42-2064. Reimbursement of fees and other
costs; definitions
A. A taxpayer who is a prevailing party may be reimbursed for reasonable fees and
other costs related to an administrative proceeding that is brought by or against the
department in connection with an assessment, determination, collection or refund of any
tax listed in section 42-1101. For purposes of this subsection, a taxpayer is considered
to be a prevailing party only if both of the following are true:
1. The department's position was not substantially justified.
2. The taxpayer prevails as to the most significant issue or set of issues.
B. Reimbursement under this section may be denied if any of the following
circumstances apply:
1. During the course of the proceeding the taxpayer unduly and unreasonably
protracted the final resolution of the matter.
2. The reason that the taxpayer prevailed is due to an intervening change in the
applicable law.
C. The taxpayer shall present an itemization of the reasonable fees and other costs
to the taxpayer problem resolution officer within thirty days after the conclusion of the
administrative proceedings. The taxpayer problem resolution officer shall determine the
validity of the fees and other costs within thirty days after receiving the
itemization. The taxpayer problem resolution officer's decision is considered the
department's final decision or order and is subject to appeal to the state board under
section 42-1253.
D. The department of revenue shall pay the fees and other costs awarded as provided
in this section from any monies appropriated for such purpose. If the department of
revenue does not pay the fees and other costs within thirty days after demand by a person
who has received an award pursuant to this section, and if no further review or appeals
of the award are pending, the person may file a claim for the fees and other costs with
the department of administration, which shall pay the claim within thirty days, in the
same manner as an uninsured property loss under title 41, chapter 3.1, article 1. If, at
the time the department of revenue failed to pay the award, it had appropriated monies
either designated or assignable for the purpose of paying such awards, the legislature
shall reduce the department of revenue's operating appropriation for the following year
by the amount of the award and appropriate the amount of the reduction to the department
of administration, risk management division, as reimbursement for the loss.
E. Reimbursement to a taxpayer under this section shall not exceed twenty thousand
dollars or actual monies spent, whichever is less. The reimbursable attorney or other
representative fees shall not exceed one hundred dollars per hour or actual monies spent,
whichever is less, unless the state board of tax appeals determines that an increase in
the cost of living or a special factor such as the limited availability of qualified
attorneys for the proceeding involved justifies a higher fee.
F. The department shall adopt administrative rules to implement this section.
G. Notwithstanding any provision of title 12, chapter 3, article 5, a taxpayer who
is a prevailing party may only be reimbursed pursuant to this section.
H. For purposes of this section:
1. "Administrative proceeding" means any review proceeding or appeal pursuant to
section 42-1251 that is conducted under the authority of section 42-1003 and an appeal to
the state board of tax appeals pursuant to section 42-1253.
2. "Reasonable fees and other costs" means fees and other costs that are based on
prevailing market rates for the kind and quality of the furnished services, but not
exceeding the amounts actually spent for expert witnesses, the cost of any study,
analysis, report, test or project that is found to be necessary to prepare the party's
case and necessary fees for attorneys or other representatives.
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