PS 92(4.2)

Your Rights As a Connecticut Taxpayer

This publication has been superseded by PS 99(4)

OUR MISSION STATEMENT

The Mission of the Connecticut Department of Revenue Services is to administer the tax laws of the State of Connecticut and collect the tax revenues in the most cost effective manner; achieve the highest level of voluntary compliance through accurate, efficient and courteous customer services; and perform in a manner which instills public confidence in the integrity and fairness of the state's tax programs.

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PURPOSE

We at the Department of Revenue Services work hard to enforce Connecticut tax laws so that honest taxpayers do not have to pay more than their fair share.

This Policy Statement discusses some general rules and procedures, including those provided for in the Connecticut Taxpayer Bill of Rights. It explains the audit, appellate, billing and collection procedures. It also explains how to obtain more information and assistance in complying with Connecticut tax laws. We encourage you to learn about your rights and to exercise them to the fullest.

We are committed to providing quality service to Connecticut taxpayers. We continually strive to improve our programs and processes so that you may have confidence in the integrity, efficiency and effectiveness of the Connecticut tax system. We are trained professionals whose performances are evaluated on the basis of the quality of service that we provide. We are not paid, evaluated or promoted based upon the amount of taxes that we assess or collect.

If you believe that you have not been treated professionally, fairly or courteously by any of us, please contact our Problem Resolution Office at 860-297-5603.

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PRIVACY AND CONFIDENTIALITY

By law, we must and do protect the privacy of your tax information. We may, however, in accordance with reciprocal agreements with other jurisdictions, disclose your tax information to the revenue departments of other states and to the Internal Revenue Service. We may also disclose your tax information to other Connecticut state agencies, upon their request, if you appear to be violating a law that those agencies are responsible for enforcing.

You have the right to know why we are asking you for information, and what might happen if you do not provide that information.

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REPRESENTATION

Throughout your dealings with us, you can represent yourself or you can designate an authorized employee of yours to represent you. With proper written authorization, you can also have an attorney, accountant, enrolled agent or other person, such as a family member, represent you. Your representative may receive or inspect confidential information as long as you have completed and provided a Form LGL-001, Power of Attorney, to us. This form is available from our Forms Unit.

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ABOUT YOUR TAX BILL STATEMENTS

Whenever you owe additional tax, we will send you a bill stating the amounts you owe in tax, interest and penalties. If you believe that the bill is incorrect, please call the telephone number listed on the bill. When writing to us, please be sure to include your Connecticut tax registration number or social security number.

INTEREST

You must pay interest on any additional tax that you owe. Interest accrues from the due date of your payment until the bill is paid. Payment will not affect your appeal rights.

PENALTIES

The most common penalties are imposed for filing a return late or for paying taxes late. Certain other penalties may be imposed as a result of an audit. These include penalties for negligence, and for fraud or intent to evade tax. These penalties will be explained fully during the audit if they are imposed.

If you believe there are special circumstances that warrant waiving the penalty imposed, you may request a waiver of penalty. To do so, write to the Penalty Review Committee, 25 Sigourney Street, Hartford CT 06106-5032. Indicate the reason you believe the penalty should not be imposed and provide copies of any supporting documents. Please note that all tax and interest must be paid before your request will be considered.

PAYMENTS

Payments may be made to "Commissioner of Revenue Services" by personal check, cashiers check or money order. Cash payments are accepted only at our Hartford office, but should not be mailed. Generally, partial payments are applied first to penalty, then to interest, and then to tax.

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THE AUDIT PROCESS INTRODUCTION

We accept most Connecticut tax returns as filed. However, our Audit Division does examine some of these returns. If your return is selected for audit, it does not mean that we believe you made an error or are dishonest. Returns are chosen by computerized audit selection programs or by random sample. Some returns are audited because of information developed in another audit, or information received from another state agency, the federal government, or another state's revenue department.

