DC Income Tax Protest Letter — OTR / OAH Appeal

DISTRICT OF COLUMBIA INCOME TAX PROTEST — OTR / OAH APPEAL

TABLE OF CONTENTS

1. Caption and Filing Information
2. Introduction and Statement of Timeliness
3. Statement of Facts
4. Issues Presented
5. Argument
6. Relief Requested
7. Reservation of Rights
8. Verification
9. Certificate of Service
10. DC Practice Notes
11. Sources and References

1. CAPTION AND FILING INFORMATION

DISTRICT OF COLUMBIA

OFFICE OF ADMINISTRATIVE HEARINGS

441 4th Street NW, Suite 450N, Washington, DC 20001

OAH Case No.: [________________________________] (assigned upon filing)

OTR Notice No.: [________________________________]

Notice Date: [__/__/____]

Tax Type: ☐ DC Individual Income Tax (D-40) ☐ Unincorporated Business Franchise Tax (D-30) ☐ Withholding ☐ Other: [________________________________]

Tax Period(s) at Issue: [________________________________]

Total Amount in Dispute: $[________________________________] (tax $[____]; penalty $[____]; interest $[____])

PETITION FOR HEARING AND PROTEST OF PROPOSED ASSESSMENT (D.C. Code § 47-4312)

2. INTRODUCTION AND STATEMENT OF TIMELINESS

Petitioner [TAXPAYER NAME] (the "Taxpayer"), by and through undersigned counsel, hereby files this Protest of the Proposed Assessment of Tax Deficiency dated [__/__/____] (the "Notice") issued by the District of Columbia Office of Tax and Revenue ("OTR"), and petitions the Office of Administrative Hearings ("OAH") for a hearing pursuant to D.C. Code § 47-4312.

2.1. Timeliness. The Notice was sent on [__/__/____]. This Protest is filed within thirty (30) calendar days of that date as required by D.C. Code § 47-4312(a). A copy of this Protest is being served simultaneously on the Mayor through OTR's General Counsel at the address shown on the Notice.

2.2. Election of Forum. By filing this Protest with OAH, Taxpayer elects OAH as the forum for adjudication of the proposed assessment under D.C. Code § 47-4312, in lieu of pre-payment appeal to the Superior Court of the District of Columbia, Tax Division, under D.C. Code § 47-3303.

2.3. Stay of Collection. Pursuant to OTR practice and D.C. Code § 47-4312(c), the timely filing of this Protest stays collection of the disputed deficiency, interest, and penalties during the pendency of these proceedings.

3. STATEMENT OF FACTS

3.1. Taxpayer. Taxpayer is [an individual resident of / a domiciliary of / an unincorporated business doing business in] the District of Columbia, FEIN/SSN ending in [____], with a principal address at [ADDRESS].

3.2. Returns Filed. Taxpayer timely filed Form [D-40 / D-30 / D-40B] for tax year(s) [YEAR(S)] on [__/__/____], reporting District taxable income of $[AMOUNT] and a tax liability of $[AMOUNT].

3.3. OTR Audit / Adjustment. On [__/__/____], OTR commenced [a desk examination / a field audit] of Taxpayer's return(s). OTR issued [Information Document Requests / a Notice of Proposed Adjustment] on [DATES], to which Taxpayer responded on [DATES].

3.4. The Proposed Assessment. On [__/__/____], OTR issued the Notice proposing to assess additional tax of $[AMOUNT], accuracy/late-filing penalties of $[AMOUNT], and interest of $[AMOUNT], based on the following adjustments:

3.5. Substantive Background. [Describe the operative facts that establish the taxpayer's position — e.g., domicile and residency facts, source-of-income facts, ordinary-and-necessary business expense substantiation, character of receipts, apportionment data, statutory exemption qualification, or non-resident status. Be specific and tie each fact to documentary evidence.]

3.6. Records and Substantiation. Taxpayer maintains contemporaneous records, including [bank statements, invoices, contracts, mileage logs, K-1s, federal returns, etc.], which support the positions taken on the original return(s). Copies are attached or available for in-camera review at hearing.

4. ISSUES PRESENTED

4.1. Whether OTR correctly determined that [ISSUE 1 — e.g., Taxpayer was a District statutory resident under D.C. Code § 47-1801.04(17) for tax year XXXX].

