North Carolina Taxpayers' Bill of Rights


As a taxpayer, you are always entitled to fair, professional, prompt and courteous services. The goal of the North Carolina Department of Revenue (the "Department") is to apply the tax laws of this State consistently and fairly so that your rights are protected and that you pay only your fair share of North Carolina tax.

The Taxpayers' Bill of Rights includes:

Protection of Privacy

It is your right to have information about your tax history, financial situation, and assessments or reviews kept in strict confidence. Any return information, correspondence, or Departmental discussions concerning your tax situation are confidential. Employees or former employees who violate this confidentiality are subject to criminal prosecution and possible fines. An employee who willfully discloses tax information is also subject to dismissal.

Examination of Your Return

The Department routinely examines returns to ensure taxpayers comply with tax statutes. If the Department examines your return, the Department may ask you to provide information to verify items on your return.

Examinations are done by mail or through personal interviews with auditors. You have the right to ask that the examination be held at a time and place convenient for you and the auditor.

You are entitled to a fair examination and an explanation of any changes the Department proposes to your return. Examinations do not necessarily mean you owe additional taxes. The examination may be closed without any changes to your return, or you could receive a refund of overpaid taxes from the Department.

Representation

During any examination or conference, you may have an attorney, accountant, or designated agent present. You can authorize another person to represent you if you execute a written power of attorney. Form Gen-58, “Power of Attorney and Declaration of Representative,” is on the Department’s website at www.dornc.com/downloads/fillin/Gen58_webfill.pdf.

If you wish, the Department will suspend the proceedings at any time to permit you to consult with your authorized representative.

Penalties and Interest

By law, the Department of Revenue is required to assess penalties for the following:

• Late Filing of Returns

• Late Payment of Tax

• Negligence

• Fraud

• Bad Checks or Bad EFT Payment

You have the right to request penalties be waived. The Department waives penalties in accordance with its “Penalty Waiver Policy,” which is on the Department’s website at www.dornc.com/practitioner/waiverpolicy.pdf.  Interest accrues on unpaid taxes from the date the tax was due until the date the tax is paid. The law does not permit the Department to waive interest that accrues on unpaid taxes.

To request a penalty waiver, you should pay the tax and interest due and submit Form NC-5500, “Request to Waive Penalties,” located on the Department’s website at www.dornc.com/downloads/penalty.html or by calling 1-877-252-3052. Your request for penalty waiver should be mailed to North Carolina Department of Revenue, Customer Service, P.O. Box 1168, Raleigh, NC 27602-1168.

Refund of Overpaid Tax

If you believe you have overpaid your taxes, you may request a refund by filing an amended return or claim for refund (“Claim”) within the statute of limitations for obtaining a refund of an overpayment. In general, the statute of limitations for obtaining a refund of an overpayment is the later of three years after the due date of the return or two years after payment of the tax. For a Claim filed within the statute of limitations, the Department must take one of the following actions within six months after the date the Claim is filed: (1) send the requested refund to you; (2) adjust the amount of the refund; (3) deny the refund; or (4) request additional information. If the Department does not take one of the actions within six months, the inaction is considered a proposed denial of refund, and if you disagree with the proposed denial of refund, you may file a request for Departmental review within the time period provided in G.S. 105-241.11.

If the Department selects your Claim for examination, you have the same rights you would have during an examination of your return. If the Department determines that your Claim was not filed within the statute of limitations, your refund request will be denied and the Department will issue a notice of denied refund. If you disagree with the Department’s determination, you may file a petition for a contested tax case at the Office of Administrative Hearings (“OAH”). If you elect to file a petition with OAH and the court ultimately finds that the Department’s determination that the statute of limitations for requesting a refund had expired was incorrect, the case will be returned to the Department for further consideration. The Department’s notice of denied refund will provide the appeal procedures you must follow to contest the Department’s determination. If you elect not to file a petition with OAH, the Department’s determination will be final.