IF YOU ARE AUDITED

If we inquire about your return or select it for audit, you will not necessarily have to pay more tax. We may close your case without change, or you may receive a refund. Connecticut tax audits are conducted by our revenue examiners. They may be conducted through the mail, at our office, at your place of business or sometimes at the office of your attorney or accountant. Our examiners will try to schedule times and places for the audit that are convenient for you.

CONSENT TO EXTEND THE STATUTE OF LIMITATIONS

We make every effort to perform audits efficiently. In most cases, returns for several years are audited at the same time to minimize the disruption of your business. There are laws that limit the time that we have to audit your return and that limit the time that you have to amend your return. These laws are referred to as statutes of limitation.

Some examinations, however, take longer than the time allowed by the statute of limitations. If we need additional time, we will request that you sign an agreement, commonly referred to as a waiver, extending the time within which we can audit your return. In general, this agreement also extends the time within which you can amend your return.

The waiver, which can vary depending on the tax and the circumstances of the audit, establishes the conditions upon which we have agreed. The amount of time granted in the waiver may be extended if we both agree. This must be done before the expiration date of the original waiver.

You are not required to sign the waiver but if you choose not to sign it, we may propose an adjustment based on the information available to us at that time. This may cause you to pay more tax.

OFFICE AUDITS

Most office audits are handled through the mail. We will write to you requesting more information or stating a reason why we believe your return should be changed. We will fully explain the reasons for any adjustments. If we cannot resolve your questions by mail or telephone, you may request a meeting with us.

FIELD AUDITS

Most field audits are conducted at your place of business and usually begin when we notify you that your return has been selected. We will tell you which records you will need to show us. If we propose any changes to your return, we will explain, in writing, to you or your authorized representative, the reasons for the changes. It is important that you understand the reasons for any proposed change. You should not hesitate to ask about anything that is unclear to you.

TECHNICAL ADVICE MEMORANDA

If you dispute the interpretation and application of certain Connecticut tax statutes during a field audit, you may request a technical advice memorandum from our Legal Division. We will tell you whether the dispute involves an issue concerning which a technical advice memorandum may be requested. You may request a copy of PS 95(1.1), Procedures in Handling Requests for Issuance of Technical Advice Memoranda, for more information.

COMPLETING THE AUDIT

At the conclusion of the audit you will receive a copy of the Tax Determination Report and the pertinent audit work papers. You should keep this report with your tax records. The work papers describe the basis of the audit changes. The report summarizes all adjustments made on the work papers. It will also show the amount of tax, interest and penalty due.

If you agree to the changes proposed by our Audit Division, your audit will be processed and you will receive an official billing notice (even if the balance is $0.00). You should keep a copy of this notice with your financial records.

INFORMAL CONFERENCES

If you disagree with the proposed changes, you may request an informal conference with representatives of our Audit Division. Most differences can be settled within this system. However, we cannot disregard Connecticut tax law in order to settle a disagreement.

If you want an informal conference, you may contact the manager or supervisor in the office that conducted the audit. You must request the informal conference by the date indicated on the Tax Determination Report. You must also clearly set forth the reasons why you disagree with the audit findings. At the informal conference, you should be prepared to discuss all disputed issues and to submit all documentation necessary to support your position.

At the completion of the informal conference, adjustments, if any, will be made to the audit assessment. The audit will then be processed and forwarded to our main office so that an official notice of assessment may be issued.

AUDIT ASSESSMENT PAYMENTS

Between the time you receive the Tax Determination Report and the official notice of assessment, one or more months of additional interest charges may accrue. To avoid additional interest, you may make an advance payment on the audit assessment. To do so, you should include a copy of the Tax Determination Report, and mail the full payments to:

Department of Revenue Services, Audit Division

DEPOSIT IN THE NATURE OF A CASH BOND

If you object to the audit assessment and wish to minimize the accrual of interest, you may make a deposit in the nature of a cash bond. By doing so, you are not agreeing with the assessment, nor are you giving up your appeal rights.

