NO. 84-53 

IN THE SUPREME COURT OF THE STATE 0 F MOIilTANA 

1984 

GALE ABRAMS, et al., 

Plaintiffs and Appellants, 

ELLEN FEAVER, Director of the 

Montana Department of Revenue, 

Defendant and Respondent. 

APPEAL FROM: District Court of the First Judicial District, 

In and for the County of Lewis & Clark, 

The Honorable Gordon R. Bennett, Judge presiding. 

COUNSEL OF RECORD: 

For Appellants: 

George T. Radovich, Billings, Montana 

For Respondent: 

R. Bruce McGinnis, Dept. of Revenue, Helena, Montana 

pSubmitted on Briefs: June 28, 1984 

Decided: August 16, 1984 

Clerk 
Mr. Justice John Conway Harrison delivered the Opinion of 

the Court. 

This is an appeal froin the District Court of the First 

Judicial District, in and for the County of Lewis and Clark, 

refusing to order a refund of taxes withheld from the 

appellants1 paychecks. 

Appellants raise one issue on appeal. The issue is 

whether the Department of Revenue's actions in correcting 

tax payers withholding exemptions was a denial of due 

process of law. 

The appellants, after filing a petition for a 

declaratory judgment and a writ of prohibition, moved for a 

summary judgment. Hearing on the motion was held on June 

30, 1983, with both parties represented by counsel. 

Following the filing of briefs by both parties, the matter 

was deemed fully submitted on August 22, 1983. 

The appellants1 petition for a declaratory judgment 

and writ of prohibition is based on the undisputed fact that 

the appellants were not given notice or opportunity to be 

heard prior to the Department of Revenue's decision not to 

allow the exemptions filed by the appellants on their 

Federal W-4 forms. Appellants contend the Department of 

Revenue lacks authority to alter the Federal W-4 forms, and, 

even if it has such authority, due process required that the 

appellants be given notice and an opportunity for a hearing 

before the Department disallows the number of exemptions 

claimed on the W-4 forms. 

The appellants were employees of various employers 

in Colstrip, Rosebud County, Montana, employed for the 
purpose of building electrical plants 3 and 4. Just prior 

to Christmas in 1981, the Department of Revenue notified 

them by letter, attached to their checks, that a change had 

been made in their number of dependents. Part of that 

letter stated: "If there are any questions, the employee is 

to notify Betsy Phillips, Field Audit Bureau, Income Tax 

Division, P.O. Box 5805, Helena, Montana 59604." The 

appellants had on file with their employers Federal W-4 

forms, which they allege were the only forms available for 

the purpose of declaring the amount of withholding to be 

taken from their wages. Each of these forms claimed 

"exempt" status or excess "allowances" which are allowed 

under federal law. These forms with their alleged 

exemptions are not given to the tax department of the State 

of Montana but are on file with the employer and the audit 

system for the Department of Revenue. 

The Department of Revenue annually conducts an audit 

at the employer's office to check the withholding and tax 

forms they have on file. In the fall of 1981, during this 

type of an audit, the State determined that certain 

employees of the Bechtel Power Corporation were not entitled 

to certain exemptions that may or may not have been allowed 

by the federal government. This determination brought about 

the letter sent in December 1981, notifying the employees 

of a change of status in their exemptions. 

Appellants argue in this action that they are not 

challenging the authority of the Department of Revenue, 

under proper circumstances, to withhold from wages for the 

anticipated income tax liability of wage earners. They 

acknowledge that both the State and the Federal Government 
have followed this procedure for years, and it has been 

upheld many times. Appellants are challenging the procedure 

followed by the Department of Revenue; altereing the W-4 

forms. Appellants allege that in so altering these forms 

without proper notice, their rights under the Fifth 

Amendment were violated. 

Appellants cite Akhtar v. Van De Wetering (Mont. 

1982), 642 P.2d 149, 39 St.Rep. 470, and Schend v. Thorson 

(1976), 170 Mont. 5, 549 P.2d 809. Neither case is on point 

with the problem presented here and will not be further 

discussed. 

Section 15-30-202, MCA, provides that every employer 

making a payment of wages, shall withhold f rom the wages "a 

tax determined in accordance with the withholding tax tables 

which shall be prepared and issued by the department." The 

statute clearly gives the Department of Revenue the 

authority to determine the amount of withholding tax through 

certain tax tables. 

Answering the problem of due process in this tax 

collection field, due process is not offended if the party 

contesting the taxes is afforded an opportunity to challenge 

the collection of a tax at any time before a conclusive 

judgment. See, Gallup v. Schmidt (1902), 183 U.S. 300, 22 

S.Ct. 162, 46 L.Ed 207. State courts have construed this 

rule to mean that a taxpayer is not deprived of his property 

without due process of law if he has an opportunity to 

question the validity of the tax at some stage in the 

proceedings. See, State ex re1 Douglas v. State Board of 

Equalization and Assessment (1979), 205 Neb. 130, 286 N.W.2d 

729; Chicago Sheraton Corp. v. Zaban (1978), 71 I11.2d 85, 
373 N.E.2d 1318. Even if the State has seized the property 

for payment of taxes, it has been held constitutionally 

sound to postpone the opportunity for a hearing until after 

payment of delinquent taxes. Peters v. Sjoholm (1981), 95 

'vJash.2d 871, 631 P.2d 937, cert denied, 455 U.S. 914, 102 

S.Ct. 1267, 71 L.Ed.2d 455; Fuentes v. Shevin (1972), 407 

U.S. 67, 92 S.Ct. 1983, 32 L.Ed.2d 556. 

Here, appellants had the opportunity to challenge the 

number of exemptions allowed and their payment of state 

income tax through the tax refund procedure set forth in 

section 15-30-149, MCA. Such a procedure satisfies due 

process requirements since the appellants were given the 

opportunity through a hearing, if necessary, to contest this 

amount of taxes due. 

As noted above, in tax cases due process does not 

require that appellants receive notice and hearing prior to 

the withholding. Appellants have the opportunity to contest 

the validity of the Department's administrative actions and 

the amount of the withholding through exhaustion of the 

administrative remedies in the refund procedures. As long 

as they are afforded this opportunity, due process has been 

fulfilled. 

Following the hearing, the trial court held that there 

were no genuine issues of fact before it. Since appellants 

had notice and opportunity to address the issue of due 

process, summary judgment was proper and was granted under 

the authority of Hereford v. Hereford (1979), 183 Mont. 104, 

598 P.2d 600, and Rule 56(c), M.R.Civ.R. 

The judgment of the District Court is affirmed. 
We concur : 

24 4. "&&A 

Chief Justice