Alaska Corporate Income Tax Protest Letter

ALASKA CORPORATE INCOME TAX PROTEST AND REQUEST FOR INFORMAL CONFERENCE

TABLE OF CONTENTS

1. Letterhead, Addressee, and Identification
2. Statement of Protest and Statutory Basis
3. Taxpayer Information
4. Assessment Identification
5. Issues Under Protest
6. Statement of Facts
7. Legal Argument
8. Apportionment / Oil & Gas Overlay
9. Relief Requested
10. Reservation of Rights
11. Power of Attorney and Designation of Representative
12. Verification
13. Certificate of Service
14. Alaska Practice Notes
15. Sources and References

1. LETTERHEAD, ADDRESSEE, AND IDENTIFICATION

[LAW FIRM / TAXPAYER LETTERHEAD]

Date: [__/__/____]

VIA CERTIFIED MAIL — RETURN RECEIPT REQUESTED
AND VIA EMAIL TO [email protected] (where authorized)

Alaska Department of Revenue — Tax Division
Attn: Appeals Officer / Informal Conference Unit
550 West Seventh Avenue, Suite 500
Anchorage, AK 99501-3555

Re: PROTEST AND REQUEST FOR INFORMAL CONFERENCE
Taxpayer: [CORPORATE TAXPAYER NAME]
FEIN: [__-_______]
Alaska Account No.: [________________________________]
Tax Type: Alaska Corporate Net Income Tax (AS 43.20)
Tax Year(s): [YYYY — YYYY]
Notice of Assessment No.: [________________________________]
Notice Mailing Date: [__/__/____]

2. STATEMENT OF PROTEST AND STATUTORY BASIS

Pursuant to AS 43.05.240(a) and 15 AAC 05.001 et seq., [TAXPAYER NAME] ("Taxpayer") timely files this written protest and requests an informal conference with an Appeals Officer of the Alaska Department of Revenue, Tax Division ("Department"), to dispute the Notice of Assessment identified above. This protest is filed within sixty (60) days of the mailing date of the Notice of Assessment and is therefore timely.

Taxpayer requests:

• A. Access to the Taxpayer's complete file as provided by AS 43.05.240(a);
• B. A scheduled informal conference at which Taxpayer may appear by counsel and present argument and evidence;
• C. Withdrawal or abatement of the assessment in whole or in part as set forth in Section 9 below;
• D. Preservation of all rights to formal hearing before the Office of Administrative Hearings ("OAH") under AS 43.05.241 and AS 43.05.405–.499, and to judicial review thereafter.

3. TAXPAYER INFORMATION

4. ASSESSMENT IDENTIFICATION

A copy of the Notice of Assessment, the Revenue Agent's Report (RAR) or audit narrative, and Taxpayer's filed return(s) for the period(s) at issue are attached as Exhibits A–C.

5. ISSUES UNDER PROTEST

Taxpayer protests the following specific adjustments (each addressed in Sections 6–8):

1. [ISSUE 1 — e.g., Disallowance of intercompany interest deduction under AS 43.20.021 / I.R.C. § 163(j) conformity]
2. [ISSUE 2 — e.g., Adjustment to apportionment factors under AS 43.20.144 (oil and gas)]
3. [ISSUE 3 — e.g., Inclusion of foreign affiliate income contrary to water's-edge election under AS 43.20.145]
4. [ISSUE 4 — e.g., Imposition of negligence penalty under AS 43.05.220(a)(3)]
5. [ADD ADDITIONAL ISSUES AS NEEDED]

6. STATEMENT OF FACTS

6.1. Taxpayer is a [corporation / oil and gas producer / pipeline carrier] doing business in Alaska within the meaning of AS 43.20.011 and 15 AAC 20.

6.2. For the tax years at issue, Taxpayer timely filed Form [6000 / 6100 / 6150] and paid all tax shown thereon.

6.3. On [__/__/____], the Department issued a Notice of Proposed Adjustment / Information Document Request ("IDR"). Taxpayer responded on [__/__/____] with the materials identified in Exhibit D.

6.4. On [__/__/____], the Department issued the Notice of Assessment now under protest.

6.5. The relevant federal treatment is reflected in Taxpayer's federal Form 1120 for the same period(s), attached as Exhibit E, and any IRS Revenue Agent's Report concerning the same period is attached as Exhibit F.

6.6. [ADDITIONAL OPERATIVE FACTS — describe the business transactions, intercompany flows, North Slope operations, pipeline tariffs, or other facts material to each issue.]