To make a deposit, you must file Form APL-004, Deposit in the Nature of a Cash Bond. This form is available from our Appellate Division. You may call our Appellate Division at 860-297-4775 for assistance in completing the form.

The deposit may be made after you receive a notice of assessment from us, and before:

1. the expiration of the time period for contesting the assessment, or
2. the entry of an order by the superior court upholding the assessment, whichever is later.

You may request a return of all or part of the deposit during the same time period during which you could make the deposit. The return of the deposit will be denied only if we determine that the collection of the tax would be in jeopardy. You will not receive interest on any portion of the bond that is returned.

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THE APPEAL PROCESS

Most differences can be settled during the audit process; however, if you still disagree with the audit findings, you may request a formal hearing with our Appellate Division. Like our Audit Division, our Appellate Division will work with you to resolve any outstanding issues, but it cannot disregard Connecticut tax laws in order to settle a dispute. Interest will continue to accrue on your tax liability while your disagreement is being considered by our Appellate Division. You can minimize the accrual of interest by making a deposit in the nature of a cash bond. (See Deposit in the Nature of a Cash Bond.)

To request a hearing write to:

When we receive your hearing request, we will send you a letter acknowledging its receipt. Your case will then be assigned to an Appellate Officer who will contact you to schedule a hearing. You will have the opportunity to provide information you believe will help resolve your case. The Appellate Officer will consider all information and make a decision as to your final liability. You will then receive a Final Determination Letter explaining the statutory authority for our decision.

Your request for a hearing must be received within sixty (60) days, or must bear a U.S. postmark that is within sixty (60) days from the date of the first formal billing notice and must clearly state in writing:

• your name and address
• your tax registration number or social security number
• audit control number
• tax type
• audit (tax) period
• a statement indicating your intent to appeal the audit findings
• a description of the disputed issues
• an itemized and detailed explanation of the adjustments with which you disagree, and
• a factual statement for each disputed issue that supports your position; include the law or other authority on which you rely.

If the assessment is not settled to your satisfaction by our Appellate Division, you may take your case to the superior court within one month of receiving the Final Determination Letter from our Appellate Division.

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THE COLLECTION AND ENFORCEMENT PROCESS

INTRODUCTION

Our Collection and Enforcement Division is responsible for ensuring that unfiled tax returns are filed and unpaid tax liabilities are paid.

The Division employs a collection strategy that includes written, telephone and personal contact. You may receive letters or telephone calls from our agents, depending upon the type, amount and age of your liability.

PAYMENT ARRANGEMENTS

You should make every effort to pay your Connecticut taxes in full. If you cannot pay in full, you should pay as much as you can and contact us right away. Our employees are trained to work with you to resolve your tax obligations in a fair and equitable manner.

If you realize during the Audit or Appellate process that you will be unable to pay your taxes in full, you may ask the Examiner or Appellate Officer to contact the Collection and Enforcement Division to begin the installment payment plan process.

Depending upon your financial condition, you may qualify for an installment payment plan. A tax lien may be placed on your property to secure the states ability to collect your tax obligation, even if an installment plan is approved.

You will be required to make a full financial disclosure to enable us to determine if a hardship exists. You may also be asked to seek financing from a bank or lending institution before we approve an installment payment plan.

If we do approve your request for an installment payment plan, the plan will stay in effect only if:

• you provide accurate, correct and complete financial information;
• you pay each installment on time;
• you pay your future tax obligations when they become due; and
• you provide up-to-date financial information when requested.

Our acceptance of your request for an installment plan will be based upon current Department policies. The payment terms may be altered if a review of your current financial records discloses a change in your financial condition, or if new Department policies are established. If your installment plan is modified, you will be notified why and will have thirty (30) days before any changes become effective.

