Oklahoma Bar Journal

Government & Administrative Law Practice

Due Process and Requests for Affirmative Relief Within the Oklahoma Tax Commission

By Marina Wise

Author’s Note: This article serves as the author’s explanation of concepts, guidelines, laws, and regulations based upon her professional experience and her preferred informational materials on the topic. This is not an official publication of the Oklahoma Tax Commission.

From tax assessments to claims for exemption, many Oklahoma Tax Commission (OTC) decisions will have a direct financial impact on taxpayers. Occasionally, taxpayers may disagree with the OTC’s conclusion. Accordingly, the OTC is permitted to hold hearings on tax issues and otherwise review its previous decisions. For purposes of this article, these methods can be collectively referred to as the OTC’s administrative procedures for disputes and claims for relief (agency review system).

BACKGROUND AND GENERAL AUTHORITY

While it may seem counterintuitive, the agency review system is incredibly valuable to the OTC. Not because the OTC believes its previous determinations are erroneous, but because this due process ensures all OTC decisions are made with great diligence and reviewed with the utmost scrutiny. The OTC and Oklahoma taxpayers do, in fact, share the same common goal: that state tax law be administered and enforced in a fair manner. As stated more eloquently by Aubrey Graham, mononymously known as Drake, “[w]e walk the same path, but got on different shoes.”[i]  The OTC and taxpayers alike want to get things right. Therefore, all Oklahoma taxpayers – attorneys or not – should be familiar with the administrative processes available to them.

The OTC’s agency review system is governed first and foremost by Title 68 of the Oklahoma Statutes.[ii] Within Title 68 lies the Uniform Tax Procedure as adopted by the Oklahoma Statutes. There, you will find the bulk of guidelines pertaining to the OTC agency review system. The OTC also turns to Title 710 of the Oklahoma Administrative Code for direction.[iii] While it does not trump the Oklahoma Statutes, the Administrative Code proves to be a source of great guidance and clarification. 

WHAT QUALIFIES AS A DECISION OF THE OTC?

Almost all OTC decisions relate to compliance or liability. Here are some examples[iv] of OTC decisions:

Assessments

These refer to the OTC’s determination of tax liability for taxpayers who either 1) did not file the required tax return(s) for a liability period; and/or 2) did file the required tax return(s), but the OTC adjusts or modifies the amount of liability after finding the return to be inaccurate or incorrect. [v]

Denials

OTC decisions include rejection or approval of the following requests for relief:

  • Claims for Refund and/or Credit[vi]

Taxpayers may request a refund of taxes erroneously remitted or overpaid. This is often seen when taxpayers remit too large of a check to pay their yearly income tax. Requests must be submitted within 2-3 years of the date of payment. This may be different than the due date of the return. Taxpayers may request a refund either by filing an amended return or submitting a refund request form. If not appealed, the denial of a claim for refund shall become final within 31 days. Instead of a cash refund, the OTC may decide to issue a credit to the taxpayer’s account.

  • Claim Requesting Deduction[vii]

When other entities, usually associated with the government, ask the OTC to deduct the cost of the entity’s claim from the debtor taxpayer’s refund, that is called a “Claim Requesting Deduction.” For example, if another state agency holds a judgment against a taxpayer, that agency may request the OTC withhold funds from the taxpayer’s refund to satisfy the agency’s judgment.

  • Innocent Spouse Relief[viii]

Under Oklahoma law, many people may be held liable for the debt of their spouse. In some instances, a taxpayer may be relieved of their spouse’s liability if the taxpayer can show certain elements by a preponderance of the evidence.

  • Parental Choice Tax Credit[ix]

The Parental Choice Tax Credit program provides a refundable income tax credit of $5,000-$7,500 for eligible Oklahoma taxpayers who pay, or expect to pay, qualified expenses such as tuition and fees to an eligible private school on behalf of an eligible student that attends or plans to attend an eligible private school during that tax year. Applications last from May through June of each year, but spots typically fill up much faster than that. For FY 2026, there is a $250,000,000 cap of funds that may be disbursed to taxpayers as a collective whole.

