Bill Text: CA SB540 | 2015-2016 | Regular Session | Introduced

California Senate Bill 540 (Prior Session Legislation)

NOTE: There are more recent revisions of this legislation. Read Latest Draft

Bill Title: Franchise Tax Board: Taxpayers' Rights Advocate.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Passed) 2015-10-06 - Chaptered by Secretary of State. Chapter 541, Statutes of 2015. [SB540 Detail]

Download: California-2015-SB540-Introduced.html

BILL NUMBER: SB 540	INTRODUCED
	BILL TEXT


INTRODUCED BY   Senator Hertzberg

                        FEBRUARY 26, 2015

   An act to amend and repeal Section 21004 of the Revenue and
Taxation Code, relating to taxation.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 540, as introduced, Hertzberg. Franchise Tax Board: Taxpayers'
Rights Advocate.
   The Katz-Harris Taxpayers' Bill of Rights Act establishes the
position of Taxpayers' Rights Advocate and provides specified
protections for taxpayers for purposes of, among other things,
determining their correct tax liability. Existing law, until January
1, 2016, authorizes the Taxpayers' Rights Advocate to abate
penalties, fees, additions to tax, or interest attributable to error
of the Franchise Tax Board, as specified. Existing law requires any
relief granted in which the total reduction exceeds $500, as
adjusted, to be submitted to the executive officer of the board for
concurrence, and limits the total relief granted to $7,500, as
adjusted.
   This bill would, on and after January 1, 2016, instead authorize
the chief counsel of the Franchise Tax Board to abate penalties,
fees, additions to tax, or interest attributable to error of the
Franchise Tax Board, remove the limit on the amount of relief that
may be granted and the adjustment provision relating to that amount,
specify the retention period for records of relief granted by the
chief counsel, and remove the sunset date, thus extending these
provisions indefinitely.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 21004 of the Revenue and Taxation Code, as
amended by Section 1 of Chapter 349 of the Statutes of 2012, is
amended to read:
   21004.  (a) The board shall establish the position of the
Taxpayers' Rights Advocate. The advocate or his or her designee shall
be responsible for coordinating resolution of taxpayer complaints
and problems, including any taxpayer complaints regarding
unsatisfactory treatment of taxpayers by board employees. The
advocate shall report directly to the executive officer of the board.

   (b) The advocate or his or her designee shall give highest
priority to reviewing and taking prompt and appropriate action,
including staying actions where taxpayers have suffered or will
suffer irreparable loss as the result of board action. Applicable
statutes of limitation shall be tolled during the pendency of a stay.
Any penalties and interest which would otherwise accrue shall not be
affected by the granting of a stay.
   (c) (1) On and after January 1, 2013,  and before January 1,
2016,  the advocate may review any application for relief
pursuant to this subdivision and abate any penalties, fees, additions
to tax, or interest assessed on a taxpayer, if it is determined by
the advocate that the penalties, fees, additions to tax, or interest
that have been assessed, or any part thereof, is attributable to any
of the following:
   (A) Erroneous action or erroneous inaction by the board in
processing documents filed or payments made by taxpayers.
   (B) Unreasonable delay caused by the board.
   (C) Erroneous written advice that does not qualify for relief
under Section 21012.
   (2) Relief may be granted pursuant to this subdivision only if no
significant aspect of that error or delay can be attributed to the
taxpayer involved and relief is not available under any other
provision of this part, Part 10 (commencing with Section 17001), or
Part 11 (commencing with Section 23001), including any relief granted
under any regulation or other administrative pronouncement of the
board.
   (3) (A) (i) Any relief granted pursuant to this subdivision in
which the total reduction in penalties, fees, additions to tax, or
interest exceeds five hundred dollars ($500) shall be submitted to
the executive officer for concurrence.
   (ii) The total relief granted pursuant to this subdivision may not
exceed seven thousand five hundred dollars ($7,500).
   (B) Whenever relief is granted under this subdivision, there shall
be placed on file in the office of the executive officer of the
board a public record with respect to that relief. The public record
shall include the following:
   (i) The taxpayer's name.
   (ii) The total amount involved.
   (iii) The amount payable or refundable due to the error or delay.
   (iv) A summary of why the relief is warranted.
   (4) A refund may be paid as a result of relief granted under this
subdivision only if the applicable statute of limitations, with
respect to filing a claim for refund, remains open as of the date
that the basis for providing relief, as authorized in subparagraphs
(A) to (C), inclusive, of paragraph (1), as reflected in a written
communication received by the advocate. 
   (d) (1) On and after January 1, 2016, the chief counsel of the
board may provide relief pursuant to this subdivision and abate any
penalties, fees, additions to tax, or interest assessed, if it is
determined by the chief counsel that the penalties, fees, additions
to tax, or interest that have been assessed, or any part thereof, is
attributable to any of the following:  
   (A) Erroneous action or erroneous inaction by the board in
processing documents filed or payments made by taxpayers.  
   (B) Unreasonable delay caused by the board.  
   (C) Erroneous written advice that does not qualify for relief
under Section 21012.  
   (2) Relief may be granted pursuant to this subdivision only if no
significant aspect of that error or delay can be attributed to the
taxpayer involved and relief is not available under any other
provision of this part, Part 10 (commencing with Section 17001), Part
10.2 (commencing with Section 18401), or Part 11 (commencing with
Section 23001), including any relief granted under any regulation or
other administrative pronouncement of the board.  
   (3) (A) Any relief granted pursuant to this subdivision in which
the total reduction in penalties, fees, additions to tax, or interest
exceeds five hundred dollars ($500) shall be submitted to the
executive officer for concurrence.  
   (B) Whenever relief is granted under this subdivision, there shall
be placed on file for at least one year in the office of the
executive officer of the board a public record with respect to that
relief. The public record shall include the following:  
   (i) The taxpayer's name.  
   (ii) The total amount involved.  
   (iii) The amount payable or refundable due to the error or delay.
 
