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Frequently Asked Questions (FAQs)


Q. What are the normal channels of problem solving?

The department seeks to resolve all questions and problems at the lowest possible level, especially through the regular activities of staff working directly with citizens and our Call Center ((406) 444-6900.


You can call us to obtain answers to questions or to be referred to a staff person you have been working with.


Whether staff is responsible for processing returns, conducting audits, appraising property, maintaining records, collecting taxes due, or other work, all staff is expected to meet your needs in a respectful manner consistent with relevant laws, rules, and procedures. When staff members are unable to answer questions or resolve problems, those matters are typically referred to division supervisors or specialists or elevated by the taxpayer to the appeal process described above.


Take advantage of this process of having the people working directly with you address your concerns. You can do this by reading your mail from the department when it arrives and calling the staff listed in the correspondence. This is the surest way to answer your questions and maximize the help and flexibility the department can give you in addressing your problems and worries.

Q. I have been unable to resolve a tax problem through the department’s normal channels. Where do I go now?

The Office of Taxpayer Assistance is independent of the department’s divisions so it can provide impartial service. The office works to resolve taxpayer issues after the usual channels of problem solving have been exhausted or communications with the department have broken down. The office handles a taxpayer’s procedural issues or disputes with the service or inefficiency of the department, especially those concerning citizen rights guaranteed by the Taxpayer Bill of Rights. The office also receives complaints about improper or abusive behavior by an employee of the department. The office can help you understand the options and procedures available to resolve your issue. The office does not address issues of fact or law that are considered by the department’s Office of Dispute Resolution. Nor can the office change applications of law or grant relief from taxes that are legally due.

Q. How do I contact the Office of Taxpayer Assistance?

If you have a tax problem that is not in litigation or subject to enforcement action, and you have not been able to resolve the matter through normal channels, you may email Kristan Barbour, Office of Taxpayer Assistance, at kbarbour@mt.gov, call her at (406) 444-2762, or write to:

Office of Taxpayer Assistance
Montana department of Revenue
PO Box 5805, Helena, MT 59605-5805.

Q. What can I expect from the Office of Taxpayer Assistance?

The Taxpayer Assistance Officer will listen to your point of view and work with you to address your concerns. You can expect the Taxpayer Assistance Officer to provide you with:

• An impartial look at your problem;

• Timely acknowledgment;

• The name and phone number of the individual assigned to your case;

• Updates on progress;

• Time frames for action;

• Timely resolution;

• Courteous service; and

• Confidentiality of tax information.

Q. What information should I provide to the Office of Taxpayer Assistance?

Please provide the following information:

• Your name, address, and social security number or business tax registration number;

• Your telephone number and the hours you can be reached;

• Your previous attempts to solve the problem, and the person and office you contacted;

• The type of tax return and year(s) involved; and

• Description of the problem with any substantiating documentation.


If you want to authorize another person to discuss the matter with the agency, download Form POA - Power of Attorney, and send it to the Office of Taxpayer Assistance. However, we will continue to send all correspondence directly to the taxpayer.


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Other Information


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).


Learn more about Montana's Taxpayer Bill of Rights

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:


ARM 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.


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Tax Appeal Forms


Request for Informal Review (Form 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 (Form 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 (Form 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.


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About the Tax Appeal Process

Please note that this appeals process is in place for all tax types except for locally assessed property tax appeals. For information regarding the locally assessed property tax appeals process, please click here.


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.


Payment Options

If you decide not to dispute the assessment, but you do not believe that you have the financial ability to pay the assessment, you can call our Call Center at (406) 444-6900. They will direct you to a representative with the Collections Bureau to discuss payment options.


Representation

You are not required to hire a lawyer or other tax representative in order to participate in an appeal before the Montana Department of Revenue. You may represent yourself or you may have someone represent you at every stage of the department’s appeal proceedings.


If you appeal beyond the Montana Department of Revenue you will have to represent yourself or hire an attorney to represent you. CPAs or other representatives who are not attorneys are not allowed at the State Tax Appeal Board or in District Court.


Use the Power of Attorney (Form POA), to authorize one or more individuals to represent you before the Montana 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. This power of attorney does not change the requirement that Department send all official mailings directly to you, the taxpayer.


