Effective January 1, 2009, the 2008 General Assembly enacted legislation that provides the opportunity, under specific circumstances, for a taxpayer to request that the Department of Revenue document advice given to the taxpayer regarding the application of tax. A taxpayer is not liable for any penalty or additional assessment of tax attributable to erroneous advice furnished if the Department’s records establish that the Department provided erroneous verbal advice, the taxpayer reasonably relied on the advice, and adequate and accurate information was provided by the taxpayer.
A taxpayer may request that an employee document advice given if a conversation is conducted by telephone or in person at the office of the employee. A conversation occurring at a presentation, a conference or a similar forum is not subject to documentation. A taxpayer should make a request for documentation of advice at the beginning of a conversation to ensure that the proper information is obtained.
A taxpayer must give the Department employee identifying information, which can include the taxpayer’s name, social security number, federal identification number, or a Department of Revenue account number. The nature of the inquiry must be to ask about the application of a tax administered by the Department to the taxpayer in specific circumstances. Any advice given will not be documented unless a taxpayer specifically makes a request for such action at the time of the conversation.
The Department is required to make an entry into the account record of a taxpayer when a request for documentation of a conversation is made. The Department’s records will include a taxpayer’s identification information, the date of the conversation, the question(s) asked, and the advice given. A taxpayer may request that a printed copy of the documented advice be mailed to them.
It is strongly recommended that a taxpayer that has a complex question make a written request for advice. This method allows for a full accounting of the facts and circumstances and provides the Department the opportunity to conduct research if necessary. The Department will respond in writing and a taxpayer can rely on the written advice in the same manner as verbal advice. In circumstances where, in the opinion of a Department employee, a determination as to the application of tax cannot be made from the information discussed in a conversation, a taxpayer will be advised that the question needs to be submitted in writing and verbal advice will not be given.
Written requests for advice can be submitted to the following address:
Tax Schedule Division (Corporate Income, Personal, Sales and Use, etc.)
North Carolina Department of Revenue
P.O. Box 25000
Raleigh, N.C. 27640
Effective July 1, 2009, the Department is required, at the request of a taxpayer, to document verbal advice given a taxpayer regarding the taxpayer’s obligation to register with the Department for sales and use tax purposes. The taxpayer must not be registered as a retailer or wholesale merchant and must provide their name and address, a description of the business in which they are to be engaged, and ask if they are required to register for sales and use tax purposes. The Department is required to keep a record of the inquiry that sets out the date of the conversation, the name of the person making the inquiry, the type of business described by the taxpayer, and the advice given. A taxpayer may request a copy of the advice given be mailed to them.