  • Tribal Income Exemption

Certain tribal members may apply to the OTC for an exemption if they are 1) enrolled in a tribe, and 2) work within the jurisdiction of the tribe of which they are enrolled.

Many businesses have some sort of licensing requirements, such as sales permits and liquor licenses. When businesses fail to comply with their licensing requirements, they will often be instructed to appear at a Notice to Show Cause (NTSC) hearing. This hearing is held by an administrative law judge (ALJ) and requires the taxpayer to provide reason that their permit or license should not be canceled.

  • Partial Release of Tax Warrant[xi]

A key function of the OTC is to issue tax warrants, which are essentially property liens for delinquent tax. Due to the nature of tax warrants, they will essentially function as property liens, tax warrants will typically need to be resolved before any of the taxpayer’s property can sell with free and clear title. A partial lien release, in simple terms, carves out an exception to the standard restrictions for certain property or sales in specific scenarios. To qualify, taxpayers typically must pay 10% of their current balance and have a brief hearing in front of the tax commissioners.

  • Open Records Request[xii]

The Open Records Act was created to ensure that citizens of Oklahoma have the ability to remain fully informed about their government.[xiii] Through this process, taxpayers may request various types of documents from the OTC, such as budgets, statements, meeting minutes, and more. Exceptions do apply, such as privacy privileges. In some cases where an exception applies, or where an application is improperly submitted, the OTC may deny an open records request.

DECISION DISPUTES AND REQUESTS FOR RELIEF

Each of the decisions listed above has their own unique appeal processes, if any. Some of the most common requests for administrative relief are described as follows:

Waiver of Penalty and Interest[xiv]

After a taxpayer has paid all base tax on an account and has filed all required tax returns, the taxpayer may apply for a waiver of penalty and interest. Waiver applications can be submitted via OkTAP. If you do not already have a OkTAP, you can create one by navigating to the OTC website. [xv] Once logged into the OkTAP portal, you will automatically see the homepage. From there, you will be provided with multiple action options, one of which is “Request a Waiver of Penalty and Interest.” The webpage prompts should guide you from that point forward. The application will ask you for information relating to topics such as power of attorney, identification, tax account information, and reasons for the application. Before you submit, you will have the chance to review your answers to all the questions. After submitting, you will be given a confirmation number for your waiver application.

It is important to remember that for waivers, unlike many other processes discussed herein, applications are submitted via OkTAP. There is no separate form. For waivers of particularly large amounts ($25,000 or more), an Oklahoma County district judge must hold a hearing and approve the amount.

Protest

After an audit, a proposed assessment is issued. If the taxpayer disagrees with the terms of the assessment, they typically have 60 days to file a protest with the OTC.[xvi] To submit an application for protest, taxpayers must include the following:

  • A statement of the amount of deficiency as determined by the Tax Commission, the nature of the tax, and the amount thereof in controversy;
  • A clear and concise assignment of each error alleged to have been committed by the Tax Commission;
  • The argument and legal authority upon which each assignment of error is made; provided, that the applicant shall not be bound or restricted in such herein, or on appeal, to the arguments and legal authorities contained and cited in the application;
  • A statement of relief sought by the taxpayer; and
  • A verification by the taxpayer or the taxpayer’s duly authorized agent that the statements and facts contained therein are true.[xvii]

After the application is submitted, the division which issued the assessment reviews the account and determines whether adjustments are necessary. If disputes remain, the following process commences:

  • The protest application is forwarded to the offices of the administrative law judge (ALJ).
  • OTC’s Office of General Counsel assigns the protest to one of its attorneys.
  • If the taxpayer requests an oral hearing, the OTC shall provide the taxpayer with written notice of a hearing date.
  • If the taxpayer does not request an oral hearing, the OTC may proceed without further notice and enter an order in accordance with the OTC’s findings.

