Legislative Update: Tennessee Department of Revenue Proposes Changes to Informal Taxpayer Conference Process (SB1635/HB1431)

Client Alert

Author(s) ,

On January 14, the Tennessee Department of Revenue introduced legislation that, if enacted, would modify the informal taxpayer conference procedures that govern the appeal of tax assessments in Tennessee. The legislation is being proposed to counter efforts in prior legislative sessions to form an independent tax tribunal in Tennessee.

The current legislation would adopt new procedures to allow the department to issue “proposed assessments,” after which a taxpayer could request an informal conference to challenge the proposed assessment before it becomes a “final assessment.” The informal conference request still must be made within 30 days of the date of the notice of proposed assessment, but the time period within which a taxpayer has an opportunity to file suit to challenge the assessment without paying the tax is now 90 days from the date that the assessment becomes final.

With respect to the informal conference, the bill provides that personnel conducting the conference must exercise independent judgment and cannot engage in ex parte communications with the department’s audit division except as to ministerial, administrative, or procedural matters. The informal conference officer may recommend a compromise of the proposed assessment. There is no precedent established by the informal conference decisions, and no provision is made for the publication of decisions. If passed, the changes would take effect January 1, 2015.

The department has requested comments on the proposed legislation, so please contact the attorneys of Bradley Arant Boult Cummings LLP if you would like comments to be submitted to the department on your behalf.

It is unclear whether a taxpayer tribunal bill will be introduced by proponents of a tax tribunal. Interested taxpayers should monitor this issue for further developments.