PART 12.3. Tax Recovery in the Underground Economy Criminal Enforcement Act
15925.
This part shall be known, and may be cited, as the Tax Recovery in the Underground Economy Criminal Enforcement Act.15926.
(a) The Tax Recovery in the Underground Economy Criminal Enforcement Program is hereby established in the Department of Justice to combat underground economic activities through a multiagency collaboration to do, to the extent practicable, the following:(1) Pool resources and leverage enforcement efforts.
(2) Collaborate and share data with state and federal partners.
(3) Efficiently prosecute violations covering jurisdictions of multiple agencies to address the severity of the crimes and impose appropriate penalties on convicted violators.
(4) Recover
state revenue lost to the underground economy.
(b) The Tax Recovery in the Underground Economy Criminal Enforcement Program shall include an executive board to ensure efficient and effective multiagency collaboration in furtherance of this act. The executive board shall consist of the following voting members:
(1) A representative from the Division of Law Enforcement at the Department of Justice.
(2) A representative from the Criminal Law Division at the Department of Justice.
(3) A representative from the Investigations and Special Operations Bureau at the California Department of Tax and Fee Administration.
(4) A representative from the Criminal Investigation Bureau at the Franchise Tax
Board.
(5) A representative from the Investigation Division at the Employment Development Department.
(c) The Tax Recovery in the Underground Economy Criminal Enforcement Program may, as the executive board deems appropriate, invite the following state agencies to join the executive board in an advisory capacity:
(1) The California Health and Human Services Agency.
(2) The Department of Consumer Affairs.
(3) The Department of Industrial Relations.
(4) The Department of Insurance.
(5) The Department of Motor Vehicles.
(6) The Department of the California Highway Patrol.
(7) The Department of Alcoholic Beverage Control.
(8) The Bureau of Cannabis Control.
(9) The Contractors’ State License Board.
(d) The Tax Recovery in the Underground Economy Criminal Enforcement Program may, as the executive board deems appropriate, invite other state and federal agencies to join the executive board in an advisory capacity subject to paragraph (2) of subdivision (b) of Section 15928.
(e) The addition of an advisory agency to the Tax Recovery in the Underground Economy Criminal Enforcement Program executive board shall be by written agreement between the voting
members of the executive board and the agency joining the executive board. The written agreement shall govern the participation of the agency joining the executive board. The written agreement shall include provisions ensuring that confidential information is shared only when necessary to assess leads, conduct an investigation, or prosecute a case.
15927.
(a) The Tax Recovery in the Underground Economy Criminal Enforcement Program shall include investigative teams located in Sacramento, Los Angeles, San Diego, the San Francisco Bay area, and Fresno under the direct oversight of the Department of Justice. The investigative teams shall include, but are not limited to, duly authorized representatives of the agencies listed in subdivision (b) of Section 15926. The addition of an agency to an investigative team shall be by written agreement between the Tax Recovery in the Underground Economy Criminal Enforcement Program’s executive board and the agency joining the investigative team. The written agreement shall govern the participation of the agency joining the investigative team.(b) Each
investigative team shall have a committee established by the Tax Recovery in the Underground Economy Criminal Enforcement Program’s executive board to ensure efficient and effective multi agency collaboration in each region in furtherance of this act.
(c) The Tax Recovery in the Underground Economy Criminal Enforcement Program’s executive board and each investigative team’s committee shall meet as needed, but shall meet at least quarterly, to conduct its business.
15928.
(a) For cases that involve tax or fee administration associated with underground economic activities, duly authorized members of the Tax Recovery in the Underground Economy Criminal Enforcement Program employed by an agency listed in subdivision (b) of Section 15926 or employed by an agency that joined the Tax Recovery in the Underground Economy Criminal Enforcement Program pursuant to subdivision (c) of Section 15926 shall exchange intelligence, data, including confidential tax and fee information, documents, information, complaints, or lead referrals for the purposes listed in subdivision (c).(b) (1) Notwithstanding subdivision (a), no person employed by an agency listed in subdivision (b) or (c) of Section 15926 shall
disclose confidential tax or fee information to a person employed by an agency invited to join the executive board pursuant to subdivision (d) of Section 15926, except as set forth in paragraph (2).
(2) For cases that involve a known or suspected felony level tax or fee evasion crime, voting members and advisory members may share confidential tax or fee information with other members of an investigatory team of the Tax Recovery in the Underground Economy Criminal Enforcement Program if all of the following criteria are met:
(A) The confidential tax or fee information is obtained by a voting member or advisory member of the Tax Recovery in the Underground Economy Criminal Enforcement Program pursuant to existing law, agreements authorized by existing law, or order by the Governor.
(B) The person who receives the
confidential tax or fee information is a peace officer.
