Information Concerning Audit Procedures and Appeal Process
Online Version of Form 15-001, Updated January 1, 2015
The Mississippi Department of Revenue is the state agency responsible for the administration of the revenue laws necessary to fund public services for you and your fellow citizens. It is our goal that every taxpayer pays the correct amount of tax due according to state law. One step toward reaching that goal is to audit tax returns to verify the accuracy of the tax liability reported.
There are various reasons why you may be selected for audit. However, the most common reasons include random selection, frequent or consistent errors on returns, insufficient information on returns, and/or a discrepancy with comparisons to third party information. This publication’s purpose is to provide a general overview of the audit process and what you can do if you disagree with the audit findings.
Please see Chapter 77, Title 27 of the Miss. Code Ann., and Title 35, Part 1, Chapter 01 of the Mississippi Administrative Code for a more detailed explanation of the law and administrative procedures of the Department of Revenue.
A field audit takes place at your place of business, home, or other place (such as your tax preparer’s office) to inspect your financial records. All field audits will be conducted at a reasonable time and place. The auditor will make the initial contact with you concerning the audit. An appointment letter will advise you of the audit date and other general information. It is your responsibility to provide the auditor with records and other information necessary to determine your correct tax liability.
Generally, an audit covers a 3-year period of time. The statute of limitations provides that the DOR is restricted in our review of your returns to a period of 36 months past the date the return was due or the date the return was filed (depending on the tax type being audited.) The statute of limitations only applies to filed returns. There is no statute of limitations for periods for which a return has not been filed.
The appointment letter includes notice that the DOR is arresting, or stopping, the statute of limitations from the date of the appointment letter. This is necessary to establish a beginning date for the audit period. What this means to you is that we will audit returns filed on or after the date given in the body of the appointment letter. This date is generally 3 years prior to the date of the appointment letter.
The appointment letter will provide you with a general guideline of the documents and records that the auditor will need to examine. If the letter does not include specific records utilized by you that are critical in proving your tax liability, go ahead and have those records ready in order for the auditor to be able to complete the work on your audit as quickly as possible.
After performing the examination of your records, the auditor will provide you a copy of the audit work papers. You will have a reasonable amount of time to review these work papers, ask questions, and provide additional information, if needed. The time for this review is dependent upon the amount of records and complexity of the issues involved.
It is critical that you communicate any issues you may have concerning the audit with the auditor. You should address all questions concerning the audit, tax law, rules and regulations to the auditor and/or the auditor’s supervisor during the course of the audit.
Once a field audit is completed, the agency will send you a formal notice of the audit results. This letter is called the Notice of Assessment. In this case, the word “assessment” does not necessarily mean that you owe the state any money. The assessment may be a zero amount, a credit (overpayment) amount, or it could be the audit results show that you owe an additional amount of tax, penalties, and/or interest.
Many audits result in no change to the reported tax liability. This means that no additional tax was found due nor was an overpayment of tax found. The assessment will show zero tax due. In some cases, we will find that you have overpaid your tax. Your assessment letter will show a negative amount of tax due.
When an assessment of additional tax is found due, the assessment will show a positive amount; however, if you have already paid all or part of this assessment, the letter will show the additional tax assessed, a credit for the payment, and the balance due.
The following described assessment and administrative and/or judicial appeal process applies only to assessments (including overpayment determinations) issued on or after July 1, 2010.
Once the Notice of Assessment is mailed or delivered to you, if tax is found due, you have 60 days from the date of the notice to pay the liability. You do not need to do anything if you agree with a no change or overpaid finding. If you only agree with a portion of the audit, you may pay that portion and protest the part you disagree with. It is advisable to pay the portion you agree with to avoid accruing additional interest and/or penalties.
The first step is to discuss the audit findings with the auditor. We encourage you to ask the auditor questions concerning anything that is not clear to you. If you cannot come to an agreement, request a meeting with the auditor’s supervisor where you will be given the opportunity to explain your position, ask questions, and provide any additional documentation to support your position.
If you still cannot agree with the audit results, within 60 days of the date of the notice you may appeal that assessment and request a hearing before the Review Board. Unless the Department of Revenue determines that a delay will jeopardize its ability to collect the assessment, no action will be taken to collect the assessment until it is mailed or delivered to you and the 60-day period for appealing the assessment has expired.
Once the Notice of Assessment is mailed or delivered to you, you have 60 days from the mailing date or date of hand delivery of that notice to request a hearing before the Review Board. Your appeal will not be considered if you do not file the request timely. Your appeal will only be considered timely if you: 1) complete the Review Board Appeal Petition request on Taxpayer Access Point (TAP), found at www.dor.ms.gov by midnight of the 60th day, 2) submit a written appeal by other electronic means by midnight of the 60th day, 3) mail a written appeal with a postmark on or before the 60th day. Enclose with your request a copy of the assessment or letter denying a refund, and a completed power of attorney, if represented.