ENFORCEMENT ACTION

We will not take any enforcement action that requires a tax levy, seizure of assets, or the filing of a tax lien until we have tried to contact you. We want to offer you the opportunity to pay your tax obligations voluntarily. It is very important that you immediately respond to our attempts to contact you. If you do not respond, we may have no choice but to begin enforcement action. Generally we will give you thirty (30) days' notice of our intent to take civil enforcement action. If you fully pay your tax obligation within that thirty day period, no enforcement action will be taken. However, if you resolve one obligation and incur another, we will continue with collection enforcement activities.

In some situations, we are forced to estimate and assess what your tax obligations are for particular periods. These assessments are called jeopardy assessments. Should you be so assessed, you may request an immediate review and may obtain a stay of collection of all or any part of the jeopardy assessment. However, you will be required to post a security deposit during the review process.

Certain tax violations are subject to criminal penalties. These types of violations are subject to immediate enforcement action.

DETERMINATIONS

Determinations made in the Collection and Enforcement Division include Corporate Officer and Successor Liability Assessments and Jeopardy Assessments. You have the right to appeal these decisions. (See Appeal Process.)

TAX LIENS

Liens may be recorded against your real and personal property. Upon full payment of your tax obligations, we will issue you a Certificate of Release. You are responsible for having the Certificate of Release recorded. You have the right to question the filing of a tax lien. If you believe it was placed in error, you may request that a lien be canceled, released or modified. If we find the lien was placed in error, we will release the lien and issue a statement indicating it was placed in error.

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TAXPAYER SERVICES

You have the right to receive available information and to be provided with prompt, accurate responses to questions about Connecticut taxes. Our Taxpayer Services Division provides walk-in and telephone assistance to taxpayers at all of our locations throughout the state. Our toll-free telephone service is available throughout Connecticut. We also offer workshops and seminars that help explain business and individual taxes, and we provide informative publications, as well as tax forms and basic instructions to assist taxpayers.

TAX RETURN COPIES

If you require a copy of a previously filed tax return, it may be obtained by completing Form LGL-002, Request for Disclosure of Tax Return or Tax Return Information. This form is available from our Forms Unit and must be completed in order for us to release a copy of your return. You may request a copy of IP 96(12), Q & A Concerning Requests for Disclosure of Tax Returns and Tax Return Information.

PROBLEM RESOLUTION OFFICE

We have a Problem Resolution Office to provide special help for taxpayers who have been unable to resolve their problems or complaints through normal channels. If you have a tax problem that is not in litigation or subject to enforcement action, and you are unable to resolve the matter through normal channels, call us at 860-297-5603 or write to:

The Problem Resolution Office cannot change or ignore Connecticut tax laws, but may be able to help you solve administrative or procedural problems.

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FOR FURTHER INFORMATION

To reach CONN-TAX, the DRS tax information line, call 860-297-5962 (Hartford area or out-of-state) or 1-800-382-9463 (in-state only). Touch tone callers have six choices:

• Information on the status of your income tax refund (Press 1)*
• Recorded income tax information (Press 2)*
• Order forms and publications (Press 3)*
• Information on a billing notice or past due return (Press 4)
• Recorded sales tax information (Press 5)
• Speak with a Taxpayer Services representative (during business hours) (Press 0) * 24 hour service

If you are calling from a rotary dial phone, you can reach us during business hours.

TDD/TT: (Hearing-impaired only) 860-297-4911

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EFFECTIVE DATE: Effective upon issuance.

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EFFECT OF THIS DOCUMENT: An Informational Publication (IP) is a document that addresses frequently-asked questions about a current Department position, policy or practice, usually in a less technical, question-and-answer format.

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EFFECT ON OTHER DOCUMENTS: PS 92(4.1) is superseded and may not be relied upon on or after the date of issuance of this Informational Publication.

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PS 92(4.2)
All taxes
Issued: 12/30/96
Supersedes PS 92(4.1) issued 10/20/95