7. LEGAL ARGUMENT

7.1. Issue 1 — [CAPTION]

[STATE THE LEGAL POSITION. Cite AS 43.20, applicable I.R.C. provision incorporated by AS 43.20.021 (Alaska conforms to the Internal Revenue Code as amended), the relevant 15 AAC 20 regulation, and any Alaska Supreme Court or OAH precedent.]

Authorities relied upon:

• AS 43.20.021 (federal conformity)
• 15 AAC 20.[___]
• Tesoro Corp. v. State, Dep't of Revenue, 312 P.3d 830 (Alaska 2013) (apportionment / unitary business)
• Union Oil Co. of Cal. v. State, Dep't of Revenue, 560 P.2d 21 (Alaska 1977)
• [ADDITIONAL AUTHORITIES]

7.2. Issue 2 — [CAPTION]

[ARGUMENT]

7.3. Issue 3 — [CAPTION]

[ARGUMENT]

7.4. Penalty Abatement

The negligence and/or substantial-understatement penalties imposed under AS 43.05.220 should be abated for reasonable cause. Taxpayer relied in good faith on [professional advice / prior Department guidance / a substantial-authority position], satisfying the standards in 15 AAC 05.210 and analogous to Treas. Reg. § 1.6664-4.

8. APPORTIONMENT / OIL & GAS OVERLAY

8.1. Taxpayer is an [oil and gas producer / pipeline carrier] subject to the modified apportionment regime of AS 43.20.144. Under that statute, business income is apportioned using a three-factor formula incorporating (i) a tariff or sales factor, (ii) a property factor, and (iii) an extraction factor based on barrels of oil and Mcf of gas produced in Alaska versus everywhere.

8.2. The Department's adjustment to the [extraction / tariff / property] factor is incorrect because [STATE BASIS — e.g., the Department included non-Alaska BOE in the denominator contrary to 15 AAC 20.420; or the Department excluded qualifying TAPS tariff revenue].

8.3. The interaction with the AS 43.55 oil and gas production tax (separately administered by the Production Audit Group) is reflected in Exhibit G. Pursuant to AS 43.20.144(b), production tax paid under AS 43.55 is not added back to federal taxable income for AS 43.20 purposes.

8.4. Taxpayer reserves the right to coordinate this protest with any pending AS 43.55 production-tax informal conference and requests that the Department consolidate the proceedings to the extent permitted by 15 AAC 05.

9. RELIEF REQUESTED

WHEREFORE, Taxpayer respectfully requests that the Department:

• A. Withdraw or abate the assessment in the amount of $[________] representing the disputed adjustments described herein;
• B. Recompute interest under AS 43.05.225 to reflect the abated tax;
• C. Abate all penalties for reasonable cause under AS 43.05.220 and 15 AAC 05.210;
• D. Issue a written informal conference decision under AS 43.05.240 setting forth findings of fact and conclusions of law;
• E. Refund any overpayment under AS 43.05.275, with statutory interest; and
• F. Grant such other and further relief as is just and proper.

10. RESERVATION OF RIGHTS

10.1. Taxpayer reserves all rights to appeal an adverse informal conference decision to the Office of Administrative Hearings under AS 43.05.241 within 30 days, and thereafter to the Superior Court under AS 43.05.480.

10.2. Taxpayer reserves the right to amend or supplement this protest, to raise additional issues, and to introduce additional evidence at the informal conference.

10.3. Nothing herein shall be construed as a waiver of any defense, including statute of limitations under AS 43.05.260, federal preemption, due-process, equal-protection, or Commerce Clause challenges.

10.4. Taxpayer ☐ DOES / ☐ DOES NOT consent to extension of the assessment period under AS 43.05.260(c)(3).

11. POWER OF ATTORNEY AND DESIGNATION OF REPRESENTATIVE

Taxpayer designates the following individual(s) as authorized representative(s) under 15 AAC 05.030 and Form 04-775 (Alaska Power of Attorney), filed herewith as Exhibit H:

All correspondence regarding this matter should be directed to the representative above.

12. VERIFICATION

I, [OFFICER NAME], [TITLE] of [TAXPAYER NAME], declare under penalty of perjury under the laws of the State of Alaska that I am authorized to execute this protest on behalf of Taxpayer; that I have read the foregoing; and that the facts stated herein are true and correct to the best of my knowledge, information, and belief.

Executed this [____] day of [_______________], 20[____], at [CITY, STATE].

