BILL NUMBER: AB 2605 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY APRIL 27, 2010
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 amended, 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 an individual, the
individual 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 apply
only to information that is initially received by the Franchise Tax
Board on or after January 1, 2011. 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, 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).
(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 an
individual, the individual shall, subject to
paragraph (2), receive as a reward at least 15
25 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
, not to exceed two hundred fifty thousand dollars ($250,000)
. 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 , not to exceed one
hundred thousand dollars ($100,000) . In determining the reward
amount, the Franchise Tax Board shall take into account the
significance of the person's individual's
information and the role of the person
individual , and any legal representative of the
person individual , 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
individual .
(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 as adjusted exceeds two hundred fifty
thousand dollars ($200,000) ($250,000)
for any taxable year subject to the administrative or judicial
action and the tax, penalties, interest, additions to tax, and
additional amounts in dispute in the administrative or judicial
action exceed two million dollars ($2,000,000). Whether
the amount in dispute exceeds two million dollars ($2,000,000) shall
be determined by the Franchise Tax Board after the administrative or
judicial action has been finalized by the Franchise Tax Board.
(d) For purposes of this section, "collected proceeds" includes,
but is not limited to, penalties, interests
interest , 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)
(e) A contract with the Franchise Tax Board shall not
be necessary for any person individual
to receive a reward under this section.
(g) A person
(f) An individual who may receive
a reward under this section may be represented by counsel.
(h) Any person employed
(g) Any individual employed or formerly
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)
(h) 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.
(i) The Franchise Tax Board shall pay the reward amount 60 days
after the last of the following has occurred:
(1) The collected proceeds resulting from the administrative or
judicial action, or related action, or from any settlement in
response to that action are deposited into the General Fund.
(2) All legal remedies have been exhausted.
(3) The statute of limitations for filing a claim for refund for,
or otherwise for contesting, any tax or penalty has expired.
(j) The Franchise Tax Board shall have full discretion in
determining whether the information provided by and individual
warrants further investigation.
(k) The amendments made to this section by the act adding this
subdivision shall apply to 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) that is initially received by the
Franchise Tax Board on and after January 1, 2011. Any 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) that was received by the
Franchise Tax Board before January 1, 2011, shall not be eligible for
the reward program.
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.