Tax Audit Protest and Appeal — Alabama

Tax Audit Protest and Appeal (ALABAMA)

Quick-Reference Summary

Part A — Informal Conference Request Letter

[LAW FIRM / TAXPAYER LETTERHEAD]
[Street Address]
[City, AL ZIP]
Telephone: [____________]
Email: [____________]
AL Bar No.: [____________]

Date: [__/__/____]

Via Email and U.S. Mail

[Auditor Name], Revenue Examiner
Alabama Department of Revenue — [Division]
[Address]
Email: [auditor email]

RE: Request for Informal Audit Conference Before Preliminary Assessment
Taxpayer: [TAXPAYER NAME]
AL Account No. / FEIN: [____________]
Audit / Case No.: [____________]
Tax Type / Periods: [Income / Sales / Use / Rental / Lodgings / Withholding] — [YYYY]–[YYYY]

Dear [Auditor Name]:

This office represents the above-referenced Taxpayer in the pending Alabama Department of Revenue audit. Pursuant to ALDOR audit practice and prior to issuance of any Preliminary Assessment under Ala. Code § 40-2A-7(b)(1), Taxpayer respectfully requests an informal audit conference with the audit team and your supervisor / Group Leader to discuss the proposed adjustments described in the [Audit Findings Letter / Workpapers / Notice of Audit Findings] dated [__/__/____].

1. Issues Proposed for Discussion

2. Documents Submitted Herewith

• [Exhibits — invoices, contracts, federal returns, ALDOR Revenue Procedures, ATT opinions]

3. Outcome Requested

Taxpayer requests reconsideration of the proposed adjustments under Alabama law. If a Preliminary Assessment is nevertheless issued, Taxpayer will exercise its rights under § 40-2A-7(b)(4) to file a timely Petition for Review within 30 days; thereafter, if a Final Assessment issues, a Notice of Appeal will be filed with the Alabama Tax Tribunal within 60 days under § 40-2A-7(b)(5).

Please confirm a date for the conference. We are available [propose dates]. This letter is submitted without waiver of any rights.

Respectfully,

[ATTORNEY NAME]
AL Bar No. [____________]

Part B — Formal Protest / Petition

Part B-1 — Petition for Review of Preliminary Assessment (Ala. Code § 40-2A-7(b)(4))

[LAW FIRM / TAXPAYER LETTERHEAD]

Date: [__/__/____]

Via Certified Mail — Return Receipt Requested
and Via My Alabama Taxes (MAT) Secure Upload

Alabama Department of Revenue
[Division — Income Tax / Sales & Use Tax / Etc.]
Attn: [Reviewer / Group Leader]
P.O. Box [____________]
Montgomery, AL [____________]

RE: PETITION FOR REVIEW OF PRELIMINARY ASSESSMENT — Ala. Code § 40-2A-7(b)(4)

1. Statement of Petition

Pursuant to Ala. Code § 40-2A-7(b)(4), Taxpayer [NAME] petitions for review of the above-referenced Preliminary Assessment in whole [or in part as to the issues itemized in Section 3] and requests that ALDOR consider Taxpayer's position before any Final Assessment is entered.

2. Timeliness

Preliminary Assessment dated [__/__/____]. Petition filed and postmarked [FILING DATE], within thirty (30) days as required by § 40-2A-7(b)(4).

3. Itemized Schedule of Disputed Adjustments

4. Statement of Facts

[Detailed chronology — entity formation, operations, returns, audit history.]

5. Grounds

5.1. Erroneous Application of Alabama Tax Statute. [Cite and explain.]

5.2. Conflict with ALDOR Revenue Procedure / Bulletin. [Cite.]

5.3. Statute of Limitations. § 40-2A-7(b)(2).

5.4. Constitutional Defenses. Commerce Clause; Due Process; P.L. 86-272.

5.5. Penalty Abatement. § 40-2A-11 — reasonable cause.

6. Relief Requested

a. Withdraw Preliminary Assessment;
b. Cancel all tax, interest, penalty;
c. Decline to enter Final Assessment;
d. Issue written explanation of disposition.

