Oklahoma State Income Tax Protest — Letter of Protest to OTC

OKLAHOMA STATE INCOME TAX — LETTER OF PROTEST TO THE OKLAHOMA TAX COMMISSION

TABLE OF CONTENTS

1. Caption and Filing Information
2. Introduction and Statutory Basis
3. Identification of Taxpayer and Notice
4. Statement of Amount and Nature of Tax in Controversy
5. Statement of Facts
6. Assignments of Error
7. Argument and Legal Authority
8. Relief Requested
9. Demand for Oral Hearing
10. Reservation of Rights and Appeal
11. Verification
12. Signature and Service Block
13. Certificate of Service
14. Oklahoma Practice Notes
15. Sources and References

1. CAPTION AND FILING INFORMATION

BEFORE THE OKLAHOMA TAX COMMISSION

OFFICE OF ADMINISTRATIVE LAW JUDGES

OKLAHOMA CITY, OKLAHOMA

LETTER OF PROTEST AND DEMAND FOR HEARING

Filed pursuant to 68 O.S. §§ 207 and 221(C)

2. INTRODUCTION AND STATUTORY BASIS

Pursuant to 68 O.S. § 207 and § 221(C), Protestant [TAXPAYER NAME] ("Taxpayer") timely files this verified Letter of Protest and Demand for Hearing in opposition to the Notice of Proposed Assessment dated [__/__/____] (Letter ID [________]) issued by the Oklahoma Tax Commission ("OTC" or "Commission") in the amount of $[________] in tax, $[________] in interest, and $[________] in penalties, for tax year(s) [YYYY].

This protest is filed within sixty (60) days of the date of mailing of the Notice of Proposed Assessment as required by 68 O.S. § 221(C). Taxpayer respectfully requests that the proposed assessment be withdrawn, abated, or modified, and demands an oral hearing before the OTC's Office of Administrative Law Judges ("OAL Judges") pursuant to 68 O.S. § 207(c) and OAC 710:1-5-20 et seq.

3. IDENTIFICATION OF TAXPAYER AND NOTICE

3.1. Taxpayer. [TAXPAYER NAME], a [INDIVIDUAL / OKLAHOMA CORPORATION / OUT-OF-STATE CORPORATION QUALIFIED IN OKLAHOMA / LLC / S CORPORATION / PARTNERSHIP], with mailing address [STREET, CITY, STATE, ZIP], FEIN/SSN [XXX-XX-XXXX], and OTC account number [________].

3.2. Representative (if applicable). Taxpayer is represented in this matter by [COUNSEL / CPA / ENROLLED AGENT NAME] of [FIRM], [ADDRESS], telephone [NUMBER], email [EMAIL]. A duly executed Power of Attorney (OTC Form BT-129) is attached as Exhibit A.

3.3. Notice Under Protest. The Notice of Proposed Assessment subject to this protest is dated [__/__/____], Letter ID [________________________________], and was received by Taxpayer on [__/__/____]. A true and correct copy is attached as Exhibit B.

3.4. Timeliness. This protest is filed on [__/__/____], which is within sixty (60) days of the mailing date stated on the Notice. See 68 O.S. § 221(C).

4. STATEMENT OF AMOUNT AND NATURE OF TAX IN CONTROVERSY

4.1. Tax Type. Oklahoma [Individual / Corporate] Income Tax imposed under 68 O.S. § 2355.

4.2. Periods. Tax year(s) ending [__/__/____] through [__/__/____].

4.3. Amounts in Controversy.

5. STATEMENT OF FACTS

5.1. [Describe taxpayer's business or filing posture, residency status, filing history.]

5.2. [Describe the return(s) at issue and the items adjusted by the OTC.]

5.3. On [__/__/____], the OTC issued a Notice of Proposed Assessment based on [describe basis — e.g., disallowance of a deduction or credit, reclassification of nonresident income, alleged failure to apportion, alleged underreporting based on federal RAR adjustment under 68 O.S. § 2375].

5.4. [Set out the specific facts, documentation, and contemporaneous records that contradict or correct the OTC's adjustment.]

5.5. [Describe any prior correspondence, audit conferences, IDR responses, or position statements exchanged with the OTC.]

6. ASSIGNMENTS OF ERROR

Taxpayer asserts that the Notice of Proposed Assessment is erroneous in the following respects:

Assignment of Error No. 1: The OTC erroneously [describe — e.g., disallowed Taxpayer's claimed credit for taxes paid to another state under 68 O.S. § 2357(B)(1)].