Constitutional Issues

As an administrative agency, the Montana Department of Revenue cannot decide constitutional issues. Constitutional issues are usually decided by a Montana district court, on appeal from a State Tax Appeal Board decision or, when exhaustion of administrative remedies is not required, in an original action filed in district court for that purpose. However, constitutional issues still should be raised in Department appeals. There are a number of reasons for this, including that the department and hearing examiner should understand all of a taxpayer’s concerns. Also, constitutional issues often involve mixed questions of fact and law, and an appeals court may find that a taxpayer has failed to exhaust administrative remedies if facts related to a constitutional challenge are not established in the administrative proceedings.


Appeals

If you disagree with a notice of assessment, notice of proposed disallowance of a claim for refund, or other determination or decision by the Montana Department of Revenue, you may file a written appeal. We will work with you to resolve any outstanding issues, but cannot disregard Montana tax laws in order to settle a dispute.

Step 1: Informal Review

If you object to your notice of assessment, refund reduction, or other determination or decision, you may appeal by requesting an informal review by the department’s Business and Income Taxes Division.

How do I file an objection to request an informal review?

Your objection must be in writing and filed within 30 days of the date on the notice of the action that you are challenging. If you do not file an objection within 30 days, we will consider it to be your admission that you agree with the adjustment.


For your convenience, Request for Informal Review (Form APLS101F), is available for you to complete and file your objection.


Email your objection to DORobjections@mt.gov or mail the objection and documentation to:

Montana Department of Revenue
PO Box 7149
Helena MT 59604-7149

Whether you use Form APLS101F or send a separate written objection, any written objection should clearly state all of the following:

• Your name and address;

• Your Montana Account Number;

• Your Social Security Number or Federal Employer Identification Number;

• Tax type, i.e. individual income tax, withholding tax, etc.;

• Taxable period or periods in dispute;

• A statement that you are appealing the notice of assessment, refund reduction, or other determination or decision; and

• A factual statement for each disputed issue that supports your position.


If you are requesting a waiver of penalties and/or interest, all of the following apply:

• You need to establish reasonable cause for the waiver. Please see the discussion and rule on reasonable cause.

• Reasonable cause for waiver of the late payment penalty automatically exists if you:

• Pay all tax and interest due, and

• Request the waiver in writing within 30 days of the date of your notice of an amount due.

• If you meet both of these qualifications, please check the Request for Waiver of Late Payment Penalty Only box on Form APLS101F.

There is a $500 limit per taxable period on the amount of interest that can be waived.

What happens after I file my objection with the department?

The Business and Income Taxes Division will review your objection and determine whether it agrees or disagrees with your concerns. The Division will mail notice of determination to you advising you of the Division’s determination within 30 days after receipt of your objection. If the Division fails to meet this deadline, the taxpayer may immediately refer the matter to the Office of Dispute Resolution.

A unit manager or tax specialist will conduct the review. The auditor who issued the assessment may provide information but will not make the determination on behalf of the Business and Income Taxes Division.

If the issue cannot be resolved at the division level, you may appeal to the Office of Dispute Resolution.

Important Items to Note

Interest and penalties will continue to accrue, as applicable, until the total tax due is paid in full, even if you file a written objection or appeal. Please consider paying the total amount due, which will stop additional interest and penalties from accruing. Making a payment will not waive your appeal rights.


Once you submit a timely appeal/objection, if you wish to provide additional information for the department to consider during the informal review, you may request an informal review meeting. To allow this meeting and a review of the additional information to take place, the department may need to extend the time it takes to issue its informal review determination.


Step 2: Office of Disupte Resolution (ODR)

Consistent with most federal and state agencies, the Department of Revenue retains an independent adjudicatory office, called the Office of Dispute Resolution. Its purpose is to render fair, objective, and unbiased decisions in tax disputes free from agency influence or direction.


The Hearing Examiner assigned to the office is not subject to performance ratings, promotions, demotions, or compensation based upon the number of times she or he decides in favor of the agency or the taxpayer. Along with all other agency hearing examiners, she or he assumes a unique status in state government. It is the Hearing Examiner's responsibility to render decisions based upon the record and evidence of each case. The decisions are expected to fully explain why one party or another prevails in any given dispute. The administrative rules pertaining to the Office of Dispute Resolution are ARM 42.2.613 through 42.2.621.

How can I file an appeal with the ODR?

