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You received a Notice of Deficiency or Rejection of Refund Claim from the Department of Revenue.
Now what should you do?
Review the instructions on the letter you received.
Follow the 3 Rs: Review, Research and Respond/Remit
1. Review. Review the Notice and compare it to your corresponding tax return. You should be able to see what changes the Department made.
2. Research. Research the change to see if it is accurate. Our FYI publications can help you more fully understand the nature of the tax or credit that was modified. The instructions and forms that correspond to your tax return are other good sources of information.
Once you understand why you received the Notice:
3. Respond or Remit.
The Notice you received should inform you what documentation the department requires you to send. Be sure to enclose a copy of your Notice with your response, and a cover letter that includes the following:
The department will review your case in the order in which it was received. Depending on the department's caseload and nature of your case, it may take up to six months for a response to your protest.
Missed the Filing Deadline. The department issues notices for penalty and interest when a return for any physical site (location) is not filed and paid on time. Both the return and the payment must be received by the due date of the return to be considered timely.
No Sales Tax Return Filed. The department also issues notices when it does not receive a sales tax return for any physical site (location). Licensed retailers are required to file a sales tax return for every period during which they maintain an active sales tax account. This requirement applies even if the retailer makes no sales and collects no tax during a given period. If no return is received, the department will assess estimated tax, penalty and interest.
Adjustments the Department Makes to Your Return. Additionally, the department issues bills for adjustments or corrections it makes that result in additional tax due.
The department will review your case in the order in which it was received. Depending on the Department's caseload and nature of your case, it may take up to six months for a response to your protest.