SB 540, as introduced, Hertzberg. Franchise Tax Board: Taxpayers’ Rights Advocate.
The Katz-Harris Taxpayers’ Bill of Rights Act establishes the position of Taxpayers’ Rights Advocate and provides specified protections for taxpayers for purposes of, among other things, determining their correct tax liability. Existing law, until January 1, 2016, authorizes the Taxpayers’ Rights Advocate to abate penalties, fees, additions to tax, or interest attributable to error of the Franchise Tax Board, as specified. Existing law requires any relief granted in which the total reduction exceeds $500, as adjusted, to be submitted to the executive officer of the board for concurrence, and limits the total relief granted to $7,500, as adjusted.
This bill would, on and after January 1, 2016, instead authorize the chief counsel of the Franchise Tax Board to abate penalties, fees, additions to tax, or interest attributable to error of the Franchise Tax Board, remove the limit on the amount of relief that may be granted and the adjustment provision relating to that amount, specify the retention period for records of relief granted by the chief counsel, and remove the sunset date, thus extending these provisions indefinitely.
Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.
The people of the State of California do enact as follows:
Section 21004 of the Revenue and Taxation Code,
2as amended by Section 1 of Chapter 349 of the Statutes of 2012,
3is amended to read:
(a) The board shall establish the position of the
5Taxpayers’ Rights Advocate. The advocate or his or her designee
6shall be responsible for coordinating resolution of taxpayer
7complaints and problems, including any taxpayer complaints
8regarding unsatisfactory treatment of taxpayers by board
9employees. The advocate shall report directly to the executive
10officer of the board.
11(b) The advocate or his or her designee shall give highest priority
12to reviewing and taking prompt and appropriate action, including
13staying actions where taxpayers have suffered or will suffer
14irreparable loss as the result of board action. Applicable statutes
15of limitation shall be tolled during the pendency of a stay. Any
16penalties and interest which would otherwise accrue shall not be
17affected
by the granting of a stay.
18(c) (1) On and after January 1, 2013,begin insert and before January 1,
192016,end insert the advocate may review any application for relief pursuant
20to this subdivision and abate any penalties, fees, additions to tax,
21or interest assessed on a taxpayer, if it is determined by the
22advocate that the penalties, fees, additions to tax, or interest that
23have been assessed, or any part thereof, is attributable to any of
24the following:
25(A) Erroneous action or erroneous inaction by the board in
26processing documents filed or payments made by taxpayers.
27(B) Unreasonable delay caused by the board.
28(C) Erroneous written advice that
does not qualify for relief
29under Section 21012.
30(2) Relief may be granted pursuant to this subdivision only if
31no significant aspect of that error or delay can be attributed to the
32taxpayer involved and relief is not available under any other
33provision of this part, Part 10 (commencing with Section 17001),
34or Part 11 (commencing with Section 23001), including any relief
35granted under any regulation or other administrative
36pronouncement of the board.
37(3) (A) (i) Any relief granted pursuant to this subdivision in
38which the total reduction in penalties, fees, additions to tax, or
P3 1interest exceeds five hundred dollars ($500) shall be submitted to
2the executive officer for concurrence.
3(ii) The total relief granted pursuant to this subdivision may not
4exceed seven thousand five
hundred dollars ($7,500).
5(B) Whenever relief is granted under this subdivision, there
6shall be placed on file in the office of the executive officer of the
7board a public record with respect to that relief. The public record
8shall include the following:
9(i) The taxpayer’s name.
10(ii) The total amount involved.
11(iii) The amount payable or refundable due to the error or delay.
12(iv) A summary of why the relief is warranted.
13(4) A refund may be paid as a result of relief granted under this
14subdivision only if the applicable statute of limitations, with respect
15to filing a claim for refund, remains open as of the date that the
16
basis for providing relief, as authorized in subparagraphs (A) to
17(C), inclusive, of paragraph (1), as reflected in a written
18communication received by the advocate.
19(d) (1) On and after January 1, 2016, the chief counsel of the
20board may provide relief pursuant to this subdivision and abate
21any penalties, fees, additions to tax, or interest assessed, if it is
22determined by the chief counsel that the penalties, fees, additions
23to tax, or interest that have been assessed, or any part thereof, is
24attributable to any of the following:
25(A) Erroneous action or erroneous inaction by the board in
26processing documents filed or payments made by taxpayers.