7. Reservation of Final Assessment Appeal Rights

Taxpayer reserves the right to file a Notice of Appeal with the Alabama Tax Tribunal (or circuit court) within 60 days of any Final Assessment entered, per § 40-2A-7(b)(5).

Respectfully,

[ATTORNEY NAME]
AL Bar No. [____________]

Part B-2 — Notice of Appeal to Alabama Tax Tribunal (Ala. Code § 40-2A-7(b)(5); § 40-2B-2)

ALABAMA TAX TRIBUNAL

Docket No.: [TO BE ASSIGNED]

NOTICE OF APPEAL FROM FINAL ASSESSMENT

Pursuant to Ala. Code §§ 40-2A-7(b)(5) and 40-2B-2 and the Alabama Tax Tribunal Rules (887-X-1), Taxpayer [NAME] appeals to the Alabama Tax Tribunal from the Final Assessment identified below.

1. Taxpayer Information

2. Final Assessment

3. Jurisdiction and Timeliness

3.1. The Alabama Tax Tribunal has jurisdiction under Ala. Code §§ 40-2A-7(b)(5)a. and 40-2B-2(g).

3.2. The Final Assessment was mailed on [__/__/____] [and personally served on [__/__/____], whichever earlier]. This Notice of Appeal is filed on [__/__/____], within sixty (60) days as required by § 40-2A-7(b)(5).

3.3. Filing is by [USPS Certified Mail / FedEx Standard Overnight / UPS Next Day Air] — an ALDOR-approved delivery service per the list incorporating IRS Notice 2016-30. (UPS Ground is NOT used.)

4. Detailed Statement of Specific Reasons for Appeal

4.1. Itemized Adjustments in Dispute

4.2. Grounds for Appeal

4.2.1. Erroneous Application of Alabama Tax Code. [Cite Title 40 sections, explain misapplication.]

4.2.2. Conflict with ALDOR Published Guidance. [Cite ALDOR Revenue Procedures, Rules, Letter Rulings.]

4.2.3. Statute of Limitations. Assessment barred by § 40-2A-7(b)(2) [explain].

4.2.4. Constitutional Defenses. [Commerce Clause — Wayfair / Complete Auto; Due Process; P.L. 86-272; Multistate Tax Compact issues.]

4.2.5. Check-the-Box Conformity. [If applicable — Ala. Code § 10A-5A-1.07(b); ALDOR Rev. Proc. 98-1; entity-classification consequences across income, sales/use, rental, excise.]

4.2.6. Apportionment / Sourcing. [§ 40-27-1 (Alabama Multistate Tax Compact) or single-factor sales apportionment under § 40-18-31.2.]

4.2.7. Penalty Abatement — Reasonable Cause. § 40-2A-11.

4.2.8. Federal-Change Issues. § 40-2A-7(b)(2)b. [If applicable.]

5. Relief Requested

WHEREFORE, Taxpayer respectfully requests that the Alabama Tax Tribunal:

a. Vacate the Final Assessment in whole [or as to issues specified];
b. Cancel all tax, interest, and penalty;
c. Order any necessary recalculation under the Tribunal's findings;
d. Refer to ALDOR's Office of Taxpayer Advocacy any equitable relief beyond the Tribunal's jurisdiction;
e. Grant such other relief as is just and proper.