Assignment of Error No. 2: The OTC erroneously [describe — e.g., classified Taxpayer as an Oklahoma resident notwithstanding domicile in [State] during the tax year under 68 O.S. § 2353(4)].

Assignment of Error No. 3: The OTC erroneously [describe — e.g., applied a three-factor apportionment formula contrary to 68 O.S. § 2358(A)(5) where Taxpayer's activity qualifies for single-sales-factor treatment].

Assignment of Error No. 4: The OTC's imposition of penalties under 68 O.S. § 217 is improper because [describe — e.g., Taxpayer acted with reasonable cause and in good faith reliance on professional advice].

7. ARGUMENT AND LEGAL AUTHORITY

7.1. Argument as to Assignment of Error No. 1

[Set out the controlling statute, regulation, OTC letter ruling, and Oklahoma Supreme Court authority. Cite by full Bluebook form: e.g., 68 O.S. § 2357(B)(1); OAC 710:50-15-72; Strelecki v. Okla. Tax Comm'n, 1993 OK 122, 872 P.2d 910.]

7.2. Argument as to Assignment of Error No. 2

[Apply the legal standard to the facts. Distinguish unfavorable authority. Quote relevant statutory language.]

7.3. Argument as to Assignment of Error No. 3

[Address apportionment, sourcing, or other technical issues with citation to the Multistate Tax Compact (where adopted), 68 O.S. § 2358, and applicable regulations.]

7.4. Argument as to Penalty Abatement

Penalties imposed under 68 O.S. § 217 are subject to abatement upon a showing of reasonable cause. Taxpayer [describe reasonable-cause facts, including reliance on competent tax professional, ambiguity of law, or first-time-noncompliance] and respectfully requests abatement of all penalties asserted.

8. RELIEF REQUESTED

WHEREFORE, Taxpayer respectfully requests that the OTC:

• A. Withdraw and abate the Notice of Proposed Assessment dated [__/__/____] in its entirety;
• B. Alternatively, modify the proposed assessment to reflect tax due of no more than $[________], with corresponding reductions to interest and penalties;
• C. Abate all penalties asserted under 68 O.S. § 217 for reasonable cause;
• D. Issue a final order adopting Taxpayer's position; and
• E. Grant such other and further relief as the Commission deems just and equitable.

9. DEMAND FOR ORAL HEARING

Pursuant to 68 O.S. § 207(c), Taxpayer expressly demands an ORAL HEARING before the OTC Office of Administrative Law Judges. Taxpayer requests not less than ten (10) days' notice of the hearing date as required by statute and reserves the right to present testimony, documentary evidence, and legal argument at that hearing. The hearing should be conducted in accordance with OAC 710:1-5-20 through 710:1-5-49.

10. RESERVATION OF RIGHTS AND APPEAL

Taxpayer reserves all rights, including:

• The right to amend or supplement this protest with additional evidence and argument;
• The right to conduct discovery and to subpoena witnesses and records as permitted by OAL Judges' procedural rules;
• The right to appeal any adverse final order of the Commission directly to the Oklahoma Supreme Court within thirty (30) days of mailing under 68 O.S. § 225(a); and
• In the alternative, the right to elect a trial de novo in the District Court of Oklahoma County or the county of Taxpayer's residence under 68 O.S. § 225(b).

11. VERIFICATION

STATE OF OKLAHOMA

COUNTY OF [COUNTY]

I, [TAXPAYER NAME / OFFICER NAME, TITLE], being first duly sworn upon my oath, depose and state that I am the [Taxpayer / authorized officer of Taxpayer] in the foregoing matter; that I have read the foregoing Letter of Protest and Demand for Hearing; that the statements of fact contained therein are true and correct to the best of my knowledge, information, and belief; and that this verification is made pursuant to 68 O.S. § 207(b).

[________________________________]

[NAME], [TITLE]

Subscribed and sworn to before me this [____] day of [_______________], 20[____].

[________________________________]

Notary Public — State of Oklahoma

(My Commission Number: [________])

(My Commission Expires: [_______________])

12. SIGNATURE AND SERVICE BLOCK

Date: [__/__/____]

Respectfully submitted,

[LAW FIRM / CPA FIRM NAME]

By: [________________________________]

[ATTORNEY / CPA NAME], OBA No. [####] (if attorney)

Counsel / Authorized Representative for Taxpayer

[STREET ADDRESS]

[CITY, OK ZIP]

Telephone: [NUMBER]

Email: [EMAIL]

13. CERTIFICATE OF SERVICE

I hereby certify that on the [____] day of [_______________], 20[____], the foregoing LETTER OF PROTEST AND DEMAND FOR HEARING was filed by:

☐ Certified U.S. Mail, Return Receipt Requested, addressed to:

Oklahoma Tax Commission
Office of Administrative Law Judges
Oklahoma City, OK 73194

☐ OkTAP Online Portal (https://oktap.tax.ok.gov)

☐ Hand Delivery to the Oklahoma Tax Commission, Connors Building, 2501 N. Lincoln Boulevard, Oklahoma City, OK 73194

A copy was served upon the OTC examining division at [ADDRESS / EMAIL].

