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State Tax Appeals Procedure Guide 

The Office of Hearings & Appeals is part of the Revenue Division of the Arkansas Department of Finance and Administration (“Department”). It is an impartial third party between the Department and taxpayers. It is separate from the Department's audit and legal counsel offices and consists of Administrative Law Judges who are appointed by the Commissioner of Revenue. Each judge is an attorney licensed to practice law by the State of Arkansas with a minimum of five years legal experience. Their sole function is to hear cases and determine controversies between taxpayers and the Department regarding taxes, licenses, and permits. The judge generally presides alone.

In 1980, the Arkansas Legislature established the Office of Hearings & Appeals to give Arkansas taxpayers a fair and convenient way to resolve disputes involving the administration of state tax laws. It is located in Room 2360 of the Joel Y. Ledbetter Building on the corner of Seventh and Wolfe Streets in Little Rock, Arkansas.

To contact the Office of Hearings & Appeals during regular business hours (8:00 a.m. to 4:30 p.m. weekdays), call (501) 682-7003. The fax number is (501) 683-2098. The office is closed weekends and on state holidays. The mailing address is: 
 
Office of Hearings & Appeals
Joel Y. Ledbetter Building
1816 W 7th St, Room 2360
P. O. Box 1272
Little Rock, AR 72203
 
The Office of Hearings & Appeals hears disputes involving Arkansas tax laws under either the Arkansas Tax Procedure Act, as set forth in Ark. Code Ann. § 26-18-101 et seq., or the Arkansas Administrative Procedure Act, as set forth in Ark. Code Ann. § 25-15-101 et seq. Most tax disputes involve the Arkansas Tax Procedure Act, which includes the following:

  • Gross Receipts Tax (Sales Tax)
  • Compensating Tax (Use Tax)
  • Individual Income Tax
  • Corporate Income Tax
  • Motor Fuel Tax
  • Severance Tax
  • Estate Tax
  • Real Property Transfer Tax
  • Income Tax Withholding
  • Beer and Liquor Excise Tax
  • Wine Tax
  • Waste Tire Fees
  • Soft Drink Tax
  • Refund Denials / Vendor Assignments
  • Expedited Business Closures

The Arkansas Administrative Procedure Act covers the revocation of certain specific retail permits or licenses. Arkansas Administrative Procedure Act hearings are open to the public, while Arkansas Tax Procedure Act hearings are closed. Only you, your representatives, witnesses and Department representatives can attend Arkansas Tax Procedure Act hearings.

The Office of Hearings & Appeals does not hear disputes regarding driver's licenses or alcoholic beverage control enforcement. Such matters are heard by hearing officers or commissioners from those offices. For information on taxes not mentioned above, please contact: 
 
Problem Resolution and Tax Information Office
Joel Y. Ledbetter Building
1816 W 7th St, Room 2460
P. O. Box 1272
Little Rock, AR 72203-1272
(501) 682-7751
 
How The Hearing Process Works 
 
The Arkansas Tax Procedure Act provides taxpayers the opportunity for relief from tax assessments or refund claim denials made by the Department. When you receive a "Notice of Proposed Assessment" document, which describes the type of tax involved, tax period(s), amount of tax, and any assessed penalties and interest due, you have 60 days to file a protest in writing and request a hearing. There are no filing fees or other costs if you request a hearing.

To file a written protest, state your reason(s) for opposing the proposed assessment or refund denial. You may request a hearing where you can present evidence and witnesses to prove your case, or simply submit written documents to be considered by the Administrative Law Judges. If you choose to have a hearing, you will receive notice of the location and time. If you choose to submit written documents but did not do so when the protest was originally filed, you will receive notice when your documents are due at the Office of Hearings & Appeals.

Once you have filed a protest, a case will be established on the Office of Hearings & Appeals' docket. Most hearings are held in Little Rock. At the request of the taxpayer, hearings can be held at any of the following locations:

  • Seventh & Wolfe Streets, Joel Y. Ledbetter Building, Room 2360, Little Rock
  • 408 Court Street, Arkadelphia
  • 3104 Catalpa, Pine Bluff
  • 2705 Paula Drive, Jonesboro
  • 616 Garrison, Room 203, Fort Smith
  • 1501 SE Walton Blvd., Suite 213, Bentonville

Prior to a hearing, you will receive a "Notice of Hearing" and a "Prehearing Information Request" form. The request should be returned to the Office of Hearings & Appeals within 20 days of receipt. All parties must exchange completed request forms. You must state the reasons you are contesting the tax, penalty, or interest imposed by the Department.

You should address in detail all facts that support your case. The Department should do the same. If known, include any laws, statutes, regulations, or cases upon which you rely.

The Prehearing Information Request form allows parties to focus on the dispute and possibly reach a settlement prior to a hearing.

You should include names and addresses of all witnesses who will testify at the hearing on the request form. If you intend to call a Revenue Division employee as a witness, you should contact the Office of Revenue Legal Counsel and make arrangements with the attorney assigned to the case. To contact the attorney, call (501) 682-7030. The fax number for the Office of Revenue Legal Counsel is (501) 682-7599, and the mailing address is:
 
Office of Revenue Legal Counsel
Joel Y. Ledbetter Building
1816 W 7th St, Room 2380
P.O. Box Box 1272
Little Rock, AR 72203-1272 
 
An Administrative Law Judge will preside over the hearing. Hearings are informal and confidential. You are able to easily present testimony and other evidence. The Administrative Law Judge may follow the Arkansas Rules of Evidence when considering your case. Because many disputes involve audits, personnel from tax sections may also be present.

