Montana Taxation Monitored by the Montana Taxpayers Assoication. Information on Montana Taxation.

Confidentiality of Corporate Tax Records

The Montana Supreme Court has set oral arguments in Jim Elliott vs. The Montana Department of Revenue, Respondents and the Montana Taxpayers Association, Intervenor, Case No. 05-336, for May 3 at 9:30am. Senator Jim Elliott appealed the decision of the First Judicial District Court. The lawsuit seeks a ruling that the tax returns and tax return related information filed by certain corporations doing business in Montana are public documents.

The Montana Taxpayers Association intervened in the lawsuit since they firmly believe that tax returns and tax return information are confidential under both federal and state law, regardless of the identity or organization of the taxpayer. Montana administers its state income taxes under cooperative agreements with the Internal Revenue Service which provides the Department of Revenue access to the vast amount of information gathered by that agency. Those cooperative agreements also require Montana to maintain the confidentiality of tax return and tax return related information provided to it.

Senator Elliott’s lawsuit, if successful, would destroy the required confidentiality of income tax returns and tax return related information for any taxpayer or reporting entity that is not a human entity. That would mean that any farm, ranch, or other small business organized as a pass through entity, such as a Subchapter S corporation, a limited liability company, or a partnership, would have to refuse to file a Montana income tax return, or similar income reporting information, if it wanted to maintain the confidentiality of its financial affairs.

The Montana Taxpayers Association is an organization of individuals and businesses formed, among other things, to promote a healthy tax climate for individuals and businesses in Montana. Mary Whittinghill stated: “Senator Elliott’s lawsuit is a hostile act against a broad cross section of companies and people doing business in Montana. He believes, in effect, that a condition of doing business in Montana should be foregoing one’s right to maintain the confidentiality of one’s financial affairs. That is not acceptable in any other state, and should not be acceptable in Montana.”

Listed below are documents relating to the petition beginning with the Montana Taxpayer Association's letter to the Department of Revenue regarding our position on the release of certain tax information.