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Connecticut sales tax notices

Got a letter from the Connecticut Department of Revenue Services (DRS)? Find it below to see what it means, why businesses usually receive it, and what to do next.

Sources checked

Tax authority

Connecticut Department of Revenue Services (DRS) (opens in a new tab)

Disagree with a notice?

To dispute a notice of assessment or other determination, including penalties from an audit, file a written protest with the DRS Appellate Division. Optional Form APL-002 can be used. Submit by mail or fax (860-297-4780). Include your name, address, Connecticut Tax Registration Number, Case Identification Number, the periods, and a factual and legal statement for each disputed issue. Interest keeps accruing on unpaid assessed tax during the protest. Form APL-004 (Deposit in the Nature of a Cash Bond) can limit interest.

Deadline: Received within 60 days, or U.S. postmark within 60 days, of the date of the notice of assessment (10 days for a jeopardy assessment)

Source: Connecticut Department of Revenue Services (DRS) (opens in a new tab)

Failure to file

The authority has no return on record for a period it expects one, often because an account is open but filings stopped.

Failure to file

Estimated assessment (delinquent return)

An assessment DRS issues for a delinquent return in myconneCT. It is based on the best information available, such as past filings, tax type, filing frequency, and industry. By statute, a penalty of 15% of the tax or $50, whichever is greater, is added to a sales and use tax estimate.

Why you got it

  • A sales and use tax return that was not filed by its due date

What to do

  1. Do not pay the estimated amount. Check which periods it covers against your records
  2. File the actual return and pay the actual tax due by the protest expiration date shown
  3. Then consider asking for a waiver of the late penalty on Form DRS-PW. DRS requires all tax and interest to be paid first, and interest cannot be waived
  4. If you still dispute the assessment, file a written protest within 60 days

Before you pay penalties: check whether you can ask for them to be waived, and what the state needs paid first. How to ask

Response window: File the return and pay the actual tax by the protest expiration date shown; a protest must be filed within 60 days after service of the notice

Source: myconneCT (opens in a new tab)

Assessment

A proposed or final determination of tax owed, sometimes estimated when returns were never filed.

Assessment

Notice of Assessment

The formal assessment of tax, interest, and penalty, for example after an audit is processed. It can be protested to the DRS Appellate Division.

Why you got it

  • An audit that has been processed after the Tax Determination Report
  • A DRS determination of additional tax due

What to do

  1. Check the periods and amounts against your records and any audit work papers
  2. If you disagree with the tax or a penalty, including an audit penalty, file a written protest with the Appellate Division within 60 days. Form APL-002 is optional
  3. If you agree with the tax, pay it or contact DRS about a payment plan. For penalties not imposed in an audit, you can request a waiver on Form DRS-PW once all tax and interest is paid
  4. To limit interest while protesting, consider a cash bond deposit (Form APL-004)

Before you pay penalties: check whether you can ask for them to be waived, and what the state needs paid first. How to ask

Response window: Protest received or U.S.-postmarked within 60 days after the date of the notice

Source: Penalty waiver request, offer in compromise or protest (opens in a new tab)

Assessment

Notice of Jeopardy Assessment

An assessment DRS makes and collects right away when it believes delay would put collection at risk. DRS estimates the tax for the periods involved.

Why you got it

  • DRS believes collection of the tax will be jeopardized by delay

What to do

  1. Act at once. The protest window is 10 days
  2. File a written protest with the Appellate Division
  3. To stay collection, post a bond or other acceptable security

Before you pay penalties: check whether you can ask for them to be waived, and what the state needs paid first. How to ask

Response window: Protest received or U.S.-postmarked within 10 days after the date of the notice

Source: Penalty waiver request, offer in compromise or protest (opens in a new tab)

Audit

A request for records or notice that the authority is examining your returns.

Audit

Tax Determination Report (proposed audit assessment notice)

A report given at the end of a DRS audit, along with the audit work papers. It summarizes proposed adjustments and the proposed tax, interest, and penalty. It comes before the formal notice of assessment.

Why you got it

  • A DRS office or field audit that proposes changes to your returns

What to do

  1. Review the report and the work papers against your records
  2. If you disagree with an adjustment or a penalty, ask the audit office's manager or supervisor for an informal conference by the date on the report
  3. If you agree with the tax, you can send an advance payment to limit interest before the notice of assessment is issued
  4. Audit penalties cannot be waived with Form DRS-PW. If you still dispute them, protest the notice of assessment when it arrives

Response window: Request an informal conference by the date indicated on the report

Source: PS 2008(4), Your Rights as a Connecticut Taxpayer (opens in a new tab)

Collections

Enforcement on unpaid balances, such as liens, levies, warrants, or referral to a collection agency.

Collections

Notice of intent to issue a tax warrant (bank or wage levy)

Written notice that DRS intends to issue a tax warrant against bank accounts, wages, receivables, or other intangible property to collect unpaid tax. By statute, the notice must be given at least 30 days before the warrant is issued.

Why you got it

  • Tax that remains unpaid 30 days after its due date

What to do

  1. Check the balance against your records and contact DRS right away if it looks wrong
  2. Pay the balance within the notice period to stop the warrant, or contact DRS about a payment plan before the warrant date
  3. The warrant can order a bank or employer to keep turning over funds for up to 180 days or until the tax is paid
  4. Once all tax and interest is paid, you can still ask for a waiver of penalties not imposed in an audit on Form DRS-PW

Before you pay penalties: check whether you can ask for them to be waived, and what the state needs paid first. How to ask

Response window: At least 30 days' notice before the warrant is issued

Source: Chapter 202 - Collection of State Taxes (Conn. Gen. Stat. § 12-35) (opens in a new tab)

Ask for penalty relief

Penalties on a Connecticut notice aren't always final. You can ask for them to be waived. Follow the steps below, including anything the state requires you to file or pay before it reviews the request.

Request for Waiver of Civil Penalty (penalty waiver)

Form DRS-PW, Request for Waiver of Civil Penalty
  1. File any missing returns and pay all tax and interest due first. DRS will not consider a waiver request until both are paid
  2. Read PS 2019(3), Requests for Waiver of Civil Penalties, to check that the penalty can be waived
  3. Submit Form DRS-PW through myconneCT (for available taxes), by fax to 860-297-5727, or by mail to DRS Operations Bureau/Penalty Waiver, PO Box 5089, Hartford, CT 06103
  4. File Form DRS-PW within one year of the date DRS first sent you notice of the penalty. Later requests are barred
  5. Penalties imposed in an audit cannot be waived this way. Protest them to the Appellate Division instead (Form APL-002)

What qualifies: Reasonable cause: the failure to pay on time was not intentional or due to neglect

Interest: Interest cannot be waived. All tax and interest must be paid before a penalty waiver request will be considered

Source: Penalty Waiver Request, Offer of Compromise or Protest | CT DRS (opens in a new tab)

Before you respond

  • Check the date on the notice. Response windows usually run from that date, not the day you open it.
  • Match the account number and filing period to your own records before paying or disputing.
  • If returns are missing, filing the actual returns usually replaces an estimated bill. Confirm how on the notice or with the authority.
  • Ask about penalty relief before paying penalties, and check what must be paid with the request. See how
  • Keep a copy of the notice and everything you send back.

This page is general information, not tax or legal advice. Notice names and procedures change, so always follow the instructions on your notice and the official sources linked above.

Need the rates, nexus thresholds and filing rules? Read the Connecticut sales tax guide.

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