Louisiana Department of Revenue

Federal-State Match Program

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The Louisiana Department of Revenue has sent a notice and letter of inquiry to me saying that, because I filed a federal income tax return using a Louisiana address, I might also be liable for the filing of a state income tax return for the same year. How did the Department of Revenue receive this information?

The Louisiana Department of Revenue received this information under an exchange of information agreement that the department has entered into with the United States Internal Revenue Service. This agreement and the exchange of information are authorized by both federal and Louisiana law.

What information must I provide to the Louisiana Department of Revenue to show that I was not liable for Louisiana income tax or for the filing of a return for the year shown on the notice?

It is certainly possible — because of facts unknown to the department at the time that the department sent the notice and letter of inquiry — that a recipient of the letter is not liable for the filing of a Louisiana return for the year indicated on the notice. Among the potential reasons for non-liability:

• A person who moves into Louisiana after the start of the succeeding year, and who files his federal income tax return for the prior taxable year using a Louisiana address, will receive the letter of inquiry from the department concerning Louisiana income tax liability, even though the person was not a resident of Louisiana for any part of the prior taxable year, earned no income in Louisiana during that year, and owes no Louisiana income tax for that year. Any further inquiries or assessments of income tax liability for the prior year will be precluded, provided that the person furnishes information to the department concerning the state from which they moved to Louisiana and the date on which the move was made into Louisiana. A form is provided on the reverse side of the notice and letter of inquiry for furnishing this information to the department.
• A member of the United States military, who is stationed in Louisiana and who files his or her federal income tax return using a Louisiana address, will not be liable for Louisiana income tax if his or her home of record is a state other than Louisiana and neither the military person nor his or her spouse derived income from Louisiana other than the military income. The form on the reverse side of the letter of inquiry can be used to provide this information to the department.
• A person whose gross income, as reported on the federal return, is less than $12,000 is not required to file a Louisiana income tax return. The form on the reverse side of the letter of inquiry can be used to provide this information to the department. A copy of the federal income tax return must also be furnished.
• If a person wishes to cite reasons, other than those explained above, why Louisiana income taxes would not be due, the person must explain those reasons in a letter to the department. The letter should be sent to the same address shown on the notice and letter of inquiry:
  Louisiana Department of Revenue
  Collection Division
  P.O. Box 201
  Baton Rouge, LA 70821-0201
  

I received a proposed assessment for Louisiana income taxes for a prior year based upon the income that I reported on my federal return for that year without first having received the notice and letter of inquiry from the Louisiana Department of Revenue giving me the opportunity to provide information showing that taxes are not due. What steps can I now take to show that taxes are not due for that year so that the assessment can be set aside?

The department’s policy is to send the notice and letter of inquiry prior to sending any notice of proposed assessment. The notice and letter of inquiry is sent to the address shown on the taxpayer’s federal return, as provided to the department by the United States Internal Revenue Service. If the taxpayer has moved to another address since his or her filing of the federal return, and the U.S. Postal Service had no forwarding address for the taxpayer, the notice and letter of inquiry might not have been received.

The department sends the notice of proposed assessment that typically follows after no response is received to the letter of inquiry, however, to the most current address for the taxpayer that is available to the department, without regard to the address shown on the prior- year federal return. Very often, because of subsequent filings with the department, the Louisiana Department of Revenue has an address on file for a taxpayer that is more current than the address used on the prior-year federal return.

Any taxpayer, who believes that the taxes shown on the proposed assessment are not due, has the opportunity to provide information to the department supporting that position of non-liability, which might include including the potential reasons for non-liability shown above. The information must be provided to the department before the deadline shown on the proposed assessment.

I have already filed my Louisiana income tax return for the year covered by the notice or by the proposed assessment. What must I now do to show the department that the return has been filed?

Please provide the department with information as to the names and social security numbers shown on the return that was submitted. If the return was accompanied by a personal check, please furnish a copy of the front and back of the cancelled check. If the payment was by money order or cashier’s check, please furnish a copy of the cancelled original receipt. If the taxes were paid in cash to the department, please furnish a copy of the official department receipt.

If the return that was submitted showed no tax due or a refund due, please provide a complete copy of the return to the department. If the department’s records indicate that the refund was not issued, the department will issue a refund for the correct amount due.