BILL NUMBER: SB 540 AMENDED
BILL TEXT
AMENDED IN SENATE APRIL 6, 2015
INTRODUCED BY Senator Hertzberg
FEBRUARY 26, 2015
An act to amend and repeal Section 21004 of the Revenue and
Taxation Code, relating to taxation.
LEGISLATIVE COUNSEL'S DIGEST
SB 540, as amended, 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 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, and specify the
retention period for records of relief granted by the chief
counsel, and remove the sunset date, thus extending these provisions
indefinitely. counsel.
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 21004 of the Revenue and Taxation Code, as
amended by Section 1 of Chapter 349 of the Statutes of 2012, is
amended to read:
21004. (a) The board shall establish the position of the
Taxpayers' Rights Advocate. The advocate or his or her designee shall
be responsible for coordinating resolution of taxpayer complaints
and problems, including any taxpayer complaints regarding
unsatisfactory treatment of taxpayers by board employees. The
advocate shall report directly to the executive officer of the board.
(b) The advocate or his or her designee shall give highest
priority to reviewing and taking prompt and appropriate action,
including staying actions where taxpayers have suffered or will
suffer irreparable loss as the result of board action. Applicable
statutes of limitation shall be tolled during the pendency of a stay.
Any penalties and interest which would otherwise accrue shall not be
affected by the granting of a stay.
(c) (1) On and after January 1, 2013, and before January
1, 2016, the advocate may review any application
for Chief Counsel of the Franchise Tax Board may
provide relief pursuant to this subdivision and abate any
penalties, fees, additions to tax, or interest assessed on a
taxpayer, if it is determined by the advocate
Chief Counsel of the Franchise Tax Board that
the penalties, fees, additions to tax, or interest that have been
assessed, or any part thereof, is attributable to any of the
following:
(A) Erroneous action or erroneous inaction by the board in
processing documents filed or payments made by taxpayers.
(B) Unreasonable delay caused by the board.
(C) Erroneous written advice that does not qualify for relief
under Section 21012.
(2) Relief may be granted pursuant to this subdivision only if no
significant aspect of that error or delay can be attributed to the
taxpayer involved and relief is not available under any other
provision of this part, Part 10 (commencing with Section 17001),
Part 10.2 (commencing with Section 18401), or Part 11
(commencing with Section 23001), including any relief granted under
any regulation or other administrative pronouncement of the board.
(3) (A) (i) Any relief
granted pursuant to this subdivision in which the total reduction in
penalties, fees, additions to tax, or interest exceeds five hundred
dollars ($500) shall be submitted to the executive officer for
concurrence.
(ii) The total relief granted pursuant to this subdivision may not
exceed seven thousand five hundred dollars ($7,500).
(B) Whenever relief is granted under this subdivision, there shall
be placed on file for at least one year in the office of
the executive officer of the board a public record with respect to
that relief. The public record shall include the following:
(i) The taxpayer's name.
(ii) The total amount involved.
(iii) The amount payable or refundable due to the error or delay.
(iv) A summary of why the relief is warranted.
(4) A refund may be paid as a result of relief granted under this
subdivision only if the applicable statute of limitations, with
respect to filing a claim for refund, remains open as of the date
that the basis for providing relief, as authorized in subparagraphs
(A) to (C), inclusive, of paragraph (1), as reflected in a
written communication received by the advocate.
determined by the board.
(d) (1) On and after January 1, 2016, the chief counsel of the
board may provide relief pursuant to this subdivision and abate any
penalties, fees, additions to tax, or interest assessed, if it is
determined by the chief counsel that the penalties, fees, additions
to tax, or interest that have been assessed, or any part thereof, is
attributable to any of the following:
(A) Erroneous action or erroneous inaction by the board in
processing documents filed or payments made by taxpayers.
(B) Unreasonable delay caused by the board.
(C) Erroneous written advice that does not qualify for relief
under Section 21012.
(2) Relief may be granted pursuant to this subdivision only if no
significant aspect of that error or delay can be attributed to the
taxpayer involved and relief is not available under any other
provision of this part, Part 10 (commencing with Section 17001), Part
10.2 (commencing with Section 18401), or Part 11 (commencing with
Section 23001), including any relief granted under any regulation or
other administrative pronouncement of the board.
(3) (A) Any relief granted pursuant to this subdivision in which
the total reduction in penalties, fees, additions to tax, or interest
exceeds five hundred dollars ($500) shall be submitted to the
executive officer for concurrence.
(B) Whenever relief is granted under this subdivision, there shall
be placed on file for at least one year in the office of the
executive officer of the board a public record with respect to that
relief. The public record shall include the following:
(i) The taxpayer's name.
(ii) The total amount involved.
(iii) The amount payable or refundable due to the error or delay.
(iv) A summary of why the relief is warranted.
(4) A refund may be paid as a result of relief granted under this
subdivision only if the applicable statute of limitations, with
respect to filing a claim for refund, remains open as of the date
that the basis for providing relief, as authorized in subparagraphs
(A) to (C), inclusive, of paragraph (1), as determined by the board.
(e) No other entity may participate in the grant or denial of
relief pursuant to this section.
(f) On January 1 of each calendar year beginning on or after
January 1, 2009, and before January 1, 2016, the board shall increase
the amount specified in subparagraph (A) of paragraph (3) of
subdivision (c) to the amount computed under this subdivision. That
adjustment shall be made as follows:
(1) The Department of Industrial Relations shall transmit annually
to the board the percentage change in the California Consumer Price
Index for All Urban Consumers, as modified for rental equivalent home
ownership for all items, from June of the prior calendar year to
June of the current calendar year, no later than August 1 of the
current calendar year.
(2) The board shall then:
(A) Compute the percentage change in the California Consumer Price
Index for All Urban Consumers from the later of June 2008 or June of
the calendar year prior to the last increase in the amount specified
in paragraph (1).
(B) Compute the inflation adjustment factor by adding 100 percent
to the percentage change so computed, and converting the resulting
percentage to the decimal equivalent.
(C) Multiply the amount specified in paragraph (1) for the
immediately preceding calendar year, as adjusted under this
subparagraph, by the inflation adjustment factor determined in
subparagraph (B), and round off the resulting product to the nearest
one hundred dollars ($100).
(d) No other entity may participate in the grant or denial of
relief pursuant to this section.
(g)
(e) Notwithstanding any other law or rule of law, all
determinations made under paragraph (1) of subdivision (c)
and paragraph (1) of subdivision (d) shall not be subject
to review in any administrative or judicial proceeding.
(f) (1) The amendments made by Section 1 of Chapter 349 of the
Statutes of 2012 shall become operative on January 1, 2013.
(2) The amendments made by the act adding this paragraph shall
become operative on January 1, 2016.
SEC. 2. Section 21004 of the Revenue and Taxation Code, as added
by Section 2 of Chapter 349 of the Statutes of 2012, is repealed.