Alabama Considers Independent Judicial Review of Tax Controversies

by Stewart Weintraub

Introduced March 31, 2011, the Alabama House of Representatives is now considering HB 427 titled the Alabama Taxpayers’ Bill of Rights. One of the many highlights of HB 427 would be the abolition of the Department of Revenue’s Administrative Law Division and replacement with a new, independent state agency, the Alabama Tax Appeals Commission (“ATAC”). ATAC’s jurisdiction would include hearing appeals of tax and other matters administered by the Alabama Department of Revenue and, subject to an opt out provision, appeals related to certain local taxes levied by or on behalf of self-administered counties or municipalities.

HB 427 is modeled after the American Bar Association’s (“ABA”) Model Tax Tribunal Act (“Model Act”). The Model Act, a product of the ABA Tax Section State and Local Tax Committee, was adopted by the ABA House of Delegates at its August 7-8, 2006 meeting. HB 427 adopts as its legislative intent the stated purpose of the Model Act. As provided by HB 427, “[i]t is the intent of the Legislature that this act foster the settlement or other resolution of tax disputes to the greatest extent possible and, in cases in which litigation is necessary, to provide taxpayers with a fair, independent, pre-payment procedure to resolve a dispute with the Department of Revenue or, in certain cases, a self-administered county or municipality.”

HB 427 has been endorsed by the Alabama State Bar, Alabama Business Association Tax Coalition, Business Council of Alabama, Alabama Retail Association, Alabama Society of Certified Public Accountants, the Birmingham Business Alliance and the Council On State Taxation. HB 427 is not without opposition. Anyone with any business transactions in Alabama should be encouraged by the Alabama Legislature’s consideration of HB 427 and should communicate their support to the Alabama Legislature. Bruce Ely of Bradley Arant Boult & Cummings’ Birmingham office has been leading the Alabama State Bar effort. I know Bruce would be happy to communicate your support for HB 427 to the Alabama Legislature. You can communicate with Bruce at (205) 521-8366 or by email at bely at babc.com.

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