Tennessee Add-Back Assessments - Taxpayers May Need to Act Soon to Preserve Appeal Rights



The Tennessee Department of Revenue (“Department”) recently sent notices of assessment to numerous taxpayers disallowing deductions for intercompany intangible expenses. The Department states in the notices that it is adding back the expenses because the deductions lack “business purpose.” Many of these notices were dated December 18, 20091 which is important because taxpayers that received an assessment have only 30 days to request an informal conference. For some taxpayers, the request for an informal conference must be filed by today, January 19.

If a taxpayer timely files a request for an informal conference, the Department must schedule the conference within 20 days of the request, and the Department must hold the conference within 90 days of the request. The informal conference is held by a Department conferee. Following the conference, aggrieved taxpayers may appeal the matter to the Tennessee Chancery Court. If an informal conference is not timely requested, taxpayers that wish to challenge the assessment can either pay the assessment and file a refund claim or file suit in Chancery Court within 90 days of the mailing date of the assessment.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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