Tax Audit Protest and Appeal — Connecticut

Tax Audit Protest and Appeal (CONNECTICUT)

Before you use this: Parts A through C follow the § 12-418 protest and § 12-422 appeal route for assessments under §§ 12-414a, 12-415, 12-416, 12-417, or 12-424. Income, corporation, withholding, and pass-through entity taxes may use different procedures; check the notice and governing tax statute before using these parts.

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: [__/__/____]
Assessment Type: ☐ Sales & Use (§ 12-415) ☐ Jeopardy (§ 12-417) ☐ Other § 12-418 covered assessment (§ [____])
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. Taxpayer will file a written protest within the applicable period after service of notice, regardless of whether a conference occurs.

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 assessment or reassessment and requests reconsideration and, in the Commissioner's discretion, an oral hearing. This Protest is filed within [60 / 10] days after service of notice under § 12-418(a)[1 / 2]. Taxpayer preserves the right to seek judicial review under § 12-422 after the Commissioner's decision, subject to that section's requirements.

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 waiver under the applicable tax provision and § 12-3a — grounds and supporting records: [____].

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

3.12. ☐ Other: [____].

IV. Reconsideration and Request for 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. Waive applicable penalties under the governing tax provision and § 12-3a;
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

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's notice of final determination was served on Plaintiff on [__/__/____]. The thirtieth day after service is [__/__/____]. This Appeal is taken within the thirty-day period prescribed by § 12-422.

1.3. The Return Date shown above is a Tuesday no more than two months after the date of process under Conn. Gen. Stat. § 52-48(a)-(b). The process will be served at least twelve days before that date (§ 52-46) and returned to the Superior Court clerk at least six days before it (§ 52-46a).

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. The citation and appeal were served on the Commissioner by State Marshal [NAME], as required by § 12-422.

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. On the evidence presented to this Court at trial, the assessment is erroneous because [STATE THE FACTS AND IDENTIFY EXHIBITS OR WITNESSES].
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 [identify the applicable tax and waiver provisions] 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 costs.

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)
• $360.00 filing fee
• Civil case classification: T90 (Tax Appeal)

Part D — Pre-Filing Checklist

• ☐ Confirmed this assessment is covered by § 12-418 and calendared the 60-day period after service of notice under subsection (a)(1), or the 10-day period for a § 12-417 assessment under subsection (a)(2)
• ☐ Calendared the 30-day judicial-appeal deadline (§ 12-422) after service of notice of the Commissioner's order, decision, determination, or disallowance
• ☐ 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 the governing tax provision and § 12-3a; identified any waiver over $5,000 for Committee approval
• ☐ 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 the citation and appeal on the Commissioner of Revenue Services
• ☐ E-filed via Connecticut Judicial e-services (mandatory for CT-admitted attorneys absent exemption)
• ☐ Selected a Tuesday return date within two months after process (§ 52-48); calendared service at least twelve days before it (§ 52-46) and return to the clerk at least six days before it (§ 52-46a)
• ☐ Issued litigation hold; preserved books, records, communications
• ☐ Considered probable-cause risk (§ 12-422 — court may tax double or triple costs if appeal without probable cause)
• ☐ Removed all `` 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. § 12-3a (Penalty Review Committee): https://www.cga.ct.gov/current/pub/chap_201.htm#sec_12-3a
• Conn. Gen. Stat. §§ 52-46, 52-46a, 52-48 (service, return, return day): https://www.cga.ct.gov/current/pub/chap_896.htm
• 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)