27(B) Unreasonable delay caused by the board.
end insertbegin insert
28(C) Erroneous written advice that does not qualify for relief
29under Section 21012.
30(2) Relief may be granted pursuant to this subdivision only if
31no significant aspect of that error or delay can be attributed to
32the taxpayer involved and relief is not available under any other
33provision of this part, Part 10 (commencing with Section 17001),
34Part 10.2 (commencing with Section 18401), or Part 11
35(commencing with Section 23001), including any relief granted
36under any regulation or other administrative pronouncement of
37the board.
38(3) (A) Any relief granted pursuant to
this subdivision in which
39the total reduction in penalties, fees, additions to tax, or interest
P4 1exceeds five hundred dollars ($500) shall be submitted to the
2executive officer for concurrence.
3(B) Whenever relief is granted under this subdivision, there
4shall be placed on file for at least one year in the office of the
5executive officer of the board a public record with respect to that
6relief. The public record shall include the following:
7(i) The taxpayer’s name.
end insertbegin insert8(ii) The total amount involved.
end insertbegin insert9(iii) The amount payable or refundable due to the error or delay.
end insertbegin insert10(iv) A summary of why the relief is warranted.
end insertbegin insert
11(4) A refund may be paid as a result of relief granted under this
12subdivision only if the applicable statute of limitations, with respect
13to filing a claim for refund, remains open as of the date that the
14basis for providing relief, as authorized in subparagraphs (A) to
15(C), inclusive, of paragraph (1), as determined by the board.
16(d)
end delete
17begin insert(e)end insert No other entity may participate in the grant or denial of relief
18pursuant to
this section.
19(e)
end delete
20begin insert(f)end insert On January 1 of each calendar year beginning on or after
21January 1, 2009,begin insert and before January 1, 2016,end insert the board shall
22increase the amount specified in subparagraph (A) of paragraph
23(3) of subdivision (c) to the amount computed under this
24subdivision. That adjustment shall be made as follows:
25(1) The Department of Industrial Relations shall transmit
26annually to the board the percentage change in the California
27Consumer Price Index for All Urban Consumers, as modified for
28rental
equivalent home ownership for all items, from June of the
29prior calendar year to June of the current calendar year, no later
30than August 1 of the current calendar year.
31(2) The board shall then:
32(A) Compute the percentage change in the California Consumer
33Price Index for All Urban Consumers from the later of June 2008
34or June of the calendar year prior to the last increase in the amount
35specified in paragraph (1).
36(B) Compute the inflation adjustment factor by adding 100
37percent to the percentage change so computed, and converting the
38resulting percentage to the decimal equivalent.
39(C) Multiply the amount specified in paragraph (1) for the
40immediately preceding calendar year, as adjusted under this
P5 1subparagraph, by the inflation adjustment factor
determined in
2subparagraph (B), and round off the resulting product to the nearest
3one hundred dollars ($100).
4(f)
end delete
5begin insert(g)end insert Notwithstanding any other law or rule of law, all
6determinations made under paragraph (1) of subdivision (c)begin insert and
7paragraph (1) of subdivision (d)end insert shall not be subject to review in
8any administrative or judicial proceeding.
9(g)
10The amendments made by the act adding this subdivision shall
11become operative on January 1, 2013.
12(h) This section shall remain in effect only until January 1, 2016,
13and as of that date is
repealed.
Section 21004 of the Revenue and Taxation Code, as
15added by Section 2 of Chapter 349 of the Statutes of 2012, is
16repealed.
(a) The board shall establish the position of the
18Taxpayers’ Rights Advocate. The advocate or his or her designee
19shall be responsible for coordinating resolution of taxpayer
20complaints and problems, including any taxpayer complaints
21regarding unsatisfactory treatment of taxpayers by board
22employees. The advocate shall report directly to the executive
23officer of the board.
24(b) The advocate or his or her designee shall give highest priority
25to reviewing and taking prompt and appropriate action, including
26staying actions where taxpayers have suffered or will suffer
27irreparable loss as the result of board action. Applicable statutes
28of limitation shall be tolled during the pendency of a stay. Any
29penalties and interest which would otherwise
accrue shall not be
30affected by the granting of a stay.
31(c) This section shall become operative on January 1, 2016.
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