6. Attachments

• ☐ Photocopy of the Final Assessment (required attachment per § 40-2A-7(b)(5))
• ☐ Power of Attorney (ALDOR Form 2848A)
• ☐ Itemized Adjustment Schedule
• ☐ Exhibits A–[__]

Respectfully submitted,

_________________________________
[ATTORNEY NAME]
AL Bar No. [____________]
[Firm / Address / Phone / Email]
Attorney for Taxpayer [TAXPAYER NAME]

_________________________________
[TAXPAYER / AUTHORIZED OFFICER NAME] (verification, where required)
Title: [____________]

CERTIFICATE OF SERVICE

I certify that on [__/__/____] a copy of the foregoing was served on the Alabama Department of Revenue, c/o Secretary of the Department, P.O. Box 327001, Montgomery, AL 36132-7001, by [USPS Certified Mail — Return Receipt Requested / FedEx Standard Overnight / UPS Next Day Air] — an ALDOR-approved delivery service.

_________________________________

Part C — Appeal Cover Letter to Tax Tribunal / Court

[LAW FIRM LETTERHEAD]

Date: [__/__/____]

Via [USPS Certified Mail — Return Receipt Requested / FedEx Standard Overnight / UPS Next Day Air — NOT UPS Ground]

Alabama Tax Tribunal
7515 Halcyon Summit Drive, Suite 103
Montgomery, AL 36117
Phone: 334-954-7195
Website: https://taxtribunal.alabama.gov

RE: Filing of Notice of Appeal from Final Assessment
Taxpayer: [TAXPAYER NAME]
Final Assessment Date: [__/__/____]
Tax Type / Periods: [____________]
Total Final Assessment: $[____________]

Dear Clerk of the Tribunal:

Enclosed for filing please find:

This Notice of Appeal is timely filed within 60 days of the date of mailing/personal service of the Final Assessment, per Ala. Code § 40-2A-7(b)(5). Filing is by an ALDOR-approved delivery service per the carrier list incorporating IRS Notice 2016-30.

Please assign a docket number and confirm receipt.

Respectfully,

[ATTORNEY NAME]
AL Bar No. [____________]

cc: Secretary of the Alabama Department of Revenue (certified mail copy enclosed)
ALDOR Legal Division

Part D — Pre-Filing Checklist

During Audit

• ☐ Issue litigation hold; preserve books and records.
• ☐ File ALDOR Form 2848A (Power of Attorney).
• ☐ Reconcile federal return to AL return; identify all add-backs/subtractions.
• ☐ Track all IDRs and responses.
• ☐ Calendar AL federal-change reporting deadline (180 days under § 40-2A-7(b)(2)b.).
• ☐ Verify entity check-the-box classification (Ala. Code § 10A-5A-1.07(b); Rev. Proc. 98-1).
• ☐ Request informal supervisor conference before Preliminary Assessment.

Preliminary Assessment Received

• ☐ Identify and docket date on Preliminary Assessment.
• ☐ Calendar DAY 30 to file Petition for Review under § 40-2A-7(b)(4).
• ☐ Calendar internal cushion at Day 25.
• ☐ Prepare Petition addressing every adjustment.
• ☐ File via certified mail AND My Alabama Taxes (MAT) upload.

Final Assessment Received

• ☐ Identify and docket date of MAILING AND date of PERSONAL SERVICE (use the earlier of the two).
• ☐ Calendar DAY 60 to file Notice of Appeal under § 40-2A-7(b)(5).
• ☐ Calendar internal cushion at Day 50.
• ☐ Decide forum: Alabama Tax Tribunal (no pay-to-play) OR Circuit Court (pay in full or post 125% bond, unless net worth ≤ $100,000).
• ☐ Confirm approved delivery carrier list: USPS, FedEx, DHL Express, specific UPS services (NOT UPS Ground).

Tax Tribunal Notice of Appeal Preparation

• ☐ Draft detailed statement of specific reasons for appeal (§ 40-2A-7(b)(5) requirement — failure may cause dismissal).
• ☐ Itemized schedule of disputed adjustments.
• ☐ Statement of facts.
• ☐ Grounds — statutes, ALDOR Rev. Proc., ATT opinions, constitutional defenses.
• ☐ SOL defense (§ 40-2A-7(b)(2)).
• ☐ Penalty abatement — reasonable cause (§ 40-2A-11).
• ☐ Photocopy of Final Assessment (required attachment).
• ☐ Power of Attorney enclosed.
• ☐ Exhibits Bates-stamped, indexed.

