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 ofbegin insert or unreasonable delay caused byend insert 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.begin insert Existing law authorizes relief to be granted only if no significant aspect of the board’s error or delay is attributed to the taxpayer, as provided.end insert
Thisbegin delete bill would,end deletebegin insert bill,end insert on and after January 1, 2016,begin delete instead authorizeend deletebegin insert would instead require the Taxpayers’ Rights Advocate, in coordination withend insert the Chief Counsel of the Franchise Taxbegin delete Boardend deletebegin insert Board,end insert to abate penalties, fees, additions to tax,
or interest attributable to error ofbegin insert or unreasonable delay caused byend insert 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.begin insert The bill would require the advocate and the board to provide relief to the taxpayer only if no significant aspect of the board’s error or delay is attributed to the taxpayer.end insert
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, 2016,begin insert the Taxpayers’ Rights
19Advocate, in coordination withend insert the Chief Counsel of the Franchise
20Taxbegin delete Board mayend deletebegin insert Board, shallend insert provide relief pursuant to this
21subdivision and abate any penalties, fees, additions to tax, or
22interest assessed if it is determinedbegin delete by the
Chief Counsel of the
23Franchise Tax Boardend delete
24interest that have been assessed, or any part thereof, is attributable
25to any of the following:
26(A) Erroneous action or erroneous inaction by the board in
27processing documents filed or payments made by taxpayers.
28(B) Unreasonable delay caused by the board.
29(C) Erroneous written advice that does not qualify for relief
30under Section 21012.
P3 1(2) Reliefbegin delete mayend deletebegin insert shallend insert be granted pursuant to this subdivision only
2if no
significant aspect of that error or delay can be attributed to
3the taxpayer involved and relief is not available under any other
4provision of this part, Part 10 (commencing with Section 17001),
5Part 10.2 (commencing with Section 18401), or Part 11
6(commencing with Section 23001), including any relief granted
7under any regulation or other administrative pronouncement of
8the board.
9(3) (A) Any relief granted pursuant to this subdivision in which
10the total reduction in penalties, fees, additions to tax, or interest
11exceeds five hundred dollars ($500) shall be submitted to the
12executive officer for concurrence.
13(B) Whenever relief is granted under this subdivision, there
14shall be placed on file for at least one year in the office of the
15executive officer of the
board a public record with respect to that
16relief. The public record shall include the following:
17(i) The taxpayer’s name.
18(ii) The total amount involved.
19(iii) The amount payable or refundable due to the error or delay.
20(iv) A summary of why the relief is warranted.
21(4) A refund may be paid as a result of relief granted under this
22subdivision only if the applicable statute of limitations, with respect
23to filing a claim for refund, remains open as of the date that the
24
basis for providing relief, as authorized in subparagraphs (A) to
25(C), inclusive, of paragraph (1), as determined by the board.
26(d) No other entity may participate in the grant or denial of relief
27pursuant to this section.
28(e) Notwithstanding any other law or rule of law, all
29determinations made under paragraph (1) of subdivision (c)
shall
30not be subject to review in any administrative or judicial
31proceeding.
32(f) (1) The amendments made by Section 1 of Chapter 349 of
33the Statutes of 2012 shall become operative on January 1, 2013.
34(2) The amendments made by the act adding this paragraph
35shall become operative on January 1, 2016.
Section 21004 of the Revenue and Taxation Code, as
37added by Section 2 of Chapter 349 of the Statutes of 2012, is
38repealed.
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