41160. The board shall administer this article. Unless the context
indicates otherwise, the provisions of this article shall apply to
this part.
41161. (a) The board shall establish the position of the Taxpayers'
Rights Advocate. The advocate or his or her designee shall be
responsible for facilitating resolution of taxpayer complaints and
problems, including any taxpayer complaints regarding unsatisfactory
treatment of taxpayers by board employees, and staying actions where
taxpayers have suffered or will suffer irreparable loss as the result
of those actions. Applicable statutes of limitation shall be tolled
during the pendency of a stay. Any penalties and interest that would
otherwise accrue shall not be affected by the granting of a stay.
(b) The advocate shall report directly to the executive officer of
the board.
41162. (a) The board shall develop and implement an education and
information program directed at, but not limited to, all of the
following groups:
(1) Taxpayers newly registered with the board.
(2) Board audit and compliance staff.
(b) The education and information program shall include all of the
following:
(1) A program of written communication with newly registered
taxpayers explaining in simplified terms their duties and
responsibilities.
(2) Participation in seminars and similar programs organized by
federal, state, and local agencies.
(3) Revision of taxpayer educational materials currently produced
by the board that explain the most common areas of taxpayer
nonconformance in simplified terms.
(4) Implementation of a continuing education program for audit and
compliance personnel to include the application of new legislation
to taxpayer activities and areas of recurrent taxpayer noncompliance
or inconsistency of administration.
(c) Electronic media used pursuant to this section shall not
represent the voice, picture, or name of members of the board or the
Controller.
41163. The board shall conduct an annual hearing before the full
board where industry representatives and individual taxpayers are
allowed to present their proposals on changes to the Emergency
Telephone Users Surcharge Law which may further improve voluntary
compliance and the relationship between taxpayers and government.
41164. The board shall prepare and publish brief but comprehensive
statements in simple and nontechnical language that explain
procedures, remedies, and the rights and obligations of the board and
taxpayers. As appropriate, statements shall be provided to taxpayers
with the initial notice of audit, the notice of proposed additional
taxes, any subsequent notice of tax due, or other substantive
notices. Additionally, the board shall include this language for
statements in the annual tax information bulletins that are mailed to
taxpayers.
41165. (a) The total amount of revenue collected or assessed
pursuant to this part shall not be used for any of the following:
(1) To evaluate individual officers or employees.
(2) To impose or suggest production quotas or goals, other than
quotas or goals with respect to accounts receivable.
(b) The board shall certify in its annual report submitted
pursuant to Section 15616 of the Government Code that revenue
collected or assessed is not used in a manner prohibited by
subdivision (a).
(c) Nothing in this section shall prohibit the setting of goals
and the evaluation of performance with respect to productivity and
the efficient use of time.
41166. The board shall develop and implement a program that will
evaluate an individual employee's or officer's performance with
respect to his or her contact with taxpayers. The development and
implementation of the program shall be coordinated with the Taxpayers'
Rights Advocate.
41167. The board shall, in cooperation with the Taxpayers' Rights
Advocate, and other interested taxpayer-oriented groups, develop a
plan to reduce the time required to resolve petitions for
redetermination and claims for refunds. The plan shall include
determination of standard timeframes and special review of cases
which take more time than the appropriate standard timeframe.
41168. Procedures of the board, relating to appeals staff review
conferences before a staff attorney or supervising tax auditor
independent of the assessing department, shall include all of the
following:
(a) Any conference shall be held at a reasonable time at a board
office that is convenient to the taxpayer.
(b) The conference may be recorded only if prior notice is given
to the taxpayer and the taxpayer is entitled to receive a copy of the
recording.
(c) The taxpayer shall be informed prior to any conference that he
or she has a right to have present at the conference his or her
attorney, accountant, or other designated agent.
41169. (a) Every taxpayer is entitled to be reimbursed for any
reasonable fees and expenses related to a hearing before the board if
all of the following conditions are met:
(1) The taxpayer files a claim for the fee and expenses with the
board within one year of the date the decision of the board becomes
final.
(2) The board, in its sole discretion, finds that the action taken
by the board staff was unreasonable.
(3) The board decides that the taxpayer be awarded a specific
amount of fees and expenses related to the hearing, in an amount
determined by the board in its sole discretion.
(b) To determine whether the board staff has been unreasonable,
the board shall consider whether the board staff has established that
its position was substantially justified.
(c) The amount of reimbursed fees and expenses shall be limited to
the following:
(1) Fees and expenses incurred after the date of the notice of
determination, jeopardy determination, or a claim for refund.
(2) If the board finds that the staff was unreasonable with
respect to certain issues but reasonable with respect to other
issues, the amount of reimbursed fees and expenses shall be limited
to those that relate to the issues where the staff was unreasonable.
(d) Any proposed award by the board pursuant to subdivision (a)
shall be available as a public record for at least 10 days prior to
the effective date of the award.
