Opinion ID: 1253218
Heading Depth: 1
Heading Rank: 4

Heading: part iv. taxpayers had available adequate avenues to protect their ability to obtain a refund, but failed to avail themselves of same.

Text: ¶ 28 We must also note that taxpayers were not without available adequate avenues to protect their ability to obtain a refund, but they failed to avail themselves of such avenues. Once it became apparent by the New York audit submitted to taxpayers in June 1994 that New York was attempting to tax the same income upon which they had already paid tax to Oklahoma, taxpayers could have sought from OTC, but did not, an extension of the three year period, as would have been allowed by the second to the last paragraph of § 2373. In June 1994 there was in excess of nine months left in the three year period specified in § 2373. No satisfactory explanation has been put forward by taxpayers for their failure to avail themselves of this extension of time provision. ¶ 29 Further, at any time between the June 1994 New York audit and April 15, 1995 taxpayers could have filed a protective claim for refund. This would have put OTC on notice of their dispute with New York concerning the taxability of the retirement income in that state and the potentiality that an Oklahoma income tax refund would be due if they ultimately lost their dispute with New York and ended up having to pay tax to that state, as eventually turned out to be the case. Plainly, during such period of time taxpayers must be deemed to have had knowledge that they would potentially have a refund claim in Oklahoma. Protective refund claims have been recognized by OTC and by federal jurisprudence in analogous circumstances, where the final outcome or exact amount of a refund claim is unascertainable until after the legislatively-prescribed time limit on refund claims has expired, but within such time period the taxpayer has knowledge or should know that the possibility of a refund claim exists. See Matter of Tax Protest of Arkla, Inc., 1996 OK CIV APP 5, 919 P.2d 1151, 1159 fn. 7; Noram Energy Corporation, v. Oklahoma Tax Com'n, 1995 OK CIV APP 149, 935 P.2d 389, 394; Oklahoma Tax Commission Precedential Order No. 92-11-24-008 (dated November 24, 1992, released November 1993), [1966-1997 Transfer Binder] Oklahoma Tax Reporter, New Matters (CCH) ¶ 200-655 [16] ; See also Amoco Production Co. v. Newton Sheep Co., supra, 85 F.3d at 1471-1472 and Kellogg-Citizens National Bank of Green Bay, Wisconsin v. United States, 165 Ct.Cl. 452, 330 F.2d 635, 638-640 (U.S.Ct.Cl.1964). Where a substantial part of the statutorily-prescribed time period on refund claims remains when a taxpayer learns of events causing, or likely to cause, a decrease in his/her tax liability, a protective refund claim should be filed during the prescribed period in order to preserve the viability of a refund claim. Id. If a protective claim is not filed within the specified period in such a situation, a refund claim will be barred, notwithstanding the fact that the exact amount of a refund cannot be determined until after the time period has expired. Id.