Instructions For Ohio Form Ft 1120fi - Ohio Corporation Franchise Tax Report

5. If the applicant does not request a hearing within the 60-day day

in R.C. 5703.47 from the date the Department of Taxation issues

period described in #2 but does provide additional information

the assessment until the date the taxpayer pays the assessment.

within that period, then the commissioner (a) must review the

See R.C. 5733.11. If the taxpayer decides to pay the assessment in

information, (b) may make such adjustments to the refund

full, such payment is not acknowledgment of agreement and will not

as the commissioner ﬁ nds proper and (c) must issue a ﬁ nal

prejudice the ﬁ nal determination of the petition, and the taxpayer will

determination. The taxpayer may appeal the commissioner’s

receive interest on any refund found due. See general instruction

ﬁ nal determination to the Board of Tax Appeals pursuant to R.C.

#10 for interest on underpayments and overpayments.

5717.02.

Uniform petition for reassessment procedure. R.C. 5703.60

Petition for Reassessment. Franchise taxpayers may initiate

establishes a uniform petition for reassessment procedure and a

review proceedings pertaining to a franchise tax assessment issued

uniform assessment correction procedure applicable to franchise

by the Department of Taxation by ﬁ ling Ohio form PR, Petition for

tax, individual income tax, pass-through entity tax, withholding tax,

Reassessment. Ohio form PR applies only to assessments (not to

school district income tax and various other taxes. If the taxpayer

proposed corrections) issued by the Ohio Department of Taxation.

has ﬁ led a proper petition for reassessment for a tax whose statute

speciﬁ es the uniform reassessment procedure applies, this law

A taxpayer must ﬁ le its petition within 60 days of receipt of the

permits the tax commissioner, upon receipt of additional information

assessment. If the taxpayer sends the petition by certiﬁ ed mail, the

from the taxpayer, to correct an assessment without issuing a ﬁ nal

date of postmark is considered the date ﬁ led. If the taxpayer sends

determination and without a hearing. The commissioner’s corrected

the petition by regular mail, the date the Department of Taxation

assessment issued in response to the taxpayer’s petition may

receives the petition is considered the date ﬁ led. The petition must

increase the original assessment outside the assessment statute

specify the items of the assessment objected to and the reasons for

of limitations period. In addition, this law permits the commissioner

those objections. However, a taxpayer who has timely ﬁ led a Petition

to correct an assessment even if the taxpayer did not properly ﬁ le a

for Reassessment may raise additional written objections to the

petition for reassessment or did not ﬁ le a petition for reassessment. A

assessment at any time prior to the date of the tax commissioner’s

more in-depth summary of this law is available in general instruction

ﬁ nal determination. If a taxpayer ﬁ les the petition after the 60-day

#26 of the franchise tax instructions for corporations that are not

period has expired, the tax commissioner will dismiss the petition

ﬁ nancial institutions. Those instructions are available in another ﬁ le

because the tax commissioner has no jurisdiction to consider a

on the Department of Taxation’s Web site.

late-ﬁ led petition.

21. Taxpayer’s Bill of Rights; Requests for an Opinion

The portion of an assessment that must be paid upon the ﬁ ling of

R.C. sections 5703.50 through 5703.54 establish certain

a Petition for Reassessment is as follows:

administrative procedures relating to Department of Taxation audits

and assessments. At or before the commencement of an audit

1. If the sole item objected to is the assessed penalty or interest,

the Department of Taxation must provide to the taxpayer a written

the assessed corporation must pay the entire assessment except

description of the roles of the department and the taxpayer during

for the penalty.

an audit and a statement of the taxpayer’s rights. A brochure that

2. If prior to the date of issuance of the assessment the assessed

discusses the Department of Taxation’s interpretation of this law is

corporation failed to ﬁ le (i) the annual report required by R.C.

available on the department’s Web site.

5733.02, (ii) any amended report required by R.C section

5733.031(C) for the tax year at issue, or (iii) any amended report

In addition, this law permits the tax commissioner to issue binding

required by R.C. 5733.067(D) to indicate a reduction in the

opinions regarding the taxation of proposed activities of the taxpayer.

amount of the credit provided under that section, the assessed

As set forth in Ohio Administrative Code (Tax Commissioner’s Rule)

corporation must pay the entire assessment except for the

5703-1-12 a request for an opinion of the tax commissioner must

penalty.

comply with the following:

3. If prior to the date of issuance of the assessment the assessed

• Be in writing;

corporation ﬁ led (i) the annual report required by R.C. 5733.02,

• Explicitly request an “Opinion of the Tax Commissioner”;

(ii) all amended reports required by R.C. 5733.031(C) for the

• Speciﬁ cally refer to R.C. 5703.53;

tax year at issue and (iii) all amended reports required by

• State all facts of the activity or transaction for which the opinion

R.C. 5733.067(D) to indicate a reduction in the amount of the

is requested;

credit provided under that section, and if a balance of the taxes

• Identify the parties involved in the activity or transaction about

shown due on the reports as computed on the reports remains

which the opinion is requested;

unpaid, the assessed corporation must pay only that portion of

• Set out the speciﬁ c legal question or questions for which the

the assessment representing any unpaid balance as shown on

opinion is requested; and

those reports together with all related interest.

• Be signed by an ofﬁ cer of the corporation authorized to act on its

4. If the assessed corporation does not dispute that it is a taxpayer,

behalf.

but claims the protections of section 101 of Public Law 86-272,

73 Stat. 555, 15 U.S.C.A. 381, as amended, the assessed

For further information see Rule 5703-1-12, Requests for an Opinion

corporation must pay only that portion of the assessment

of the Tax Commissioner, available on the Department of Taxation’s

representing any unpaid balance of taxes shown due on the

Web site.

corporation’s franchise tax report.

22. Sham Transaction, Economic Reality, Substance Over

5. If none of the conditions speciﬁ ed in (1), (2), (3) and (4) above

Form and Step Transactions

apply, or if the assessed corporation claims that it is not a

The tax commissioner has authority to apply the doctrines of “eco-

taxpayer (that is, if the assessed corporation disputes that it is

nomic reality,” “sham transaction,” “step transaction” and “substance

subject to the franchise tax), the assessed corporation is not

over form.” Generally the tax commissioner bears the burden of

required to pay any portion of the assessment.

establishing by a preponderance of the evidence that these doc-

However, any unpaid portion of the assessment that upon ﬁ nal deter-

trines should apply. However, with respect to transactions between

mination is found to be correct bears interest at the rate prescribed

members of a controlled group, the taxpayer bears the burden of

- 9 -

Instructions For Ohio Form Ft 1120fi - Ohio Corporation Franchise Tax Report - 2012 Page 10

Related Articles

Related forms

Related Categories