[________________________________]

[OFFICER NAME, TITLE]

13. CERTIFICATE OF SERVICE

I certify that on [__/__/____] I caused a copy of this Protest and Request for Informal Conference, with all exhibits, to be served on the Alaska Department of Revenue, Tax Division, by certified U.S. Mail, return receipt requested, addressed as set forth in Section 1, and by email to [ASSIGNED AUDITOR / APPEALS UNIT] where authorized.

[________________________________]

[REPRESENTATIVE NAME]

14. ALASKA PRACTICE NOTES

• No personal income tax. Alaska is one of the few states with no personal income tax; AS 43.20 applies only to entities taxed as C corporations for federal purposes. Pass-through income flowing to individuals is NOT subject to Alaska income tax. Confirm entity classification before filing any income-tax protest.
• 60-day informal conference deadline. AS 43.05.240(a) requires the protest within sixty days of the mailing date of the Notice of Assessment. The deadline is jurisdictional; late filings forfeit administrative remedies.
• Informal conference is mandatory before OAH. A taxpayer must complete the informal conference under AS 43.05.240 before appealing to the Office of Administrative Hearings under AS 43.05.241. Direct OAH appeals are not permitted.
• OAH formal hearing. AS 43.05.405–.499 vest the Chief Administrative Law Judge with original jurisdiction over formal tax appeals. Evidence and procedure follow AS 44.62 (Administrative Procedure Act) and OAH rules. Decisions are subject to commissioner review under AS 43.05.465 and judicial review in Superior Court under AS 43.05.480.
• Burden of proof. The taxpayer generally bears the burden of proving the assessment is erroneous (15 AAC 05.030(g)). Prepare workpapers and witness declarations accordingly.
• Pay-to-play not required. Alaska does not generally require prepayment as a condition of administrative protest, but interest accrues under AS 43.05.225 during the dispute. Consider a "deposit in the nature of a cash bond" to stop interest if the issue is likely to be lost.
• Statute of limitations. AS 43.05.260 generally provides a three-year period from the later of the return due date or filing date, extended to six years for substantial omissions and unlimited for fraud or no return. The period may be extended by written consent.
• Confidentiality. All protest materials are confidential under AS 40.25.100 and AS 43.05.230. Mark exhibits accordingly.
• Oil and gas / pipeline carriers. AS 43.20.144 modifies the standard Multistate Tax Compact apportionment (AS 43.19) using extraction and tariff factors. Coordinate any AS 43.20 protest with parallel AS 43.55 production-tax issues, which are handled by the Tax Division's separate Production Audit Group with overlapping but distinct procedures.
• Federal RAR conformity. Alaska conforms to the Internal Revenue Code (AS 43.20.021) and accepts most federal audit adjustments. Final federal determinations must be reported under AS 43.20.030(d) within 60 days; failure to report can extend the Alaska statute of limitations.

15. SOURCES AND REFERENCES

• Alaska Statutes Title 43 (Revenue and Taxation) — https://www.akleg.gov/basis/statutes.asp
• AS 43.20 (Alaska Net Income Tax Act) — https://law.justia.com/codes/alaska/title-43/chapter-20/
• AS 43.20.144 (Oil & Gas / Pipeline apportionment) — https://law.justia.com/codes/alaska/title-43/chapter-20/article-2/section-43-20-144/
• AS 43.05.240 (Taxpayer remedies) — https://law.justia.com/codes/alaska/title-43/chapter-05/article-3/section-43-05-240/
• AS 43.05.241 (Administrative appeal to OAH) — https://law.justia.com/codes/alaska/title-43/chapter-05/article-3/section-43-05-241/
• AS 43.05.260 (Limitation on assessment) — https://codes.findlaw.com/ak/title-43-revenue-and-taxation/ak-st-sect-43-05-260/
• AS 43.05.275 (Credit and refund claims) — https://law.justia.com/codes/alaska/2011/title43/chapter43-05/sec-43-05-275/
• Alaska Department of Revenue — Tax Division — https://tax.alaska.gov/
• Alaska Office of Administrative Hearings — https://aws.state.ak.us/OAH/
• Alaska Administrative Code (15 AAC 05; 15 AAC 20) — https://www.akleg.gov/basis/aac.asp
• Tesoro Corp. v. State, Dep't of Revenue, 312 P.3d 830 (Alaska 2013)
• Union Oil Co. of Cal. v. State, Dep't of Revenue, 560 P.2d 21 (Alaska 1977)

Disclaimer: This template is provided for informational purposes only and does not constitute legal or tax advice. An attorney or CPA licensed in Alaska must review and customize this document before filing. Statutory citations, regulations, and Department procedures change frequently; verify all authorities before use.