   (iv) A summary of why the relief is warranted.  
   (4) A refund may be paid as a result of relief granted under this
subdivision only if the applicable statute of limitations, with
respect to filing a claim for refund, remains open as of the date
that the basis for providing relief, as authorized in subparagraphs
(A) to (C), inclusive, of paragraph (1), as determined by the board.
 
   (d) 
    (e)  No other entity may participate in the grant or
denial of relief pursuant to this section. 
   (e) 
    (f)  On January 1 of each calendar year beginning on or
after January 1, 2009,  and before January 1, 2016, the
board shall increase the amount specified in subparagraph (A) of
paragraph (3) of subdivision (c) to the amount computed under this
subdivision. That adjustment shall be made as follows:
   (1) The Department of Industrial Relations shall transmit annually
to the board the percentage change in the California Consumer Price
Index for All Urban Consumers, as modified for rental equivalent home
ownership for all items, from June of the prior calendar year to
June of the current calendar year, no later than August 1 of the
current calendar year.
   (2) The board shall then:
   (A) Compute the percentage change in the California Consumer Price
Index for All Urban Consumers from the later of June 2008 or June of
the calendar year prior to the last increase in the amount specified
in paragraph (1).
   (B) Compute the inflation adjustment factor by adding 100 percent
to the percentage change so computed, and converting the resulting
percentage to the decimal equivalent.
   (C) Multiply the amount specified in paragraph (1) for the
immediately preceding calendar year, as adjusted under this
subparagraph, by the inflation adjustment factor determined in
subparagraph (B), and round off the resulting product to the nearest
one hundred dollars ($100). 
   (f) 
    (g)  Notwithstanding any other law or rule of law, all
determinations made under paragraph (1) of subdivision (c)  and
paragraph (1) of subdivision (d)  shall not be subject to review
in any administrative or judicial proceeding. 
   (g)  
   The amendments made by the act adding this subdivision shall
become operative on January 1, 2013.  
   (h) This section shall remain in effect only until January 1,
2016, and as of that date is repealed. 
  SEC. 2.  Section 21004 of the Revenue and Taxation Code, as added
by Section 2 of Chapter 349 of the Statutes of 2012, is repealed.

   21004.  (a) The board shall establish the position of the
Taxpayers' Rights Advocate. The advocate or his or her designee shall
be responsible for coordinating resolution of taxpayer complaints
and problems, including any taxpayer complaints regarding
unsatisfactory treatment of taxpayers by board employees. The
advocate shall report directly to the executive officer of the board.

   (b) The advocate or his or her designee shall give highest
priority to reviewing and taking prompt and appropriate action,
including staying actions where taxpayers have suffered or will
suffer irreparable loss as the result of board action. Applicable
statutes of limitation shall be tolled during the pendency of a stay.
Any penalties and interest which would otherwise accrue shall not be
affected by the granting of a stay.
   (c) This section shall become operative on January 1, 2016.