4.2. Whether OTR correctly disallowed [ISSUE 2 — e.g., $XX,XXX in deductions claimed under D.C. Code § 47-1803.03].

4.3. Whether the imposition of accuracy-related, negligence, or late-filing penalties is supported by clear and convincing evidence and not subject to the reasonable-cause defense under D.C. Code § 47-4221.

4.4. Whether interest has been correctly computed under D.C. Code § 47-4201.

5. ARGUMENT

5.1. Burden of Proof.

Under DC tax practice, OTR's proposed assessment is presumed correct, but the presumption is rebuttable upon Taxpayer's production of credible evidence to the contrary. See D.C. Code § 47-4312; 1 DCMR § 2822. Once Taxpayer comes forward with substantiation, the burden shifts to OTR to support its adjustments.

5.2. Issue 1 — [Substantive heading].

[Develop the legal argument. Cite the controlling DC statute (D.C. Code Title 47), the corresponding regulation in 9 DCMR (Taxation), and any controlling DC Court of Appeals or Superior Court Tax Division authority. If a federal Internal Revenue Code provision is incorporated by reference under D.C. Code § 47-1801.04(28), cite the IRC section and the federal authority interpreting it.]

5.3. Issue 2 — [Substantive heading].

[Develop argument as above.]

5.4. Penalty Abatement — Reasonable Cause.

Even if any deficiency is sustained, the proposed accuracy-related and/or late-filing penalties should be abated. Taxpayer acted with reasonable cause and in good faith based on [reliance on professional advice / substantial authority / disclosure on the return / illness or other extenuating circumstances]. See D.C. Code § 47-4221; OTR Penalty Abatement Procedures.

5.5. Interest Computation.

Taxpayer reserves the right to challenge the computation of interest under D.C. Code § 47-4201 to the extent the underlying deficiency is reduced or eliminated.

6. RELIEF REQUESTED

WHEREFORE, Taxpayer respectfully requests that OAH:

• A. Schedule a hearing on this Protest pursuant to D.C. Code § 47-4312 and 1 DCMR Chapter 28;
• B. Cancel or substantially reduce the Proposed Assessment dated [DATE], Notice No. [NUMBER];
• C. Abate all penalties and recompute interest accordingly;
• D. Order OTR to issue a corrected Notice consistent with the OAH Final Order; and
• E. Grant such other and further relief as may be just and proper.

7. RESERVATION OF RIGHTS

7.1. Taxpayer reserves the right to amend or supplement this Protest, to raise additional issues or defenses as discovery may reveal, and to file additional motions as permitted by 1 DCMR Chapter 28.

7.2. Taxpayer reserves all rights to judicial review by the Superior Court of the District of Columbia, Tax Division, and by the District of Columbia Court of Appeals, of any adverse OAH Final Order, in accordance with D.C. Code §§ 47-3303, 47-3304, and 2-1831.16.

7.3. Nothing in this Protest constitutes a waiver of any right, claim, or defense, including statute-of-limitations, constitutional, or jurisdictional defenses.

8. VERIFICATION

DISTRICT OF COLUMBIA

I, [TAXPAYER NAME / AUTHORIZED OFFICER], declare under penalty of perjury under the laws of the District of Columbia that I have read the foregoing Protest and that the factual statements contained herein are true and correct to the best of my knowledge, information, and belief.

Date: [__/__/____]

[________________________________]

[TAXPAYER NAME / TITLE]

Date: [__/__/____]

Respectfully submitted,

[LAW FIRM NAME]

By: [________________________________]

[ATTORNEY NAME], DC Bar No. [####]

Counsel for Petitioner

[STREET ADDRESS]

[CITY, STATE ZIP]

Telephone: [NUMBER]

Email: [EMAIL]

9. CERTIFICATE OF SERVICE

I hereby certify that on [__/__/____], a true and correct copy of the foregoing PETITION FOR HEARING AND PROTEST OF PROPOSED ASSESSMENT was served upon the following by [first-class U.S. mail / certified mail, return receipt requested / electronic service via the OAH e-filing portal / hand delivery]:

