Tax Audit Protest and Appeal — Connecticut

Tax Audit Protest and Appeal (CONNECTICUT)

Quick-Reference Summary

Part A — Informal Conference Request Letter

Sender Letterhead

[LAW FIRM / TAXPAYER REPRESENTATIVE]
[________________________________]
[________________________________]
[City], Connecticut [Zip Code]
Phone: [________________________________]
Email: [________________________________]
CT Juris No.: [________________________________]

Date: [__/__/____]

SENT VIA:
☐ myconneCT secure messaging
☐ Certified Mail, Return Receipt Requested — Tracking No. [________________________________]
☐ Hand Delivery

TO:
Connecticut Department of Revenue Services
Appellate Division
450 Columbus Boulevard, Suite 1
Hartford, CT 06103-1837

RE: Request for Informal Conference — Notice of Deficiency Assessment
Taxpayer: [________________________________]
CT Tax Registration No.: [________________________________]
FEIN (last 4): [____]
Notice of Deficiency Assessment No.: [________________________________]
Date of Notice: [__/__/____]
Tax Type: ☐ Sales & Use (§ 12-415) ☐ Personal Income (§ 12-730) ☐ Corp. Business Tax (§ 12-237) ☐ Withholding ☐ Pass-Through Entity Tax ☐ Other: [____]
Period(s): [________________________________]
Total Assessed: $[____] (tax: $[____]; interest: $[____]; penalty: $[____])

To the Appellate Division:

This firm represents [TAXPAYER NAME] ("Taxpayer"). Before filing a formal written protest under Conn. Gen. Stat. § 12-418, Taxpayer respectfully requests an informal pre-protest conference with the audit team and the assigned Appellate Officer. A timely formal protest will be filed within the 60-day period in any event to preserve all rights.

Taxpayer requests:

1. Conference held [☐ at 450 Columbus Boulevard ☐ by telephone ☐ by Microsoft Teams];
2. Production of the complete audit narrative, workpapers, sampling methodology, and any third-party information;
3. The identity and credentials of the auditor and reviewing supervisor;
4. The statutes, regulations, and rulings relied upon for each adjustment;
5. Identification of any related DRS rulings, declaratory rulings, or PSs cited.

A Power of Attorney (Form LGL-001) executed by Taxpayer is enclosed.

Respectfully submitted,

[Signature]
[Counsel Name], CT Juris No. [____]

Enclosures: Form LGL-001 Power of Attorney; copy of Notice of Deficiency Assessment.

Part B — Formal Protest / Petition

TAXPAYER'S WRITTEN PROTEST

Filed Pursuant to Conn. Gen. Stat. § 12-418

Date: [__/__/____]

SENT VIA:
☐ myconneCT secure messaging — Confirmation No. [________________________________]
☐ Certified Mail, Return Receipt Requested — Tracking No. [________________________________]
☐ Hand Delivery — receipted by [____]

TO:
Connecticut Department of Revenue Services
Appellate Division
450 Columbus Boulevard, Suite 1
Hartford, CT 06103-1837

I. Statement of Protest

Pursuant to Conn. Gen. Stat. § 12-418, Taxpayer through undersigned counsel hereby PROTESTS the above-referenced Notice of Deficiency Assessment and requests reconsideration, including an oral hearing. This Protest is timely filed within the 60-day period prescribed by § 12-418(a)(1). Taxpayer expressly preserves all rights to: (a) reconsideration and oral hearing under § 12-418(b); (b) judicial appeal to the Superior Court for the Judicial District of New Britain (Tax Session) under § 12-422; and (c) any related refund claim under §§ 12-425, 12-732, or other applicable statute.

II. Statement of Facts

2.1. Taxpayer is a [Connecticut resident / domestic corporation / pass-through entity / nonresident with Connecticut-source income / out-of-state remote retailer] with principal place of business at [ADDRESS].

2.2. For the periods at issue, Taxpayer filed Connecticut [Form OS-114 / CT-1040 / CT-1120 / CT-PE / etc.] reporting [gross receipts / income] of $[____] and tax of $[____].

2.3. DRS conducted [a field audit / desk audit / nexus inquiry / pass-through entity audit] for the periods [____].

2.4. On [DATE], DRS issued the Notice of Deficiency Assessment proposing the following adjustments: [itemized — e.g., disallowance of resale-exemption certificates totaling $___; recharacterization of services as taxable computer and data processing under § 12-407(a)(37)(A); economic-nexus assertion under § 12-407(a)(12)(L); use-tax assessment on out-of-state purchases; corporation business tax single-sales-factor adjustment].

2.5. Taxpayer disagrees with the assessment on the grounds set forth below.

III. Grounds for Protest

3.1. ☐ Statute of limitations. Assessment is barred by Conn. Gen. Stat. § 12-415(f) / § 12-733 (3-year SOL); no fraud, unfiled-return, or 25%+ omission exception applies.

