Bill Text: AZ HB2202 | 2011 | Fiftieth Legislature 1st Regular | Engrossed
Bill Title: Department of revenue closing agreements
Spectrum: Partisan Bill (Republican 1-0)
Status: (Passed) 2011-04-28 - Governor Signed [HB2202 Detail]
Download: Arizona-2011-HB2202-Engrossed.html
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House Engrossed |
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State of Arizona House of Representatives Fiftieth Legislature First Regular Session 2011
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HOUSE BILL 2202 |
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AN ACT
Amending section 42-2056, Arizona Revised Statutes; relating to tax closing agreements.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Section 42-2056, Arizona Revised Statutes, is amended to read:
42-2056. Closing agreements in cases of extensive taxpayer misunderstanding or misapplication; attorney general approval; rules; definition
A. If the department determines that noncompliance with tax obligations results from extensive misunderstanding or misapplication of provisions of this title or title 43 it may shall enter into closing agreements with those taxpayers under the following terms and conditions:
1. Extensive misunderstanding or misapplication of the tax laws occurs if the department determines that more than sixty per cent of the persons in the affected class have failed to properly account for their taxes owing to the same misunderstanding or misapplication of the tax laws.
2. The department shall publicly declare the nature of the possible misunderstanding or misapplication and the proposed definition of the class of affected taxpayers and shall conduct a public hearing to hear testimony regarding the extent of the misunderstanding or misapplication and the definition of the affected class. The department shall notify the attendees at the public hearing of its determination as to the extent of the misunderstanding or misapplication and the definition of the affected class within sixty days after the public hearing and shall publish that determination on its website on the same date as the date of notification to the attendees.
3. If, after the public hearing, the department determines that a class of affected taxpayers has failed to comply with their tax obligations because of extensive misunderstanding or misapplication of the tax laws it shall issue a tax ruling announcing that finding and publish the ruling in a newspaper of general circulation.
4. A closing agreement under this section may abate some or all of the penalties, interest and tax that the taxpayers have failed to remit, or the agreement may provide for the prospective treatment of the matter as to the class of affected taxpayers. Notwithstanding section 42‑1113, all taxpayers in the class shall be offered the opportunity to enter into a similar agreement for the same tax periods.
5. Taxpayers in the affected class who have properly accounted for their tax obligations for these tax periods shall be offered the opportunity to enter into a similar closing agreement providing for a pro rata credit or refund of their taxes previously paid, subject to section 42‑1104, subsection A and section 42‑1106, subsection A.
6. The closing agreement shall require the taxpayers to properly account for and pay such taxes in the future. If a taxpayer fails to comply with that requirement, the agreement is voidable by the department and the department may assess the taxpayer for the delinquent taxes. The department may issue such a proposed assessment within six months after the date that it declares the agreement void or within the period prescribed by section 42‑1104, whichever is later.
B. A person who is denied relief as the result of the department's determination described in subsection A, paragraph 2 of this section may appeal that determination pursuant to chapter 1, article 6 of this title. The department shall redact confidential information, if necessary, in order to comply with section 42-2002 during the course of any appeal. A person who files an appeal under this subsection, who also has another appeal pending pursuant to chapter 1, article 6 of this title on a matter related to the matter at issue in the department's determination under this section, may petition the relevant appellate forum to hold that appeal in abeyance pending the resolution of the person's appeal pursuant to this section, and the agency, tribunal or court must grant the petition.
B. C. Before entering into closing agreements pursuant to this section, the department shall secure the approval of the attorney general of the form of the tax ruling and the form of the agreements. The department may not enter into the agreements without the such approval of from the attorney general.
C. D. After a closing agreement has been signed pursuant to this section, and subject to the taxpayer's compliance with the requirements of subsection A, paragraph 6 of this section, it is final and conclusive except on a showing of fraud, malfeasance or misrepresentation of a material fact. The case shall not be reopened as to the matters agreed on, and the agreement shall not be modified by any officer, employee or agent of the state. The agreement or any determination, assessment, collection, payment abatement, refund or credit made pursuant to the agreement shall not be annulled, modified, set aside or disregarded in any suit, action or proceeding.
D. E. The department shall report in writing its activities under this section to the governor, the president of the senate and the speaker of the house of representatives on or before February 1 of each year.
E. F. The department may adopt rules to implement this section.
F. G. For the purposes of this section, "affected class" means taxpayers who are similarly situated and directly affected by the department's position in a tax matter. For transaction privilege or use tax purposes, affected class may include taxpayers in the same industry code under the North American industrial classification system code, if applicable to the tax matter. For the purposes of this section, affected class shall not be broadly described unless such description increases the number of taxpayers who are eligible for relief.
Sec. 2. Legislative intent; requests for relief
A. The legislature intends by this act to bring entire classes of taxpayers into compliance with Arizona tax laws on a prospective basis in situations where widespread noncompliance was due to a misunderstanding or misapplication of the law.
B. Persons who sought relief under section 42-2056, Arizona Revised Statutes, before the effective date of this act, but who failed to obtain relief, may resubmit their request for relief within one year after the effective date of this act.
