BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 129
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          Date of Hearing:   May 20, 2009

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Kevin De Leon, Chair

                       AB 129 (Ma) - As Amended:  May 4, 2009 

          Policy Committee:                              Judiciary     
          Vote:        9-0
                       Revenue and Taxation                   8-0     

          Urgency:     Yes                  State Mandated Local Program:  
          No     Reimbursable:              

           SUMMARY  

          This bill re-enacts a statute that, in conformity with federal  
          law, provides attorney-client privilege to specified  
          communications between a federally authorized tax practitioner  
          and a client, when the practitioner is representing the client  
          on a tax matter before state tax collection agencies. 

           FISCAL EFFECT  

          Negligible impact on state revenues and costs.

           COMMENTS  

           1)Background  . The IRS Restructuring and Reform Act of 1998  
            provides a tax practitioner representing taxpayers on tax  
            matters before the IRS or in non-criminal court proceedings  
            with the same confidential communication privilege that  
            applies to attorneys and their clients. California added a  
            provision in 2000 to state law to allow a more limited  
            confidentiality privilege to tax practitioners representing  
            California taxpayers before the Board of Equalization,  
            Employment Development Department, and the Franchise Tax  
            Board. The provisions of the California confidentiality  
            privilege were, inadvertently, allowed to sunset on January 1,  
            2009. 

           2)Rationale  . According to the author's office, the purpose of  
            this bill is to provide consistency with the federal statutes  
            that provide confidentiality protections for the  
            communications between taxpayers and their tax practitioners,  








                                                                  AB 129
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            which encourages frank and open discussions in the preparation  
            of both their federal and state tax returns.
           
           Analysis Prepared by  :    Brad Williams / APPR. / (916) 319-2081