Nicole F. Gould, M.B.A., J.D.
State and Local Tax Controversy
Grounds for granting a refund of an overpayment due to:
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State
|
Local
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| Taxpayer’s error in mathematical computation |
X
|
X
|
| Taxpayer’s construction of the law contrary to the collector’s at the time of payment |
X
|
X
|
| Taxpayer’s or Collector’s error, omission, or a mistake of fact of consequence to the determination of the tax liability |
X
|
X
|
| Collector’s change made in an assessment, notice, or billing |
X
|
X
|
| Subsequent determination taxpayer was entitled to pay tax at a reduced rate |
X
|
X
|
| Payment exceeded the amount shown on the return or voucher |
X
|
X
|
La. R.S. 47:1621 and 337.77
Issuance and Reversal of the Refund:
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State
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Local
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| A refund ordered by judge must be issued in 45 days from the date the judgment becomes non-appealable. |
X
|
|
| Before the Collector issues a refund, he may determine if the taxpayer owes any other liability the Collector administers and credit that liability instead of issuing a refund. |
X
|
X
|
| Collector can use any collection means to recover a refund later-determined not an overpayment within 2 years from December 31 of the year the refund was paid. |
X
|
X
|
| Collector can use any collection means to recover a credit made later-determined not an overpayment within 2 years from December 31 of the year the refund was paid. |
X
|
|
La. R.S. 47:1621, 1622, 337.77 and 337.78.
Interest on the refund of overpayment
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State
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Local
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| Interest is provided the taxpayer on an overpayment if it is credited against another liability. |
*
|
X
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| Only 2% interest for first 60 days after the refund claim is made as penalty if the overpayment is due to taxpayer administrative error. |
|
X
|
| Interest begins to accrue at 2 % on an overpayment from the date of payment until the refund is requested. |
|
X
|
| Judicial interest accrues on an overpayment from the date of refund request, notice of payment under protest, or notice of intention to file suit to recover the overpayment until paid. |
|
X**
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| Judicial interest accrues on an overpayment refund or credit beginning with the later of: date the return was due, the date the first return for that period was filed, or the date the tax was paid until paid. |
X
|
|
| No interest is paid if taxpayer deliberately overpaid tax to gain interest. |
X
|
X
|
| No interest on refund or credit to pre-petition tax periods for taxpayers in bankruptcy. |
X
|
X
|
La. R.S. 47:1624 and 337.80.
*Presumably, the state does not provide interest on an overpayment credited to the taxpayer’s account because there will be an offset of interest having accrued on the liability being credited. La. R.S. 47:1624
**The local rate of interest on refunds initially appears to be less, but should be nonetheless judicial interest pursuant to La. R.S. 13:4202.
Deadline to Make Refund Claim
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State
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Local
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| Later of:i) December 31st, 3 years from date the tax was due, orii)1 year from date the tax was paid. |
X
|
X
|
| Claim for refund must be filed with the Secretary before the deadline |
X
|
|
| Claim for refund must be received by the Collector before the deadline |
|
X
|
La. R.S. 1623 and 337.79.
After the Refund is Denied or Ignored.
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State
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Local
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| If the Collector fails to act for 1 year or denies the refund claim, the taxpayer may request redetermination hearing within 30 days with the Collector. |
|
X
|
| The Secretary’s failure to respond to the refund claim is deemed a denial after 1 year. |
X
|
|
| Days from the Secretary’s/Collector’s date of certified mailing, denying the refund, the taxpayer has to appeal. |
60
|
30
|
| Forum in which the taxpayer appeals the denial of refund |
BTA
|
District Court or Mandatory Arbitration
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| Once appeal is lodged, the Collector may assert a demand for any tax, interest or penalty due from refund tax period.* |
X
|
X
|
La. R.S. 1625 and 337.81.
*The constitutional prescription of taxes should remain except for that amount needed to offset a refund claim.
Nicole Gould Frey
BSW Tax Blog 