Section 39-21-103 - Hearings(1) As soon as practicable after any tax return or the return showing the value of oil and gas is filed pursuant to articles 22 to 29 of this title, article 60 of title 34, or article 3 of title 42, C.R.S., the executive director shall examine it and shall determine the correct amount of tax. If the tax found due is greater than the amount theretofore assessed or paid, a notice of deficiency shall be mailed to the taxpayer by first-class mail as set forth in section 39-21-105.5.(1.5)(a)(I) No later than December 15, 2021, collegeinvest shall provide the department with a secure electronic report containing the name and social security number, and the amount of the distribution, of each account holder of a colleginvest account who is also a Colorado taxpayer making a distribution in the reporting tax years commencing on or after January 1, 2017, but before January 1, 2021.(II) The department shall examine a risk-based sample of the information provided by collegeinvest under subsection (1.5)(a)(I) of this section to substantiate that any distribution from a collegeinvest account was made for the reasons specified in section 39-22-104(4)(i)(III), and shall determine the correct amount of tax for any taxpayer that made unqualified distributions. If the tax that is found due is greater than the amount assessed or paid, the department shall notify the taxpayer as set forth in subsection (1) of this section.(b) For income tax years commencing on or after January 1, 2021, the executive director shall regularly examine a risk-based sample of the information provided by collegeinvest under section 39-22-104(4)(i)(V) to substantiate that any distribution from a collegeinvest account was made for the reasons specified in section 39-22-104(4)(i)(III), and shall determine the correct amount of tax for any taxpayer that made unqualified distributions. If the tax that is found due is greater than the amount assessed or paid, the department shall notify the taxpayer as set forth in subsection (1) of this section.(c) The executive director shall provide a report of the examinations required under subsections (1.5)(a) and (1.5)(b) of this section, consistent with section 39-21-113(5), as part of the department's presentation to its committee of reference at a hearing held pursuant to section 2-7-203(2)(a) of the "State Measurement for Accountable, Responsive, and Transparent (SMART) Government Act".(2) The taxpayer may request a hearing on the proposed tax by application to the executive director within thirty days of the mailing of a notice of deficiency.(3) The request for hearing shall set forth the taxpayer's reasons for and the amount of the requested changes in the deficiency.(3.5) If the executive director determines that a request for a hearing related to the tax set forth in part 1 of article 22 of this title is a frivolous submission and rejects the request pursuant to section 39-21-104.5, the taxpayer shall not be entitled to a hearing before the executive director and the provisions of section 39-21-104.5 shall apply.(4) The executive director of the department of revenue shall notify the taxpayer in writing of the time and place for such hearing thirty days prior thereto. The hearing must be held at a location designated by the executive director in either Adams, Arapahoe, Boulder, Broomfield, Denver, Douglas, or Jefferson county, or, at the election of the taxpayer, by video conference; except that, if the taxpayer resides or has their principal place of business in Colorado and the disputed deficiency is either two hundred dollars or less, or involves sales and use taxes regardless of the amount, then the hearing may be held, at the election of the taxpayer, in the district office of the department nearest to the place where the taxpayer resides or has their principal place of business in Colorado.(4.5) If the taxpayer and the executive director agree that the disposition of the taxpayer's requested changes requires the resolution of a question of law arising under the United States or Colorado constitutions, the executive director shall memorialize the agreement and send the taxpayer a notice of the agreement by first-class mail as set forth in section 39-21-105.5. If a notice is sent pursuant to this subsection (4.5), a taxpayer may elect to waive a hearing pursuant to this section and appeal the notice of deficiency directly to the district court pursuant to section 39-21-105 within thirty days after the mailing of the notice.(5) After a hearing under this section, the taxpayer shall not be entitled to a second hearing before the executive director of the department of revenue on the matters set forth in his previous request for hearing.