Hypothetical: You have received a Notice of Proposed Assessment stating you owe use tax on materials purchased outside of Tennessee for use in constructing and installing cabinets in Tennessee homes.
Examples of communications that are prohibited, unless the taxpayer is given the opportunity to participate:
- Hearing officer asks auditor: Was your audit determination based on the fact that some of the cabinets were custom-made?
- Hearing officer calls auditor: Would your determination remain the same if the taxpayer was not performing the installations?
- Auditor emails hearing officer: I think that you should look at the invoices sent to Customers X, Y and Z, because they show that the taxpayer performed all of the installations itself.
Examples of ex parte communications that are always permitted:
- Hearing officer emails auditor: Can you send me a copy of the resale certificate that the taxpayer used for some of its purchases in Tennessee? Also, I need you to confirm the taxpayer’s sales tax account number.
- Auditor calls hearing officer: The taxpayer just provided me with copies of 30 invoices from its main supplier in Kentucky. I will send them to you today.