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 or unreasonable delay caused by 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. 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.
This bill, on and
after January 1, 2016, would instead require the Taxpayers’ Rights Advocate, in coordination with the Chief Counsel of the Franchise Tax Board, to abate penalties, fees, additions to tax, or interest attributable to error of or unreasonable delay caused by the Franchise Tax Board,begin delete removeend deletebegin insert increaseend insert the limit on the amount of relief that may be grantedbegin delete andend deletebegin insert from $7,500 to $10,000, reviseend insert the adjustment provision relating to that amount, and specify the retention period for records of relief granted by the chief counsel. 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.
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, the Taxpayers’ Rights
19Advocate, in coordination with the Chief Counsel of the Franchise
20Tax Board, shall provide relief pursuant to this subdivision and
21abate any penalties, fees, additions to tax, or interest assessed if it
22is determined that the penalties, fees, additions to tax, or interest
23that have been assessed, or any part thereof, is attributable to any
24of 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.
P3 1(C) Erroneous written advice that does not qualify for relief
2under Section 21012.
3(2) Relief shall be granted pursuant to this subdivision only if
4no significant aspect of that error or delay can be attributed to the
5taxpayer involved and relief is not available under any other
6provision of this part, Part 10 (commencing with Section 17001),
7Part 10.2 (commencing with Section 18401), or Part 11
8(commencing with Section 23001), including any relief granted
9under any regulation or other administrative pronouncement of
10the board.
11(3) (A) begin insert(i)end insertbegin insert end insert Any relief granted pursuant to this subdivision in
12which the total reduction in penalties, fees, additions to tax, or
13interest exceeds five hundred dollars ($500) shall be submitted to
14the executive officer for concurrence.
15(ii) The total relief granted pursuant to this subdivision to a
16taxpayer with respect to penalties, fees, additions to tax, or interest
17for a taxable year may not exceed ten thousand dollars ($10,000).
18(iii) Beginning on January 1, 2017, and annually thereafter,
19the amount specified in clause (ii) shall be recomputed in
20accordance with subparagraph (B) of paragraph (3) of subdivision
21(b) of Section 19442,
modified by substituting “January 1, 2017”
22for “January 1, 2004.”
23(B) Whenever relief is granted under this subdivision, there
24shall be placed on file for at least one year in the office of the
25executive officer of the board a public record with respect to that
26relief. The public record shall include the following:
27(i) The taxpayer’s name.
28(ii) The total amount involved.
29(iii) The amount payable or refundable due to the error or delay.
30(iv) A summary of why the relief is warranted.
31(4) A refund may be paid as a result of relief
granted under this
32subdivision only if the applicable statute of limitations, with respect
33to filing a claim for refund, remains open as of the date that the
34
basis for providing relief, as authorized in subparagraphs (A) to
35(C), inclusive, of paragraph (1), as determined by the board.
36(d) No other entity may participate in the grant or denial of relief
37pursuant to this section.
38(e) Notwithstanding any other law or rule of law, all
39determinations made under paragraph (1) of subdivision (c) shall
P4 1not be subject to review in any administrative or judicial
2proceeding.
3(f) (1) The amendments made by Section 1 of Chapter 349 of
4the Statutes of 2012 shall become operative on January 1, 2013.
5(2) The amendments made by the act adding this paragraph
6shall become operative on January 1,
2016.
Section 21004 of the Revenue and Taxation Code, as
8added by Section 2 of Chapter 349 of the Statutes of 2012, is
9repealed.
O
96