BILL NUMBER: AB 2195 INTRODUCED
BILL TEXT
INTRODUCED BY Assembly Member Silva
FEBRUARY 18, 2010
An act to add Section 524 to the Evidence Code, and to add Part
10.1 (commencing with Section 15706) to Division 3 of Title 2 of the
Government Code, relating to taxation.
LEGISLATIVE COUNSEL'S DIGEST
AB 2195, as introduced, Silva. Taxation: State Board of
Equalization: Franchise Tax Board: burden of proof.
Existing law imposes various taxes and fees that are administered
and collected by the State Board of Equalization and the Franchise
Tax Board. Existing law provides that the taxpayer has the burden of
proof in court proceedings for a refund of tax, while the state
agency has the burden of proof with respect to its assertion of fraud
or intent to evade penalties.
This bill would provide, for purposes of the taxes and fees
administered by the State Board of Equalization, that the board shall
have the burden of proof, by clear and convincing evidence, in
sustaining its assertion of penalties for intent to evade or fraud in
a civil proceeding.
This bill would also provide, with specified exceptions, that the
State Board of Equalization and the Franchise Tax Board shall have
the burden of proof in a court or administrative tax proceeding with
respect to any factual issue relevant to ascertaining the tax
liability of a taxpayer who has established that it is a cooperating
taxpayer, as provided.
This bill would also provide that its provisions shall not subject
a taxpayer to unreasonable search or access to records in violation
of the law, as provided.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 524 is added to the Evidence Code, to read:
524. (a) Notwithstanding any other provision of law, in a civil
proceeding to which the State Board of Equalization is a party, that
board shall have the burden of proof by clear and convincing evidence
in sustaining its assertion of a penalty for intent to evade or
fraud against a taxpayer, with respect to any factual issue relevant
to ascertaining the liability of a taxpayer.
(b) Nothing in this section shall be construed to override any
requirement for a taxpayer to substantiate any item on a return or
claim filed with the State Board of Equalization.
(c) Nothing in this section shall subject a taxpayer to
unreasonable search or access to records in violation of the United
States Constitution, the California Constitution, or any other law.
(d) For purposes of this section, "taxpayer" includes a person on
whom fees administered by the State Board of Equalization are
imposed.
SEC. 2. Part 10.1 (commencing with Section 15706) is added to
Division 3 of Title 2 of the Government Code, to read:
PART 10.1. BURDEN OF PROOF
15706. (a) The State Board of Equalization and Franchise Tax
Board shall have the burden of proof in any court or administrative
tax proceeding, with respect to a factual issue related to
ascertaining the tax liability of a taxpayer that has established
that it is a cooperating taxpayer.
(b) For purposes of this section:
(1) "Administrative tax proceeding" means either of the following:
(A) For disputes concerning taxes or fees collected by the State
Board of Equalization, the oral hearing before the members of the
State Board of Equalization.
(B) For disputes concerning taxes collected by the Franchise Tax
Board, the oral hearing before the members of the State Board of
Equalization.
(2) "Cooperating taxpayer" means a taxpayer that satisfies all of
the following requirements:
(A) Has complied with all relevant statutory, regulatory, or case
law substantiation requirements to substantiate any item on a return
or claim filed with the State Board of Equalization or the Franchise
Tax Board.
(B) Has maintained all records as required by the Revenue and
Taxation Code, or any regulations issued by the State Board of
Equalization or the Franchise Tax Board, and, upon a reasonable
request by the state agency, has provided those records to the state
agency.
(C) Has provided credible evidence to the State Board of
Equalization or the Franchise Tax Board with respect to any factual
issue relevant to ascertaining the tax liability of the taxpayer.
(3) "Tax liability" means any tax or fee assessed or determined by
the State Board of Equalization or the Franchise Tax Board,
including any interest accrued or penalties levied with respect to
the tax or fee.
(4) "Taxpayer" includes a person on whom fees administered by the
State Board of Equalization are imposed.
(c) Unless provided otherwise, the burden of proof for purposes of
this part shall be a preponderance of the evidence.
(d) This section does not apply to either of the following:
(1) An adjustment proposed and made to a taxpayer's federal income
tax return by the federal government.
(2) An appeal filed under Section 19045 or 19324 of the Revenue
and Taxation Code that is subject to the provisions of Section 21024
of the Revenue and Taxation Code.
(e) Nothing in this section shall subject a taxpayer to
unreasonable search or access to records in violation of the United
States Constitution, the California Constitution, or any other law.
(f) This section shall apply only to court and administrative tax
proceedings involving assessments or notices of determination issued
on or after the date on which this act becomes effective.