BILL NUMBER: AB 2605 INTRODUCED
BILL TEXT
INTRODUCED BY Assembly Member De La Torre
FEBRUARY 19, 2010
An act to amend Section 19525 of the Revenue and Taxation Code,
relating to taxation.
LEGISLATIVE COUNSEL'S DIGEST
AB 2605, as introduced, De La Torre. Income and corporation taxes:
fraud reporting: reward program.
Existing tax laws impose various taxes and fees, and authorize the
Franchise Tax Board to administer the assessment, audit, and
collection of various taxes and fees. Existing law authorizes the
Franchise Tax Board to establish a reward program for information
resulting in the identification of underreported or unreported income
subject to taxes.
This bill would instead require the Franchise Tax Board to
establish a reward program under specified circumstances where, if
the Franchise Tax Board proceeds with an administrative or judicial
action based on information brought to the board's attention by a
person, the person would receive a percentage of any collected
proceeds, as defined, of the administrative action, judicial action,
or settlement in response to that action. This bill would require the
information provided to the board to be submitted under the penalty
of perjury.
This bill, by expanding the definition of an existing crime, would
impose a state-mandated local program.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 19525 of the Revenue and Taxation Code is
amended to read:
19525. (a) The Franchise Tax Board, under
regulations prescribed by the Franchise Tax Board, may
shall establish a reward program for information
resulting in the identification of underreported or unreported
income subject to taxes imposed by Part 10 (commencing with Section
17001) or Part 11 (commencing with Section 23001). Any
reward may not exceed 10 percent of the taxes collected as a result
of the information provided. Any person employed by or under contract
with any state or federal tax collection agency shall not be
eligible for a reward provided for pursuant to this section.
(b) (1) If the Franchise Tax Board proceeds with an administrative
or judicial action based on information brought to the Franchise Tax
Board's attention by a person, the person shall, subject to
paragraph (2), receive as a reward at least 15 percent but not more
than 30 percent of the collected proceeds of the administrative or
judicial action, or related action, or from any settlement in
response to that action. The determination of the amount of the
reward by the Franchise Tax Board shall depend upon the extent to
which the person substantially contributed to the administrative or
judicial action.
(2) (A) In the event the administrative or judicial action is one
which the Franchise Tax Board determines to be based principally on
disclosures of specified allegations arising from an administrative
or judicial hearing, from a governmental report, hearing, audit, or
investigation, or from the news media, the Franchise Tax Board may
award a sum that it deems appropriate that does not exceed 10 percent
of the collected proceeds resulting from the administrative or
judicial action, or related action, or from any settlement in
response to that action. In determining the reward amount, the
Franchise Tax Board shall take into account the significance of the
person's information and the role of the person, and any legal
representative of the person, in contributing to the administrative
hearing, judicial hearing, or settlement.
(B) The reward limitation described in this paragraph shall not
apply if the information resulting in the administrative or judicial
action was originally provided by the person.
(c) The reward program shall apply to administrative or judicial
actions against any taxpayer whose tax liability arose under Part 10
(commencing with Section 17001) or Part 11 (commencing with Section
23001), but in the case of a person whose income is subject to taxes
under Part 10 (commencing with Section 17001), only if the person's
gross income exceeds two hundred thousand dollars ($200,000) for any
taxable year subject to the administrative or judicial action and the
tax, penalties, interest, additions to tax, and additional amounts
in dispute exceed two million dollars ($2,000,000).
(d) For purposes of this section, "collected proceeds" includes,
but is not limited to, penalties, interests, additions to tax, and
any additional amounts.
(e) A determination regarding the amount or denial of a reward
may, within 30 days of the determination, be appealed to the State
Board of Equalization.
(f) A contract with the Franchise Tax Board shall not be necessary
for any person to receive a reward under this section.
(g) A person who may receive a reward under this section may be
represented by counsel.
(h) Any person employed by or under contract with any state or
federal tax collection agency shall not be eligible for a reward
provided for pursuant to this section.
(i) No reward shall be made under this section based on
information submitted to the Franchise Tax Board unless the
information is submitted under penalty of perjury.
SEC. 2. No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.