The 60-day time period begins on the mailing date of the Notice of Assessment regardless of whether you are still in discussions with the auditor, and/or the auditor’s supervisor, or whether you are still gathering information to support your position. You will not be granted a hearing if you do not timely file the request. It is your responsibility to make sure that your written request is timely filed within the 60-day period. You should include the following in your written request for a hearing: your name, address, business name, ID number, and a description of the relief that you are seeking. An ID number can be your social security number, Federal Employer Identification number, and/or your tax account number(s). You should specify what tax assessment you are protesting and the amount of the assessment. Please provide the reason why you are in disagreement with the assessment and supply the information needed to support your reason. At the hearing you are not limited to the information included in your written protest and you may bring additional information and facts to the hearing.
Once the written request for hearing is received, the Review Board will mail you a notice of the date and time of the hearing. You have 10 days from the date of the hearing notice to advise the Board if the date is inconvenient for you and a new date will be assigned for your case. If you contact the Review Board after 10 days, it is at the discretion of the Chairman of the Review Board to reschedule your hearing date.
You may request to submit your position in writing (or by electronic means) instead of appearing at the hearing. The Chairman of the Review Board will advise you if your request is granted and the date that your written position is due.
If you do not attend your hearing as scheduled, or fail to timely file your written position, your appeal will be considered withdrawn and the assessment will not be subject to further review by the Department of Revenue, the Board of Tax Appeals, or a court.
The hearing before the Review Board is informal. At least three members of the Department of Revenue staff make a panel. These members will consist of persons independent of the audit department. Representatives from the audit department may attend to explain the audit procedure and results. Other members of the Department of Revenue staff may also attend; however, the decision is made by the members on the panel.
At the hearing you will have the opportunity to tell the Review Board why you disagree with the audit assessment. You may present additional documentation you wish the Board to consider.
You are not required to be represented, but if you desire, you may be represented by your attorney, accountant, employee, or other person you choose; however, confidentiality laws prohibit us from discussing your account with anyone but your authorized representative. It is your responsibility to inform us of who is representing you and you must inform us if you should cease that relationship.
After consideration of the facts presented at the hearing, the Review Board will mail you or your representative an order informing you of their decision. The order will advise you of the action taken by the Board.
If you disagree with the decision of the Review Board, you have 60 days from the date of the order to make a written request for a hearing before the Board of Tax Appeals. Your written request should be mailed to the Executive Director of the Board of Tax Appeals at the address provided in the Order. Additionally, a copy of this request should be mailed to the Chairman of the Review Board.
Information to include in your request includes your name, address, business name, ID number, and a description of the relief you are seeking. You should specify the order of the Review Board that you are protesting and the amount of the assessment. Please provide the reason why you are in disagreement with the assessment and supply the information needed to support your reason.
If you do not timely file the request with the Executive Director of the Board of Tax Appeals, your appeal will be untimely and the order of the Review Board will become final. Mailing your request is not filing your request. If you wish to appeal the decision of the Review Board to the Board of Tax Appeals, it is your responsibility to make sure that your written request is received by the Executive Director within this 60-day period.
If you do not attend your hearing as scheduled or fail to timely file your written appeal, your appeal will be considered withdrawn and the order of the Review Board will become final and will not be subject to further review by the Department of Revenue, the Board of Tax Appeal, or a court.
Either you or the Department of Revenue may appeal the decision of the Board of Tax Appeals to court.
If you disagree with the decision of the Board of Tax Appeals, you have 60 days from the mailing date of the order of the Board to make an appeal to the Chancery Court. The findings and the order of the Board of Tax Appeals will become final and not subject to further review if you fail to file a petition within the 60-day period.
Upon the decision of the court, either you or the Department of Revenue may appeal the decision to the Mississippi Supreme Court.
While all information provided to the agency is confidential, if an assessment reaches the point that a lien is filed against you, or if your appeal should go to court, then the assessment information will become public
Taxpayers and tax preparers are responsible for being aware of the Mississippi tax laws, rules and regulations. Access to this information is available online at www.dor.ms.gov. Taxpayers may also contact the Department of Revenue if you have any questions about this information.
It is your responsibility to maintain books and records sufficient to calculate your tax liability. Some assessments for additional tax result from the lack of records and documentation to support revenue calculations and expense deductions. The law provides that when these records do not exist, the Department of Revenue may use other information available to calculate your liability.
It is your responsibility to provide the Department of Revenue with your correct mailing address and contact information. Notices and assessments are sent to the most recent address on record. If mailed to this last known address, you are presumed to have received the notice or assessment.
Department of Revenue offices are open Monday through Friday, 8:00 a.m. to 5:00 p.m. CST.
Review Board 601-923-7440
P. O. Box 22828
Jackson, MS 39225
This publication provides general information and does not constitute a regulation of the Department of Revenue. Please be aware that legislation, regulations, court decisions, notices, and announcements could affect the accuracy of this publication. January 1, 2015.