If the taxpayer fails to file a written protest within the 60 days period described above, or fails to file notice required by 68 O.S. §226, the proposed assessment shall become final and absolute.[xviii] Protests bear many procedural similarities to claims for refund, however the latter progresses on a far swifter timeline.

Abatement[xix]

Taxpayers may submit a petition or request for abatement of a tax assessment, which is a procedure by which a taxpayer may request relief from an erroneous assessment. A taxpayer must request the OTC adjust or abate their assessment within one year of the assessment becoming final. Abatement can also be granted for other good cause as provided by statute. Specifically, the OTC is authorized to abate all or any portion of tax liability, as well as corresponding penalties and interest, so long as the OTC finds by clear and convincing evidence that:

  • Collection of the tax liability and interest and penalties accruing thereto would reasonably result in the taxpayer declaring bankruptcy;
  • The tax is uncollectible due to insolvency of the taxpayer resulting from facts beyond the control of the taxpayer or for other similar cause beyond the control of the taxpayer;
  • The tax liability is attributable to actions of a person other than the taxpayer and it would be inequitable to hold the taxpayer liable for the tax liability; or
  • In cases of nonpayment of trust fund taxes, the taxes were not collected by the taxpayer from its customer and the taxpayer had a good faith belief that collection of the taxes was not required.

The OTC has discretion to consider the following circumstances when making findings on an abatement application:

  • Whether the taxpayer has made efforts in good faith to comply with the tax laws of this state;
  • Whether the taxpayer has benefited from the nonpayment of the tax; and
  • Involvement of the taxpayer in economic activity from which the tax liability originated.

Following the ALJ’s decision on the abatement, there is no option for appeal.

Settlement[xx]

Occasionally, taxpayers dispute a tax claim or assessment after the protest deadline has expired. In these cases, the taxpayer may submit a request for settlement, sometimes also called an offer of settlement proposal, to the taxing division which initiated the disputed action or decision. For example, if the root of the disagreement pertains to an assessment, the settlement request should be submitted to the Audit Division. The OTC may enter into settlement agreements to compound, settle, or compromise taxpayer liability in both cases where the parties disagree over the amount owed and in cases where the taxpayer is unable to pay. Similar to waivers, in cases where the liability exceeds $25,000, an Oklahoma County District Court judge must finalize the settlement agreement.

Application for Commission Hearing[xxi]

For a denial of the Parental Choice Tax Credit[xxii] or any other action, a taxpayer may submit an application for commission hearing. This form can be found on the OTC website as Form L-26. To submit an application for commission hearing, taxpayers must provide certain identification information, specific account history, and an explanation/argument for the taxpayer’s dispute.

OTHER METHODS OF OBTAINING AGENCY GUIDANCE

You don’t have to wait until a decision has already been made to seek agency guidance. The OTC does its best to proactively provide information in a couple ways.

Letter Rulings

Declaratory rulings, also called letter rulings, are written decisions by the Oklahoma Tax Commission sent in response to a taxpayer’s request for guidance on an unusual or complex personal tax situation. Letter rulings are intended to advise the taxpayer as it relates to their specific circumstance. Many tax types can be addressed via letter rulings, but it is important to note that not all inquiries result in a letter ruling.[xxiii] To submit a request for a letter ruling, you should follow the guidelines set forth in Okla. Admin. Code Tit. 710 §1-5-17 (Petitions for declaratory rulings).

Taxpayer Resource Center

Located adjacent to the OTC’s central office, the Taxpayer Resource Center (TRC) can be found at 300 N. Broadway Avenue, Oklahoma City, Oklahoma, 73102. The TRC is open from 7:30 a.m. to 4:30 p.m. and exists to assist taxpayers with any questions they may have. Although TRC agents may not provide legal advice, they are equipped to answer various questions regarding procedure, account information, compliance, OkTAP, documents, and more. Taxpayers may call the TRC at (405) 521-3160 or schedule an appointment online.[xxiv]