Your appeal must be in writing and filed within 30 days of the date on the notice of determination regarding your informal review that you received from the Business and Income Taxes Division, as outlined above. If you do not file an objection within 30 days, the Department will consider this an admission that you agree with the adjustment.


For your convenience, an optional Notice of Referral to the Office of Dispute Resolution (Form APLS102F) is available for you to complete and file your appeal.


Email the appeal and documentation to DORDisputeResolution@mt.gov or mail to:

Montana Department of Revenue
PO Box 5805
Helena, MT 59604-5805

Whether you use Form APLS102F or send a separate written appeal, any written appeal should clearly state all of the following:

• Your name, address, and telephone number;

• Your Montana Account Number;

• Tax type, i.e. individual income tax, withholding tax, etc.;

• Taxable period or periods in dispute; and

• A written explanation of the basis for your objection.

What happens after you file your appeal with the ODR?

1. Initial Conference


In any matter before the Department of Revenue, you or your representative will be required to appear before the Office of Dispute Resolution by telephone for an initial conference. An order setting such a conference will be issued after an appeal is filed with the ODR. Conferences are held for the purposes of potentially scheduling a hearing and other relevant dates, clarifying issues, discussing evidence, reviewing the possibility of mediation, and expediting the proceedings in any way satisfactory to both parties. An order is issued from each conference confirming what was discussed and agreed upon, including a hearing, a decision on the record, or a mediation date.


2. Hearings


The Hearing Examiner has the discretionary authority to determine the level of formality in tax hearings. Every effort is made to make such proceedings as unintimidating and inexpensive as possible for taxpayers. While taxpayers may be represented by a lawyer, accountant, or tax practitioner, such representation is entirely up to them. Individual taxpayers have often represented themselves very successfully. If both parties are represented by lawyers, and if larger amounts of liability are involved, applying rules of evidence and civil procedure may be warranted. Testimony at hearings is taken under oath. The parties can introduce evidence, and cross-examine opposing parties or witnesses on any testimony or evidence offered. By law, such hearings are either conducted in Helena or by telephone. All hearings are recorded, and a copy of the recording will be provided if requested.


Any tax decision issued from the Office of Dispute Resolution is a final agency decision. The Office of Dispute Resolution’s decision may be appealed to the Montana State Tax Appeal Board, as outlined below.


3. Mediation Process


The Office of Dispute Resolution can also mediate disputes if both parties agree, and are both willing to make movement indicating that a mediated settlement is feasible. The parties may also agree to select a mediator outside the Office of Dispute Resolution, but must pay for the mediator.


The mediation process is intended to allow the parties to meet with a mediator who will facilitate the discussion. During this process, the parties can discuss all of the evidence that is available to that point and, with the assistance of the mediator, work toward a satisfactory settlement that may resolve the issues pending on appeal. If the parties settle and execute a settlement agreement, they are bound by the agreement.

If you do not agree with the decision issued by the Office of Dispute Resolution, you may appeal to the Montana State Tax Appeal Board.


Step 3: The Montana State Tax Appeal Board (MTAB)

The State Tax Appeal Board is a three member independent review board, separate from the Department of Revenue. Members are appointed by the Governor for six-year terms.


An appeal to the State Tax Appeal Board must be made within 30 days of a final department decision.


When making such an appeal to this board, please be sure to include a copy of the final department decision and a copy of the hearing examiner's findings of fact and conclusions of law, if any. The complaint itself can be in the form of a letter containing a brief statement of the issue.


The board will issue a written decision after hearing the appeal. Either you or the Department may seek judicial review. Judicial review must be sought within 60 days of the date of the decision of the State Tax Appeal Board.


If you appeal beyond the Department of Revenue you will have to represent yourself or hire an attorney. No non-attorney representation is allowed at the State Tax Appeal Board or in District Court. A corporation is an entity and generally must have qualified representation.


Learn more about on the Montana State Tax Appeal Board website.

If you do not agree with the decision issued by the State Tax Appeal Board, you may appeal to the Montana District Court.


Step 4: Montana District Court

For information about the Montana District Court system, please visit their website.

If you do not agree with the decision that the Montana District Court issues, you may appeal to the Montana Supreme Court.


Step 5: Montana Supreme Court

For information about the Montana Supreme Court, please visit their website.