                                               NO.    84-53

                    I N THE SUPREME COURT OF THE STATE 0 F MOIilTANA

                                                      1984




GALE ABRAMS,        et al.,

                     P l a i n t i f f s and A p p e l l a n t s ,



ELLEN FEAVER, D i r e c t o r of t h e
Montana D e p a r t m e n t of R e v e n u e ,

                     D e f e n d a n t and R e s p o n d e n t .




APPEAL FROM:         D i s t r i c t C o u r t of t h e F i r s t J u d i c i a l D i s t r i c t ,
                     I n and f o r t h e C o u n t y of L e w i s & C l a r k ,
                     T h e H o n o r a b l e G o r d o n R. B e n n e t t , Judge p r e s i d i n g .


COUNSEL O F RECORD:


         For Appellants:

                     G e o r g e T.   Radovich,         Billings,         Montana


         For Respondent:

                     R.   Bruce McGinnis,             Dept.        of R e v e n u e , H e l e n a , Montana



                                                                                    p-




                                               S u b m i t t e d on B r i e f s :   June 28, 1 9 8 4

                                                                     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
p u r p o s e o f b u i l d i n g e l e c t r i c a l p l a n t s 3 and 4.           Just prior
t o Christmas            in    1981,       t h e Department          of    Revenue       notified
them by l e t t e r , a t t a c h e d t o t h e i r c h e c k s , t h a t a c h a n g e had
been     made      in      their      number      of     dependents.              Part   of    that
l e t t e r s t a t e d : " I f t h e r e a r e any q u e s t i o n s ,      t h e employee is
to    n o t i f y Betsy P h i l l i p s ,        Field     Audit Bureau,            Income Tax

Division,         P.O.        Box     5805,      Helena,           Montana    59604."           The
appellants          had       on    file       with    their       employers Federal            W-4

f o r m s , which t h e y a l l e g e w e r e t h e o n l y f o r m s a v a i l a b l e f o r
the purpose           of      declaring         t h e amount o f          withholding         t o 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 a r e n o t g i v e n t o t h e t a x department of t h e S t a t e
of Montana b u t a r e on f i l e w i t h t h e e m p l o y e r and t h e a u d i t

s y s t e m f o r t h e D e p a r t m e n t of Revenue.
          The D e p a r t m e n t o f Revenue a n n u a l l y c o n d u c t s a n a u d i t

a t the employer's                 o f f i c e t o c h e c k t h e w i t h h o l d i n g and t a x
f o r m s t h e y h a v e on f i l e .          I n t h e f a l l of 1981, d u r i n g t h i s

type      of     an      audit,        the      State     determined           that      certain
e m p l o y e e s o f t h e B e c h t e l Power C o r p o r a t i o n were n o t e n t i t l e d
t o c e r t a i n e x e m p t i o n s t h a t may o r may n o t h a v e b e e n a l l o w e d
by t h e f e d e r a l g o v e r n m e n t .     This determination brought about

t h e l e t t e r s e n t i n December                1981, n o t i f y i n g t h e employees

of a c h a n g e o f s t a t u s i n t h e i r e x e m p t i o n s .

          Appellants           argue       in    this     action       that       they   are    not
challenging           the      authority         of     the    Department          of    Revenue,
under proper c i r c u m s t a n c e s ,          t o w i t h h o l d f r o m wages f o r t h e
anticipated           income         tax    liability         of    wage     earners.          They
a c k n o w l e d g e t h a t b o t h t h e S t a t e and t h e F e d e r a l Government
have     followed        this         procedure              for        years,       and     it       has    been

u p h e l d many times.            Appellants a r e challenging the procedure

followed        by    the        Department             of        Revenue; a l t e r e i n g           the    W-4

forms.         Appellants          allege that                in so altering                    t h e s e forms

without        proper            notice,           their           rights          under         the        Fifth

Amendment w e r e v i o l a t e d .

          Appellants             cite        Akhtar          v.      Van      De      Wetering              (Mont.

1 9 8 2 ) , 642 P.2d         1 4 9 , 39 S t . R e p .             470,      and Schend v.              Thorson

( 1 9 7 6 ) , 1 7 0 Mont.        5 , 549 P.2d 809.                      N e i t h e r c a s e i s on p o i n t

with     the     problem          presented             here        and       will     not       be    further

discussed.

          S e c t i o n 15-30-202,             MCA,          provides           t h a t e v e r y employer

making a payment o f w a g e s ,                    s h a l l w i t h h o l d f rom t h e wages " a

t a x determined i n accordance with t h e withholding t a x t a b l e s

which s h a l l be p r e p a r e d and i s s u e d by t h e d e p a r t m e n t . "                            The

statute        clearly            gives           the        Department              of     Revenue            the

a u t h o r i t y t o d e t e r m i n e t h e amount o f w i t h h o l d i n g t a x t h r o u g h

certain tax tables.

          Answering          the       problem           of        due      process         in        this     tax

collection field,                due process is n o t offended i f                                the party

c o n t e s t i n g t h e t a x e s is a f f o r d e d a n o p p o r t u n i t y t o c h a l l e n g e

the     collection          of    a     tax       at     any        time      before        a     conclusive

judgment.          See, G a l l u p v.             S c h m i d t ( 1 9 0 2 ) , 1 8 3 U.S.              300,     22

S.Ct.     162,       46 L.Ed          207.         S t a t e c o u r t s have construed                       this

r u l e t o mean t h a t a t a x p a y e r is n o t d e p r i v e d o f h i s p r o p e r t y

without        due    process           of     law       if        he     has    an       opportunity           to

question        the     validity             of     the       tax        at     some       stage        in     the

proceedings.            See,       S t a t e e x r e 1 D o u g l a s v.                   S t a t e Board of

E q u a l i z a t i o n and A s s e s s m e n t ( 1 9 7 9 ) , 205 Neb.                 1 3 0 , 286 N.W.2d

729;    Chicago S h e r a t o n Corp.                   v.    Zaban         ( 1 9 7 8 ) , 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 :



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          4.
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