2022 Post Tax Season DOR Meeting

May 11, 2022

Working together

MTCPA + DOR

Each year the State Taxation Committee holds a meeting with Department of Revenue staff to discuss the filing season and how things can be improved in the future.  We greatly appreciate the time and effort put forth by both committee members and DOR staff.

Below are some of the topics we covered, click on the + to read more details of our discussions.

NOL Form

This year the DOR opened our meeting with a rundown on the Montana NOL issue.  At the core of the issue is the Baker Produce, Inc. vs. DOR court case that impacts nonresident taxes.  The form was delayed and impacted by this case and resulted in the form not being available to file till late in the tax season.  In hindsight, the DOR recognizes that amending and delaying the form caused  burden on the system and in the future the better course of action is to move forward with forms so they are available in a timely fashion. 

Forms

On the subject of forms, we discussed the philosophy toward changes.  DOR communicated that for future changes they will be evaluating if the change is substantive or not and will be avoiding small changes that do not have a significant impact.  We also talked about starting the process soon to craft the forms for when tax simplification is implemented. 

Notices

The DOR has been working on improving their notices to consistently include detail on the issue and who to contact to address the issue.  We talked about the timing of notices during tax season and DOR is planning to change their rules to give 45 instead of 30 days to respond to notices.  We also talked about sending copies of notices to preparers, to learn more about that click on the POA item below.

Power of Attorney

We discussed mailing notices to POA holders as a general practice.  The concern from the state's perspective is ensuring that information is not shared with the wrong people.  A couple of options were discussed to help lessen these fears:

  • Looking at the preparer listed on the most recent return.
  • Adding language on the return to request notices be sent to the preparer.

No resolution was found, but we will continue to work on this for the future.

Pass Through Entities 

We discussed SB 253 from the 2017 Session.  The issue is that complex entity structures tend to be difficult to properly enter into tax software and the state needs to ensure proper collection of taxes.  Specifically, foreign entities were discussed as an area of complication and compliance risk.  Another issue identified is the due date for some entities being before others makes filing difficult.  No clear resolution was discovered, but we agreed to continue the conversation.  

DOR Culture Change

A topic that wasn't necessarily on the agenda, but that came up in all our conversations, was the culture of the DOR.  Governor Gianforte and Director Beatty have challenged the Department to be the most taxpayer friendly DOR in the nation.  A few phrases DOR staff used:

  • No more gotchas, we assume taxpayers are innocent until the prove otherwise.
  • The legislature created credits, it is our job to help taxpayers properly earn those credits.
  • The goal is to get it right, not to get more money.

How are they doing?  If you have stories of good or bad expereinces please send them to Allen@Montana.CPA 

State Taxation Committee

Did reading this give you some FOMO (fear of missing out)?  If so consider joining the State Taxation Committee.  The group works together to improve the tax system here in Montana.