CONCLUSION

Different procedures exist within many federal and state agencies to assist patrons aggrieved by agency decisions. While the processes discussed herein may be similar to those of other agencies, you should always check with the specific agency before seeking administrative relief of any kind. OTC processes and rules are not necessarily applicable to other agencies, and not even things as simple as definitions are promised to be identical. For instance, the OTC and IRS sometimes use different terminology when referring to tax disputes. The OTC does not use the term “appeals” or “mediation” and does not acknowledge “offers in compromise.”  Therefore, it is crucial that before a taxpayer seeks administrative relief through the OTC or another agency, the taxpayer should reference the relevant rules and procedures. Oftentimes, the OTC will immediately deny applications for relief that are not submitted in accordance with state law.[xxv]  

Another reason to be familiar with OTC administrative relief is that taxpayers must typically exhaust all administrative remedies before appealing to a different court.[xxvi] This means that if the OTC brings a civil lawsuit in district court against a taxpayer, the taxpayer cannot argue the validity of the liability in district court.

While nobody wants to seek out conflict, issues do arise. Everyone is better off – the state, the aggrieved taxpayer, and the general Oklahoma population  – when all parties are well advised of the pertinent rules and laws. Accordingly, make sure you, your friends and family, and your clients have access to this information for when they may need it.

ABOUT THE AUTHOR

Marina Wise is an assistant general counsel at the Oklahoma Tax Commission’s Tulsa office. Ms. Wise was born in Brownsville, Texas, and earned her bachelor’s degree from Austin College before graduating from the TU College of Law in 2021. Her practice is centered on business tax compliance and collection, as well as bankruptcy. She covers cases in all Oklahoma district courts as well as the bankruptcy courts for Oklahoma’s Northern and Eastern districts.

 

ENDNOTES

[i] Lil Wayne, “Right Above It,” (Young Money Entertainment; Cash Money Records; Universal Motown, 2010).

[ii] See generally 68 O.S. §§101 et seq.

[iii] See generally Okla Admin Code §§1-1-2 et seq.

[iv] This article may be used as an informational reference but is not an exhaustive list of administrative processes and remedies.

[v] See 68 O.S. §221.

[vi] See generally 68 O.S. §228; see generally 710:1-5-10, 13, 24, 25(7).

[vii] See 68 O.S. §205.2.

[viii] “Form L-21 Request for Innocent Spouse Relief Information”, Oklahoma Tax Commission, https://bit.ly/4iDizJp

[ix] “Oklahoma Parental Choice Tax Credit Program,” Oklahoma Tax Commission, bit.ly/4y8RmmR.

[x] See 710:1-5-100.

[xi] See 710:1-3-80.

[xii] See generally 710:1-3-70.

[xiii] See 51 O.S. §24a.2.

[xiv] See 68 O.S. §220; 710:1-5-12.

[xv] Oklahoma Tax Commission OkTAP, https://bit.ly/4AoeS0F .

[xvi] See 68 O.S. §221(C).

[xvii] See id.

[xviii] See 68 O.S. §221, 226.

[xix] See 68 O.S. §219.1; 710:1-5-70 et seq.

[xx] See 68 O.S. §219; 710:1-5-13.

[xxi] “Oklahoma Parental Choice Tax Credit Program,” Oklahoma Tax Commission, https://bit.ly/4yJ1oee.

23 “Application for Commission Hearing”, Oklahoma Tax Commission, https://bit.ly/46HTK7V.

[xxiii] “Letter Rulings,” State of Oklahoma Tax Commission, https://bit.ly/47acZqP.

[xxiv] “General Contact,” Oklahoma Tax Commission, https://bit.ly/4y4h8Zb.

[xxv] See 710:1-5-46.

[xxvi] See 710: 1-5-40(9).

Originally published in the Oklahoma Bar Journal – OBJ 97 No. 8 (October 2026)

Statements or opinions expressed in the Oklahoma Bar Journal are those of the authors and do not necessarily reflect those of the Oklahoma Bar Association, its officers, Board of Governors, Board of Editors or staff.

Tagged ,