(C) The confidential tax or fee information is for one of the purposes listed in subdivision (c) related to a felony level tax or fee evasion crime.
(D) The person receiving the confidential tax or fee information has a legitimate need to know to assess leads, conduct an investigation, or prosecute a case.
(E) There is a nondisclosure agreement that prohibits the person receiving the confidential tax or fee information from disclosing the information to any person that is not part of the Tax Recovery in the Underground Economy Criminal Enforcement Program or disclosing the information to any other unauthorized person.
(c) The intelligence, data, including confidential tax or fee information,
documents, information, complaints, and lead referrals exchanged pursuant to this section shall be used for the following purposes:
(1) To assess leads or referrals in order to determine if an investigation is warranted.
(2) To conduct investigations.
(3) To prosecute violations.
(4) To conduct data analytics.
(5) To enforce judgments.
(d) Any person who was or has been involved in the Tax Recovery in the Underground Economy Criminal Enforcement Program pursuant to Section 15926 or 15927 or any person who has at any time obtained that knowledge from any of the foregoing persons shall not divulge, or make known in any manner
not provided by law, any of the confidential information received by or reported to the Tax Recovery in the Underground Economy Criminal Enforcement Program. Confidential information authorized to be exchanged pursuant to this section shall retain its confidential status and shall otherwise remain subject to the confidentiality provisions contained in, but not limited to, all of the following provisions:
(1) Section 11183 as that section pertains to the Department of Justice.
(2) Sections 1094 and 1095 of the Unemployment Insurance Code as those sections pertain to the Employment Development Department.
(3) Sections 19542, 19542.1, and 19542.3 of the Revenue and Taxation Code as those Sections pertain to the Franchise Tax Board.
(4) Section 15619 of
this code, Section 42464.8 of the Public Resources Code, and Sections 7056, 7056.5, 8255, 9255, 9255.1, 30455, 32455, 32457, 38705, 38706, 43651, 45981, 45982, 45983, 45984, 46751, 50159, 50160, 50161, 55381, 60608, and 60609 of the Revenue and Taxation Code, as those sections pertain to the California Department of Tax and Fee Administration.
(5) Any other information confidentiality provisions in state law.
(6) Any information confidentiality provisions that are applicable to any agency that is added to the Tax Recovery in the Underground Economy Criminal Enforcement Program pursuant to subdivision (c) or (d) of Section 15926.
(e) A member of the Tax Recovery in the Underground Economy Criminal Enforcement Program shall not exchange federal tax data without authorization from the Internal Revenue Service.
(f) The Tax Recovery in the Underground Economy Criminal Enforcement Program’s executive board shall oversee the Tax Recovery in the Underground Economy Criminal Enforcement Program to ensure the protection of confidential tax and fee information pursuant to this part.
(g) The Tax Recovery in the Underground Economy Criminal Enforcement Program shall, to the extent the Legislature appropriates funds for purposes of this section, develop a data analytics system that enhances the efficiency and effectiveness of the multi agency collaboration set forth by this act.
15929.
(a) On or before March 31, 2020, and annually thereafter, the Department of Justice, in consultation with the executive board of the Tax Recovery in the Underground Economy Criminal Enforcement Program, shall submit a report to the Legislature that includes, but is not limited to, the following information: (1) The number of leads or complaints received by the Tax Recovery in the Underground Economy Criminal Enforcement Program during the reporting period.
(2) The number of cases investigated or prosecuted through civil action or criminal prosecution as a result of the work of the Tax Recovery in the Underground Economy Criminal Enforcement Program.
(3) The amount and final disposition of moneys collected through Tax Recovery in the Underground Economy Criminal Enforcement Program’s enforcement efforts.
(4) The status of the multiagency collaboration required by this act.
(5) A list of the agencies that received confidential tax or fee information pursuant to subdivision (b) of Section 15928.
(6) The number of instances, if any, of unauthorized or suspected unauthorized access, use, or disclosure of confidential tax or fee information. The report shall include the number of instances, if any, of unauthorized or suspected unauthorized access, use, or disclosure of confidential tax or fee information dating back to the inception of the Tax Recovery in the Underground Economy Criminal Enforcement Program
and its predecessor programs.
(7) The status of any efforts to plan for, develop, and implement a data analytics system that enhances the efficiency and effectiveness of the multiagency collaboration set forth in this act.
(8) Policy considerations, if any, to help advance the purpose of the Tax Recovery in the Underground Economy Criminal Enforcement Program.
(b) (1) A report to be submitted pursuant to subdivision (a) shall be submitted in compliance with Section 9795 of the Government Code.
(2) Pursuant to Section 10231.5, this section is repealed on January 1, 2024.