3.2. ☐ Factual error. [Specifics: overstated receipts, ignored exemption certificates, disregarded supplier invoices.]

3.3. ☐ Legal error. DRS misapplied [Conn. Gen. Stat. § ___ / Reg. § ___ / SN ___ / IP ___]. Specifically: [____].

3.4. ☐ Sales tax — exemption / resale certificates. Valid certificates under §§ 12-410 / 12-411 are enclosed for: [____].

3.5. ☐ Wayfair / economic-nexus defense. Taxpayer did not meet the $100,000 and 200-transaction thresholds under § 12-407(a)(12)(L) for the periods at issue.

3.6. ☐ Apportionment / sourcing error (CBT). DRS misapplied market-based sourcing under § 12-218(d) and single-sales-factor formula.

3.7. ☐ Pass-through entity tax error. [Credit / sourcing / opt-out.]

3.8. ☐ Improper statistical sampling. Sample is unrepresentative because: [____].

3.9. ☐ Constitutional infirmity. ☐ Commerce Clause / Due Process / Equal Protection / Connecticut uniformity. Argument: [____].

3.10. ☐ Penalty abatement under § 12-39h / Penalty Review Committee — reasonable cause exists because: [____].

3.11. ☐ Interest abatement to the extent attributable to DRS delay or written-advice reliance.

3.12. ☐ Other: [____].

IV. Demand for Reconsideration and Oral Hearing (§ 12-418(b))

Taxpayer demands reconsideration and requests an oral hearing before a DRS hearing officer. Taxpayer estimates the hearing will require [half / one] day and anticipates [__] witnesses and [__] exhibits.

V. Relief Requested

Taxpayer respectfully requests that the Commissioner:

A. Withdraw or modify the Notice of Deficiency Assessment, reducing tax to $[____] (or $0);
B. Abate all penalties under § 12-39h;
C. Abate interest to the extent attributable to DRS delay;
D. Schedule an oral hearing; and
E. Issue a written final determination identifying findings, conclusions of law, and appeal rights.

VI. Verification and Signature

I, [NAME], being duly authorized [as Taxpayer / as Taxpayer's counsel of record], certify under penalty of false statement that the statements of fact in this Protest are true and correct to the best of my knowledge.

Date: [__/__/____]

[Signature]
[Counsel Name], CT Juris No. [____]

VII. Enclosures

• ☐ Copy of Notice of Deficiency Assessment
• ☐ Form LGL-001 Power of Attorney
• ☐ Audit workpapers and exhibits
• ☐ Tax returns at issue
• ☐ Exemption / resale certificates
• ☐ Supporting documentation (invoices, books and records)
• ☐ Legal-authority schedule
• ☐ Computation reconciling Taxpayer's proposed tax to DRS's assessment

Part C — Appeal Cover Letter to Tax Tribunal / Court

TAXPAYER'S APPEAL TO THE SUPERIOR COURT — TAX SESSION

Filed Pursuant to Conn. Gen. Stat. § 12-422

Date: [__/__/____]

SENT VIA:
☐ Connecticut Judicial E-Services (mandatory for attorneys) — https://efile.eservices.jud.ct.gov
☐ Hand Delivery to Clerk
☐ State Marshal service on Commissioner of Revenue Services and Attorney General

I. Jurisdiction and Timeliness

1.1. This Court has exclusive statewide jurisdiction over appeals from final determinations of the Commissioner of Revenue Services under Conn. Gen. Stat. § 12-422 and the Tax and Administrative Appeals Session standing orders.

1.2. The Commissioner issued his final determination on [__/__/____]. The 30th day thereafter is [__/__/____]. This Appeal is filed and served within the one (1) month period prescribed by § 12-422.

1.3. The Return Date is the second Tuesday at least 15 days after filing per Conn. Practice Book § 8-1.

II. Parties

2.1. Plaintiff is [TAXPAYER NAME], [a Connecticut resident / a domestic / foreign corporation registered in Connecticut], with principal address at [____].

2.2. Defendant is the Commissioner of Revenue Services, an executive officer of the State of Connecticut, with offices at 450 Columbus Boulevard, Hartford, CT 06103-1837. Service was made by State Marshal [NAME] upon (a) the Commissioner of Revenue Services and (b) the Office of the Attorney General as required by § 12-422 and the Tax Session standing order.

III. Final Determination Being Appealed

3.1. Plaintiff appeals from the Commissioner's final determination dated [__/__/____] in Appellate Division Case No. [____], which sustained / modified the Notice of Deficiency Assessment dated [____], regarding [tax type, periods, amount]. A copy is attached as Exhibit A.

3.2. Amount in demand: $[____] in tax / interest / penalties is in dispute. (Statement of amount in demand filed with this Appeal as required by Practice Book § 8-1.)

IV. Procedural History

4.1. Notice of Deficiency Assessment issued [DATE].
4.2. Written Protest filed under § 12-418 on [DATE].
4.3. Oral hearing held on [DATE].
4.4. Final determination issued on [DATE] (Exhibit A).

