Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2013
Sales and Use Tax Annotations
465.0000 REMEDIES OF TAXPAYERS
465.0030 Withdrawal of Petition for Redetermination. At a preliminary hearing on a taxpayer's petition for redetermination, the audit staff orally stated that the petitioner might be liable for additional tax on manufacturing aids. The staff indicated its intention to ascertain the amounts of such tax by further review of petitioner's records. The petitioner then sent a letter to the Board's headquarters' staff to withdraw its petition for redetermination. Thereafter, the Decision and Recommendation of the hearing officer was mailed to the petitioner, which directed the audit staff to make a reaudit to determine the amount of the additional tax with respect to manufacturing aids. Subsequently, the headquarters' staff sent a letter to petitioner notifying petitioner of a proposed increase in the determination for use tax on manufacturing aids.
The taxpayer contends that since its petition for redetermination has been withdrawn, the determination cannot now be increased.
There is nothing in the Sales and Use Tax Law which expressly authorizes or expressly prohibits withdrawal of a petition for redetermination. The Board, as a matter of administrative practice, does not allow petitions to be withdrawn. For every petition which is filed, a notice of redetermination is ultimately issued by the Board even if the taxpayer has indicated a desire not to pursue the matter any further. No petition for redetermination is simply dropped without a redetermination by the Board. If the Board allowed petitions to be withdrawn without redetermination, the original determination would therefore never become final and could never be collected. Since petitioner could not withdraw its petition, petitioner's attempt to do so is merely a waiver of attendance at any future hearings. (Petitioner will not be bound by this waiver. If petitioner wishes to have a Board hearing; one will be granted.)
The waiver of attendance at the Board hearing does not prohibit the Board from asserting a valid claim for increase or from increasing a determination. section 6563 provides that the Board may increase a determination at any time before it becomes final provided only that a claim for the increase is asserted at or before the Board hearing. The occurrence of a Board hearing is merely a limiting factor and not a condition precedent to asserting the increase. That is, if a Board hearing is held, the claim for increase must be asserted at or before the hearing. However, if a Board hearing is not held, the claim for increase may be asserted and the determination may be increased at any time before the determination become final.
In the above situation, although petitioner attempted to withdraw its petition; a redetermination has not been issued and the matter has not become final. Furthermore, a Board hearing has not as yet been held. Accordingly, the staff's letter to the petitioner is a timely claim for increase. 6/28/83.