You received a Notice of Deficiency or Rejection of Refund Claim from the Colorado Department of Revenue. Now what should you do?
First, review the notice and compare it to your corresponding tax return. You should be able to see what changes the department made.
Research the change to see if it is accurate. The Department's guidance publications can help you more fully understand the nature of the tax or credit that was modified. The instructions and forms that correspond to your tax return are other good sources of information.
Types of Business Tax Billing Notices
- Adjustments the Department Makes to Your Return. The Department issues bills for adjustments or corrections it makes that result in additional tax due.
- Missed the Filing Deadline. The Department issues notices for penalty and interest when a return is not filed and paid on time. Both the return and the payment must be received by the due date of the return to be considered timely.
- No Tax Return Filed. The Department also issues notices when a tax return has not been received.
3. Respond or Remit
You may respond in one of two ways:
The notice you received should inform you what documentation the Department requires you to send. Provide the requested documentation. However, providing documentation is not a protest and does not preserve your protest rights.
File a protest. Be sure to enclose a copy of your notice with your response, and a cover letter that includes the following. You may also submit the protest through Revenue Online.
Name and address of taxpayer
Source Code (code listed in the upper-right of the letter)
The taxable period(s) involved
The amount(s) and kind(s) of tax in dispute
An itemized schedule of the findings with which the taxpayer does not agree
A statement summarizing the reasons the taxpayer believes the tax is not due
Affirmative or negative determination of taxpayer to use brief in lieu of hearing as provided in §39-21-103(7), C.R.S. You have the right to a hearing with the Executive Director, or you may file a written brief in lieu of the hearing. However, you have only 30 days from the mailing date of the notice to request a hearing or to file your written brief. By law this requirement cannot be extended or negotiated by the Department.
Taxpayer signature. Signature can be the named individual taxpayer, general partner of a partnership, officer of a named corporation, or an individual authorized by such proper person's power of attorney. If the written brief is prepared by counsel, counsel must also sign.
The Department will review your case in the order in which it was received.
For more information, visit the Taxation Disputes web page.
- OR -
Send the Colorado Department of Revenue your payment if you agree with the changes. Several payment options are available. For additional information on how to make a payment, visit the Tax Payments web page and select the tax type for your bill.
- Make a Payment on Your Account Electronically, through Revenue Online. Select Make a Payment. (not available for Cigarette, Tobacco, Liquor, Fuel or IFTA)
- By Mail: Use the payment voucher that came with the notice or see the instructions and forms page and select the appropriate tax type that applies to the notice.
- Request a Payment Plan (Income Tax Only): Set up a User ID and Password in Revenue Online if you have not already done so. Then you may request a payment plan online for income tax. Or you may call the Collections Section, 303-205-8291. For more information, visit the Payment Plan web page.