V. Errors Assigned

5.1. The Commissioner's interpretation and application of [Conn. Gen. Stat. § ___] is contrary to law.
5.2. The Commissioner's findings are unsupported by substantial evidence in the record (or de novo evidence to be presented).
5.3. The Commissioner misapplied the statute of limitations under § 12-415(f) / § 12-733.
5.4. The assessment lacks factual basis for [____].
5.5. Penalty and interest were imposed contrary to § 12-39h and applicable due-process standards.
5.6. Constitutional infirmity — [Commerce Clause / Due Process / Equal Protection].

VI. Trial Demand

Plaintiff demands a trial de novo before a judge or judge trial referee of the Tax Session, as provided in § 12-422 and the Tax Session standing orders.

VII. Relief Requested

Plaintiff respectfully prays that the Court:

A. Reverse or modify the Commissioner's final determination;
B. Adjudge that Plaintiff owes tax of $[____] (or $0);
C. Order refund of any overpayment with statutory interest;
D. Abate all penalties and interest;
E. Award costs to the extent permitted by law; and
F. Grant such other relief as the Court deems just and equitable.

Plaintiff acknowledges that under § 12-422, if the appeal is without probable cause, the Court may tax double or triple damages.

By: [Signature]
[Counsel Name], CT Juris No. [____]
[Firm], [Address], [Phone], [Email]

Required Companion Filings (Practice Book § 8-1; Tax Session Standing Order)

• Citation (summons signed by Commissioner of the Superior Court / clerk)
• Statement of Amount in Demand: $[____]
• Recognizance ($[____])
• State Marshal's Return of Service (Commissioner of Revenue Services + Attorney General)
• $360.00 filing fee
• Civil case classification: T90 (Tax Appeal)

Part D — Pre-Filing Checklist

• ☐ Calendared 60-day protest deadline (Conn. Gen. Stat. § 12-418(a)(1)); 10-day deadline if § 12-417 jeopardy assessment
• ☐ Calendared one-month judicial-appeal deadline (§ 12-422) from final determination
• ☐ Verified SOL on assessment — 3 years (§ 12-415(f); § 12-733); 6 years for 25%+ omission; unlimited for fraud / unfiled
• ☐ Verified refund SOL — 3 years (§ 12-425; § 12-732)
• ☐ Obtained complete audit narrative, workpapers, and sampling methodology
• ☐ Filed Form LGL-001 Power of Attorney
• ☐ Drafted protest stating each ground; computed disputed amount
• ☐ Demanded reconsideration and oral hearing under § 12-418(b)
• ☐ Requested penalty waiver under § 12-39h (Penalty Review Committee)
• ☐ Gathered exemption / resale certificates and supplier invoices for sales-tax audits
• ☐ Confirmed Wayfair thresholds (§ 12-407(a)(12)(L)) and nexus posture
• ☐ For § 12-422 appeal: engaged State Marshal; prepared citation/summons/recognizance; statement of amount in demand; budgeted $360 filing fee
• ☐ Served Commissioner of Revenue Services AND Attorney General
• ☐ E-filed via Connecticut Judicial e-services (mandatory for CT-admitted attorneys absent exemption)
• ☐ Calendared return date (Tuesday ≥ 15 days after filing) per Practice Book § 8-1
• ☐ Issued litigation hold; preserved books, records, communications
• ☐ Considered probable-cause risk (§ 12-422 — court may tax double or triple damages if appeal without probable cause)
• ☐ Removed all <!-- GUIDANCE --> comments and bracketed placeholders prior to filing

Sources and References

• Connecticut Department of Revenue Services — Appeals: https://portal.ct.gov/drs
• DRS Appellate Division: 450 Columbus Boulevard, Suite 1, Hartford, CT 06103-1837
• myconneCT (Online Filing): https://drs.ct.gov/eservices
• Conn. Gen. Stat. § 12-418 (Written protest): https://www.cga.ct.gov/current/pub/chap_219.htm
• Conn. Gen. Stat. § 12-415 (Deficiency assessments — S&U): https://law.justia.com/codes/connecticut/title-12/chapter-219/section-12-415/
• Conn. Gen. Stat. § 12-422 (Appeal to Superior Court)
• Conn. Gen. Stat. § 12-425 (Sales/use refund claims)
• Conn. Gen. Stat. § 12-732 (Income tax refund claims)
• Conn. Gen. Stat. § 12-733 (Income tax SOL on assessment)
• Conn. Gen. Stat. § 12-39h (Penalty Review Committee)
• Connecticut Judicial Branch — Tax and Administrative Appeals Session: https://www.jud.ct.gov/external/super/Tax/default.htm
• Tax Session FAQs: https://www.jud.ct.gov/external/super/Tax/faqs.htm
• Connecticut Judicial e-Services: https://efile.eservices.jud.ct.gov
• Schenck v. Comm'r, 174 Conn. 224 (1978) (burden on taxpayer)