(6)(a) Except as provided in paragraph (b) of this subsection (6), the hearing shall be held before the executive director of the department of revenue.(b) In cases where the disputed deficiency is more than two hundred dollars and involves an income tax, the hearing may be held before such qualified person within the department specifically authorized by the executive director to act on the executive director's behalf to hear such dispute. In cases where the disputed deficiency is two hundred dollars or less or involves a sales, use, or gift tax, the hearing may be held before such person within the department as the executive director shall designate.(c) The executive director or the executive director's delegate is authorized to administer oaths and take testimony. At the hearing, the taxpayer may assert any facts, make any arguments, and file any briefs and affidavits the taxpayer believes pertinent to the case.(7) In lieu of the request for hearing within the time provided by this section, the taxpayer may, at his election, file a written brief and such other written materials or documents as he deems appropriate and request that the executive director of the department of revenue reconsider the deficiency without a hearing. The executive director shall reconsider the deficiency in the same manner as if the written material submitted had been presented at a hearing pursuant to this section. The submission of written material shall be considered for all purposes the same as a request for and submission of the material at a hearing.(8)(a) Based on the evidence presented at the hearing or filed in support of the taxpayer's contentions or after the expiration of thirty days from the mailing of the notice of deficiency, if no request for hearing or brief has been filed by the taxpayer, the executive director of the department of revenue shall make a final determination within the time specified in paragraph (b) of this subsection (8) and shall send the taxpayer a notice of final determination accompanied by notice and demand for payment by first-class mail as set forth in section 39-21-105.5.(b) The executive director shall make a final determination within sixty days of the hearing. Such deadline may be extended: (I) By up to an additional sixty days by mutual agreement between the executive director and the taxpayer; or(II) By the executive director in the executive director's discretion if the final determination raises issues that require additional information or time to analyze in order to make the determination. The executive director may authorize successive extensions of a deadline to make a particular determination; however, no individual extension authorized pursuant to this subparagraph (II) shall exceed sixty days. Prior to authorizing each extension of a deadline pursuant to this subparagraph (II), the executive director shall mail a written notice of the extension and the specific reasons therefor to the taxpayer.(c) The executive director may modify the tax, penalty, and interest questioned at the hearing and may approve a refund; except that no additional tax shall be assessed for less than one dollar. Unless an appeal is taken as provided in section 39-21-105, the tax, together with interest thereon and penalties, if any, shall be paid within thirty days after mailing of the notice and demand for payment by the executive director.Amended by 2021 Ch. 298,§2, eff. 6/23/2021.Amended by 2021 Ch. 93,§1, eff. 5/4/2021.L. 65: p. 1131, § 2. C.R.S. 1963: § 138-9-2. L. 73: p. 1417, § 101. L. 77: (1), (4), and (6) amended, p. 841, § 3, effective July 1; (1) amended, pp. 1766, 1852, §§ 2, 4, effective January 1, 1978. L. 79: (1) amended, p. 1499, § 21, effective January 1, 1980. L. 86: (1) amended, p. 1110, § 4, effective July 1. L. 89: (1) amended, p. 1594, § 5, effective July 1, 1993. L. 90: (1) amended, p. 1721, § 3, effective May 1; (1) amended, p. 1722, § 4, effective July 1, 1993. L. 96: (1) and (8) amended, p. 163, § 1, effective July 1. L. 2001: (1) amended, p. 777, § 8, effective June 1. L. 2002: (4.5) added and (6) and (8) amended, p. 256, § 1, effective July 1. L. 2003: (3.5) added, p. 661, § 1, effective March 20. L. 2009: (1) amended, (HB 09-1053), ch. 689, p. 689, § 11, effective August 5. L. 2021: (4) amended, (SB 21-223), ch. 375, p. 375, §1, effective May 4; (1.5) added, (HB 21-1311), ch. 1768, p. 1768, § 2, effective June 23.(1) Amendments to subsection (1) by House Bill 77-1076, Senate Bill 77-100, and Senate Bill 77-144 were harmonized.
(2) Section 2 of chapter 93 (SB 21-223), Session Laws of Colorado 2021, provides that the act changing this section applies to administrative hearings for which a taxpayer is notified in writing on or after May 4, 2021.
For the legislative declaration in HB 21-1311, see section 1 of chapter 298, Session Laws of Colorado 2021.