[________________________________]

[REPRESENTATIVE NAME]

14. OKLAHOMA PRACTICE NOTES

• 60-day jurisdictional deadline. The 60-day protest period under 68 O.S. § 221(C) is jurisdictional. A late protest converts the proposed assessment into a final, collectible debt under 68 O.S. § 222 and forecloses administrative review. Calendar the deadline from the date of mailing on the Notice (not the date of receipt).
• Verification required. A protest that is unsworn or unsigned is procedurally defective. Always include the notarial verification block and a current Power of Attorney (OTC Form BT-129) when filed by a representative.
• OTC Form L-25. The Commission provides Form L-25 ("Application for Protest or Demand for Hearing") as an optional cover form. A written letter that satisfies § 207(b) is equally sufficient; many practitioners use a substantive letter with the L-25 attached as a cover.
• Burden of proof. The taxpayer generally bears the burden of overcoming the presumption of correctness attached to OTC assessments. Build the record at the protest stage — additional evidence is harder to admit on direct appeal to the Supreme Court under § 225(a).
• Federal RAR adjustments. If the assessment is based on a federal Revenue Agent's Report adjustment, note that 68 O.S. § 2375(H) requires the taxpayer to report the federal change within one year. Failure may waive certain defenses; verify the underlying federal adjustment and any final IRS resolution before protest.
• Two appeal tracks under § 225. A final OTC order may be appealed (a) directly to the Oklahoma Supreme Court on a 30-day deadline using the existing administrative record, or (b) by trial de novo in district court (Oklahoma County or county of residence). The de novo route allows a fresh evidentiary record but doubles the cost and timeline. Choose strategically based on the strength of the administrative record and the legal vs. factual nature of the dispute.
• Confidentiality. OTC protest proceedings and records containing taxpayer information are confidential under 68 O.S. § 205; appellate records implicating confidential information may be sealed under § 225(c).
• Settlement and Voluntary Disclosure. Many disputes resolve through informal conferences with the audit division or through the OTC's settlement and abatement procedures. Always evaluate informal resolution before final protest hearing.
• Interest accrual. Interest under 68 O.S. § 217 continues to accrue on disputed amounts during the protest. To stop the running of interest while preserving protest rights, taxpayers may consider paying the disputed amount under protest and pursuing a refund claim under 68 O.S. § 227.

15. SOURCES AND REFERENCES

• Oklahoma Statutes Title 68 (Revenue and Taxation) — https://www.oklegislature.gov/OK_Statutes/CompleteTitles/os68.pdf
• 68 O.S. § 207 (Protests; Hearings) — https://law.justia.com/codes/oklahoma/title-68/
• 68 O.S. § 221 (Reports or Returns by Taxpayer) — https://law.justia.com/codes/oklahoma/title-68/section-68-221/
• 68 O.S. § 225 (Appeals) — https://law.justia.com/codes/oklahoma/title-68/section-68-225/
• Oklahoma Administrative Code Title 710 (Oklahoma Tax Commission) — https://oklahoma.gov/tax/about-otc/oac.html
• OAC 710:1-5-20 through 710:1-5-49 (Rules of Practice and Procedure before the OAL Judges)
• OTC Form L-25 (Application for Protest or Demand for Hearing) — https://oklahoma.gov/content/dam/ok/en/tax/documents/forms/other/L-25.pdf
• OTC Form BT-129 (Power of Attorney) — https://oklahoma.gov/tax/forms.html
• Oklahoma Tax Commission — https://oklahoma.gov/tax.html
• OkTAP Online Portal — https://oktap.tax.ok.gov
• Oklahoma State Courts Network — https://www.oscn.net
• Strelecki v. Okla. Tax Comm'n, 1993 OK 122, 872 P.2d 910 (residency standard)
• Blair v. Okla. Tax Comm'n, 1997 OK CIV APP 28 (procedural appeal)

Disclaimer: This template is provided for informational purposes only and does not constitute legal or tax advice. An attorney licensed in Oklahoma or a qualified Oklahoma tax practitioner must review and customize this document before filing. Statutory provisions, OTC procedures, and administrative rules change frequently — verify all citations and deadlines before relying on this document.