Filing

• ☐ Mail via approved carrier (USPS Certified Mail RRR preferred; FedEx Standard Overnight; UPS Next Day Air / 2nd Day Air / Next Day Air Saver).
• ☐ Serve copy on Secretary of the Department, ALDOR, P.O. Box 327001, Montgomery, AL 36132-7001.
• ☐ Retain delivery receipt and tracking.
• ☐ Calendar ALDOR's Answer deadline (Tribunal Rules — typically 30 days).
• ☐ Calendar taxpayer's reply deadline (30 days after Answer — § 40-2B-2(g)(4)).

Tax Tribunal Procedure

• ☐ Confer regarding scheduling, discovery, ADR.
• ☐ Comply with Tribunal Rules 887-X-1.
• ☐ Prepare pretrial brief and exhibit list.
• ☐ Conduct hearing in Montgomery (or by video).

After Tax Tribunal Final Order

• ☐ Calendar deadline to appeal to Circuit Court (within 30 days of Tribunal Final Order under § 40-2B-2(m)).
• ☐ Confirm bond/payment requirements for circuit-court review.

Refund Denial Track (Different Deadline — § 40-2A-7(c)(5))

• ☐ Refund petition denied → 2 YEARS to file Notice of Appeal with Tax Tribunal (NOT 60 days).
• ☐ Confirm date of denial; calendar 2-year deadline.

Circuit Court Alternative

• ☐ If electing circuit court instead of Tax Tribunal: file Notice of Appeal with both Secretary of Department AND circuit court clerk within 60 days.
• ☐ Pay tax in full OR post 125% supersedeas bond.
• ☐ If net worth ≤ $100,000, qualify for bond waiver per § 40-2A-7(b)(5)b.2.

Local Tax Assessments

• ☐ If from county/municipality (sales/use/rental/lodgings), confirm whether locality has opted out of Tax Tribunal jurisdiction under § 40-2B-2(g).
• ☐ If opted out, follow locality's administrative process and circuit-court review.

Sources and References

• Ala. Code § 40-2A-7 (Uniform Revenue Procedures — Assessments and Appeals): https://codes.findlaw.com/al/title-40-revenue-and-taxation/al-code-sect-40-2a-7/
• Ala. Code § 40-2B-2 (Alabama Tax Tribunal): https://law.justia.com/codes/alabama/title-40/chapter-2b/section-40-2b-2/
• Alabama Tax Tribunal — Home: https://www.taxtribunal.alabama.gov
• Alabama Tax Tribunal — Rules (887-X-1): https://www.taxtribunal.alabama.gov/wp-content/uploads/2023/08/AlabamaTaxTribunal-AdministrativeRuleInventory.pdf
• ALDOR — Final Assessment Appeal Rights: https://www.revenue.alabama.gov/legal/final-assessment-appeal-rights/
• ALDOR — Taxpayers' Bill of Rights: https://www.revenue.alabama.gov/legal/taxpayer-bill-of-rights/
• ALDOR — Office of Taxpayer Advocacy: https://www.revenue.alabama.gov/about/office-of-taxpayer-advocacy/
• My Alabama Taxes (MAT) Portal: https://myalabamataxes.alabama.gov
• Bradley SALT Alert — Alabama Filing Traps (April 2026): https://www.bradley.com/insights/publications/2026/04/alabama-tax-tribunal-rulings-remind-us-of-two-traps-for-the-unwary-taxpayer-and-tax-practitioner
• IRS Notice 2016-30 (Approved Private Delivery Services): https://www.irs.gov/pub/irs-drop/n-16-30.pdf
• Knauf Insulation v. Chambers County (ATT 2023) — Refund Appeal 2-Year Window: https://www.taxtribunal.alabama.gov/wp-content/uploads/2023/05/1751_Opinion-Preliminary-Order-.pdf