Request for Departmental Review

If you object to a notice of proposed denial of refund or a notice of proposed assessment, you may request a Departmental review of the action if the request is made in writing and is filed with the Department within 45 days of the date the notice was mailed to or delivered to you. If a request for a Departmental review is not filed in a timely manner, the proposed action is final and is not subject to further administrative or judicial review. An assessment for an amount shown due on a return but not paid, or the application of a refund against debts owed to State, local agencies, or the Internal Revenue Service is not subject to Departmental review. To request a Departmental review, submit Form NC-242, “Objection and Request for Departmental Review.” The form is available at www.dornc.com/downloads/nc242.pdf or by calling 1-877-252-3052. The form must be mailed to the North Carolina Department of Revenue, Customer Service, P.O. Box 471, Raleigh NC 27602-0471.

Upon receipt of a timely request for Departmental review, the Department will take one of the following actions: (1) make the refund or cancel the assessment; (2) schedule a conference; or (3) request additional information. A conference is an informal proceeding at which you and the Department attempt to resolve the case. If a conference is necessary, the Department will set the time and date and notify you at least 30 days prior to the date for the conference. The date set for the conference may be changed by mutual agreement.

Final Determination after Departmental Review

If the issues cannot be resolved, the Department will issue a Notice of Final Determination (‘NOFD”). The NOFD will state the basis of the determination. The NOFD issued for a proposed assessment will also show the amount of tax, penalties, and interest you owe and the collection options available to the Department if the amount shown due is not paid and you do not contest the final determination. The NOFD will provide the appeal procedures you must follow to contest the final determination.

Contested Tax Case

If you disagree with the NOFD or the denied refund based on the Department’s determination that the refund claim was not filed within the statute of limitations, you may file a petition for a contested tax case hearing with the Office of Administrative Hearings (OAH). The OAH has impartial administrative law judges that hear cases that individual citizens and businesses file against government agencies. A petition for a contested tax case may be filed only after the Department has issued a Notice of Final Determination or a notice of denied refund based on the Department’s determination that the refund claim was not filed within the statute of limitations. If you disagree with the OAH final decision, you may seek further judicial review of your case by filing a petition in the Superior Court of Wake County in accordance with the procedures for a mandatory business case as set forth in G.S. 7A-45.4(b) through (f). However, you must pay the amount of tax, penalties, and interest as stated in the final decision before filing the petition. The appeal information given here is a general description of your appeal rights and does not cover all situations. For further information visit the Office of Administrative Hearings website at www.ncoah.com .

Collections

You are responsible for the full amount of tax you owe, but the Department will not take action to collect from you until you have had an opportunity to pay voluntarily. It is important that you respond promptly if the Department contacts you for payment. If you do not pay the amount of tax, penalty, and interest you owe within 90 days after a notice of collection was mailed to you, the law requires the Department to add a 20% collection assistance fee to your debt. The fee does not apply if you enter into an installment payment agreement with the Department before the fee is imposed.

If you do not pay in full, the Department may garnish your wages, bank account, or other funds, seize and sell personal property, issue a tax warrant to your sheriff, or record a certificate of tax liability against you. If you willfully fail to pay the tax, you may be subject to criminal charges. If the Department believes that you owe tax and collecting that tax is in jeopardy, the Department can immediately assess and collect the tax. You are entitled to a Departmental review of the actions taken on the jeopardy assessment. If you disagree with the review findings, you have the right to bring civil action in Superior Court.

Taxpayer Assistance

You can check the status of your individual income tax refund 24 hours a day, 7 days a week at 1-877-252-4052, or you may check the status online at https://eservices.dor.nc.gov/wheresmyrefund/SelectionServlet .  

If you need tax forms or other assistance with individual income, withholding, sales and use, or corporate income and franchise taxes, please call 1-877-252-3052. For privilege license general assistance, please call 1-877- 252-3052. For assistance with bills or notices, please call 1-877-252-3252. For assistance with excise tax, please call 1-877-308-9092. For assistance with all other taxes administered by the Department, please call 1-877-308-9103.

You may also access the Department’s website at www.dornc.com , or you may write the Department at:

N.C. Department of Revenue
Customer Service
P.O. Box 1168
Raleigh, NC 27602

Recorded information on commonly asked individual income, withholding, sales and use, and corporate income and franchise tax questions is also available. You can call the Department 24 hours a day, 7 days a week at 1-877-252-3052.

The hearing impaired with TDD service can contact Relay North Carolina at 1-800-735-2962 for assistance.