from the department in complying with state and local tax laws that the department administers; and
•The taxpayer has the right to be guaranteed that an employee of the department is not paid, promoted, or in any way rewarded on the basis of assessments or collections from taxpayers.
Office of Taxpayer Assistance FAQs
Tax Appeal Forms:
Request for Informal Review of State Taxes - APLS101F
If you object to your notice of assessment, refund reduction, or other determination or decision, you may request an informal review by the Department’s Business and Income Taxes Division. State law requires that your objection be in writing. For your convenience, Form APLS101F is available for you to complete and file your objection, but a separate written objection will be accepted provided that similar information is included.
Notice of Referral to the Office of Dispute Resolution - APLS102F
If you do not agree with the determination that the Business and Income Taxes Division makes as a result of its informal review, you will need to file this form within 15 days of the date of that determination. For your convenience, Form APLS102F is available for you to complete and file your appeal, but a separate written objection will be accepted provided that similar information is included.
Power of Attorney - POA
Use this form to authorize one or more individuals to represent you before the Department of Revenue. This authorization allows your representative(s) to receive and inspect confidential tax information and to act on your behalf in matters before the Department. Federal Form 2848 is also acceptable so long as it states “Montana” on the form. This power of attorney does not change the requirement that the Department send all official mailings directly to you, the taxpayer.
Applicable Administrative Rules:
The following administrative rules have been adopted to help provide guidance regarding the appeals process and the request for waiver of penalty and interest:
42.2.510: Review of Statement of Account Notices - This administrative rule details the applicable timelines for submitting an appeal and related information regarding the appeal process.
42.2.613 through 42.2.621: Dispute Resolution - These administrative rules provide information regarding the appeal to the Office of Dispute Resolution, including the timelines and the process involved.
42.3.101 through 42.3.120: Waiver of Penalty and Interest - These rules provide guidance regarding the waiver of penalty and interest, including what qualifies as “reasonable cause” for the consideration of a waiver. For example, 42.3.115 explains reasonable cause for waiver of the late payment penalty for amended tax returns and, also, for payment of debt within 30 days of the original Statement of Account.