You are entitled to representation. It is best to obtain representation early so the representative will be familiar with your case. Should you need representation once the hearing begins, the Administrative Law Judge may grant a continuance and reschedule the hearing. You are not required to hire a representative. You may represent yourself.

Either the Taxpayer or the Agency may request a postponement of a scheduled hearing for reasonable cause. The request for the postponement should be made as early as possible, preferably in writing. However, requests may be made by telephone in emergencies. The request should be made to the Administrative Law Judge assigned to the hearing.

Certain cases, such as issuance of some licenses, arise under the Administrative Procedure Act. In these instances, subpoenas are issued through the Circuit Clerk in either Pulaski County or the county where the Taxpayer has his principal business location.

During the hearing, it is important that you understand any question that you are asked. You have the right to ask for clarification of questions during the hearing.

Arkansas Tax Procedure Act hearings are audio taped for use by the Administrative Law Judge when preparing the Administrative Decision. Transcripts of these hearings are not provided to the taxpayer or the Department. Arkansas Administrative Procedure Act hearings are recorded by a certified court reporter, and you may request a copy of the transcript from the reporter at your expense.

The Administrative Law Judge considers prehearing motions, administers oaths and affirmations, receives oral and documentary evidence, issues subpoenas, closes the record, and makes a final ruling or decision.

After calling the hearing to order, the Administrative Law Judge will ask both sides to identify witnesses. The Administrative Law Judge will swear in all witnesses. During opening statements, you or your representative and the attorney for the Department will be asked to identify issues and any conceded facts. Next in the hearing process, the Department takes testimony from witnesses and introduces documents. You have the right to object to any evidence and to cross-examine witnesses.

At the conclusion of the Department's presentation, you may present testimony using witnesses and documents. After all testimony, documents, and arguments are presented, the Administrative Law Judge prepares an Administrative Decision. In cases with complex issues, the judge may request that briefs be filed on the legal issues involved. Either side may also request that briefs be filed.
 
The Administrative Decision Process
 
The Administrative Law Judge reviews all written documents, testimony, statutes, relevant court cases, and other evidence prior to making his decision. The Administrative Law Judge has the option of ruling immediately from the bench or delaying his decision in order to more closely examine the testimony. In either case, a written decision will be mailed to you. Because some tax issues are more complex than others, the time in which a decision is made will vary. Once all documents, evidence, and testimony are presented, a written decision is usually made within 30 days. Complex cases may require additional time.

The Administrative Law Judge's decision includes the issue(s), facts relating to the issue(s), legal reasoning applied to the facts, and conclusions of law. The Administrative Decision will also include your appeal rights and the revision rights of the Commissioner of Revenue. 
 
Revision Rights of the Taxpayer and the Commissioner of Revenue Under the Arkansas Tax Procedure Act
 
A Taxpayer has 20 days from the mailing of the Administrative Decision to request in writing that the Commissioner of Revenue review and revise the decision. If you do not timely request a revision, the Administrative Decision will become the final determination of the agency. Regardless of whether you requested a revision, the Commissioner of Revenue may revise the Administrative Decision on his own motion within those same 20 days. The revision request should be addressed to:
 
Commissioner of Revenue
Joel Y. Ledbetter Building
1816 W 7th St, Room 2440
P. O. Box 1272
Little Rock, AR 72203-1272
(501) 682-7000
 
You may seek judicial relief from the final decision of the Administrative Law Judge or the Commissioner of Revenue on a final assessment of a tax deficiency by following the procedure set forth in Ark. Code Ann. § 26-18-406. The procedure for appeal to Circuit Court is discussed below.
 
The Calculation Of Interest

 
Interest on the amount of delinquent tax will continue to accumulate during the appeals process. Interest will be added to the assessment at a rate of 10 percent annually. You may avoid additional interest by paying the tax immediately. If the judge rules in your favor, the tax paid will be refunded to you. The refund will include interest at a rate of 10 percent annually.
 
Appeal to Circuit Court Under the Arkansas Tax Procedure Act
 
Upon receipt of an unfavorable decision from the Commissioner, you may appeal to Circuit Court per Ark. Code Ann. § 26-18-406. The Department, however, has no right to an appeal from an adverse decision made by the Commissioner of Revenue. In order to pursue an appeal to Circuit Court, you must do one of the following:

  1. Within one year of the date of the final assessment, pay the total amount of tax, penalty, and interest determined to be due and file suit to recover that amount within one year from the date of the payment; or,
  2. Within 30 days of the issuance of the notice and demand for payment, file a bond in double the amount of the tax deficiency and file suit within 30 days after filing the bond.

Appeal to the Supreme Court of Arkansas
 
You may appeal the Circuit Court decision to the Supreme Court of Arkansas as in other cases provided by law.
 
Appeal to Circuit Court Under the Administrative Procedure Act
 
The Office of Hearings and Appeals makes the final agency determination regarding Administrative Procedure Act cases.

There is no appeal to the Commissioner of Revenue. Any appeal is made directly to Circuit Court under Ark. Code Ann. § 25-15-212.
 
This Guide was prepared by the Office of Hearings & Appeals (Revised 10/30/2013)