Office of the General Counsel
District of Columbia Office of Tax and Revenue
1101 4th Street SW, Suite 750W
Washington, DC 20024

[________________________________]

[ATTORNEY NAME]

10. DC PRACTICE NOTES

• Two-track appeal system. A taxpayer who disputes a DC tax assessment has two mutually exclusive paths: (i) a no-pay protest to OAH within 30 days under D.C. Code § 47-4312, or (ii) a pre-pay appeal to the Superior Court Tax Division within 6 months under D.C. Code § 47-3303. Filing with OAH is generally preferable for cash-flow reasons because it stays collection.
• Individual income tax rates. DC imposes a progressive individual income tax under D.C. Code § 47-1806.03, currently with brackets ranging from 4% to 10.75% (verify current brackets in the OTR D-40 instructions for the relevant year).
• Unincorporated business franchise tax (UBFT). DC imposes an 8.25% franchise tax on unincorporated businesses under D.C. Code § 47-1808.03, with a $250 minimum tax (or $1,000 if District gross receipts exceed $1 million). The Form D-30 is filed in addition to (not in lieu of) the owner's individual return.
• Statutory residency. A "resident" includes any individual domiciled in DC at any time during the taxable year, plus statutory residents who maintain a place of abode in DC for an aggregate of 183 days or more (D.C. Code § 47-1801.04(42)). Domicile disputes are highly fact-intensive — preserve all evidence of out-of-District ties.
• OAH procedure. OAH conducts de novo evidentiary hearings under 1 DCMR Chapter 28. Pre-hearing conferences, discovery (limited), and motion practice are available. The Administrative Law Judge's Final Order is appealable to the DC Court of Appeals under D.C. Code § 2-1831.16.
• Superior Court Tax Division. Pre-pay appeals proceed under the Tax Division's local rules. The Court may "affirm, cancel, reduce, or increase the assessment" (D.C. Code § 47-3303). Decisions are reviewable by the DC Court of Appeals.
• Interest. OTR generally charges interest at a statutory rate set by D.C. Code § 47-4201 (currently 10% per annum, compounded daily — verify). Interest accrues on the deficiency from the original due date of the return regardless of the appeal.
• Tax liens. Unpaid final assessments give rise to a statutory lien under D.C. Code § 47-4421. A timely OAH protest typically prevents finality (and lien filing) while the protest is pending.
• Taxpayer Advocate. The DC Office of the Taxpayer Advocate, located within OTR, can intervene in cases of significant hardship; this is independent of the OAH protest process.

11. SOURCES AND REFERENCES

• D.C. Code § 47-3303 (Appeal from assessment) — https://code.dccouncil.gov/us/dc/council/code/sections/47-3303
• D.C. Code § 47-3304 (Review by Court) — https://code.dccouncil.gov/us/dc/council/code/sections/47-3304
• D.C. Code § 47-4312 (Protest of assessment) — https://code.dccouncil.gov/us/dc/council/code/sections/47-4312
• D.C. Code § 47-4421 (Lien for taxes) — https://code.dccouncil.gov/us/dc/council/code/sections/47-4421
• D.C. Code § 47-1806.03 (Individual income tax) — https://code.dccouncil.gov/us/dc/council/code/sections/47-1806.03
• D.C. Code § 47-1808.03 (Unincorporated business franchise tax) — https://code.dccouncil.gov/us/dc/council/code/sections/47-1808.03
• DC Office of Tax and Revenue — Taxpayer Rights, Appeals and Reconsiderations — https://otr.cfo.dc.gov/page/taxpayer-rights-appeals-and-reconsiderations
• DC Office of Administrative Hearings — https://oah.dc.gov/
• DC Superior Court Tax Division — https://www.dccourts.gov/superior-court/tax-division
• 1 DCMR Chapter 28 (OAH Rules of Practice and Procedure)
• DC Office of the Taxpayer Advocate — https://otr.cfo.dc.gov/page/taxpayer-advocate

Disclaimer: This template is provided for informational purposes only and does not constitute legal advice. An attorney licensed in the District of Columbia must review and customize this document before filing. Tax statutes, OTR procedures, and OAH rules change frequently — verify all citations, deadlines, and dollar thresholds independently before use.