(e) The amendments to this section by the act adding this
subdivision shall be operative for claims filed on or after January
1, 2000.
41170. (a) An officer or employee of the board acting in connection
with any law administered by the board shall not knowingly
authorize, require, or conduct any investigation of, or surveillance
over, any person for nontax administration related purposes.
(b) Any person violating subdivision (a) shall be subject to
disciplinary action in accordance with the State Civil Service Act,
including dismissal from office or discharge from employment.
(c) This section shall not apply with respect to any otherwise
lawful investigation concerning organized crime activities.
(d) The provisions of this section are not intended to prohibit,
restrict, or prevent the exchange of information where the person is
being investigated for multiple violations which include emergency
telephone users surcharge violations.
(e) For the purposes of this section:
(1) "Investigation" means any oral or written inquiry directed to
any person, organization, or governmental agency.
(2) "Surveillance" means the monitoring of persons, places, or
events by means of electronic interception, overt or covert
observations, or photography, and the use of informants.
41171. (a) It is the intent of the Legislature that the State Board
of Equalization, its staff, and the Attorney General pursue
settlements as authorized under this section with respect to
surcharge matters in dispute that are the subject of protests,
appeals, or refund claims, consistent with a reasonable evaluation of
the costs and risks associated with litigation of these matters.
(b) (1) Except as provided in paragraph (3) and subject to
paragraph (2), the executive director or chief counsel, if authorized
by the executive director, of the board may recommend to the State
Board of Equalization, itself, a settlement of any surcharge matter
in dispute.
(2) No recommendation of settlement shall be submitted to the
board, itself, unless and until that recommendation has been
submitted by the executive director or chief counsel to the Attorney
General. Within 30 days of receiving that recommendation, the
Attorney General shall review the recommendation and advise, in
writing, the executive director or chief counsel of the board of his
or her conclusions as to whether the recommendation is reasonable
from an overall perspective. The executive director or chief counsel
shall, with each recommendation of settlement submitted to the board,
itself, also submit the Attorney General's written conclusions
obtained pursuant to this paragraph.
(3) A settlement of any civil surcharge matter in dispute
involving a reduction of surcharge or penalties in settlement, the
total of which reduction of surcharge and penalties in settlement
does not exceed five thousand dollars ($5,000), may be approved by
the executive director and chief counsel, jointly. The executive
director shall notify the board, itself, of any settlement approved
pursuant to this paragraph.
(c) Whenever a reduction of surcharge, or penalties, or total
surcharge and penalties in settlement in excess of five hundred
dollars ($500) is approved pursuant to this section, there shall be
placed on file, for at least one year, in the office of the executive
director of the board a public record with respect to that
settlement. The public record shall include all of the following
information:
(1) The name or names of the surcharge payers who are parties to
the settlement.
(2) The total amount in dispute.
(3) The amount agreed to pursuant to the settlement.
(4) A summary of the reasons why the settlement is in the best
interests of the State of California.
(5) For any settlement approved by the board, itself, the Attorney
General's conclusion as to whether the recommendation of settlement
was reasonable from an overall perspective.
The public record shall not include any information that relates
to any trade secret, patent, process, style of work, apparatus,
business secret, or organizational structure that, if disclosed,
would adversely affect the surcharge payer or the national defense.
(d) The members of the State Board of Equalization shall not
participate in the settlement of surcharge matters pursuant to this
section, except as provided in subdivision (e).
(e) (1) Any recommendation for settlement shall be approved or
disapproved by the board, itself, within 45 days of the submission of
that recommendation to the board. Any recommendation for settlement
that is not either approved or disapproved by the board, itself,
within 45 days of the submission of that recommendation shall be
deemed approved. Upon approval of a recommendation for settlement,
the matter shall be referred back to the executive director or chief
counsel in accordance with the decision of the board.
(2) Disapproval of a recommendation for settlement shall be made
only by a majority vote of the board. Where the board disapproves a
recommendation for settlement, the matter shall be remanded to board
staff for further negotiation, and may be resubmitted to the board,
in the same manner and subject to the same requirements as the
initial submission, at the discretion of the executive director or
chief counsel.
(f) All settlements entered into pursuant to this section shall be
final and nonappealable, except upon a showing of fraud or
misrepresentation with respect to a material fact.
(g) Any proceedings undertaken by the board itself pursuant to a
settlement as described in this section shall be conducted in a
closed session or sessions.
(h) This section shall apply only to surcharge matters in dispute
on or after the effective date of the act adding this subdivision.
(i) The Legislature finds that it is essential for fiscal purposes
that the settlement program authorized by this section be
expeditiously implemented. Accordingly, Chapter 3.5 (commencing with
Section 11340) of Part 1 of Division 3 of Title 2 of the Government
Code shall not apply to any determination, rule, notice, or guideline
established or issued by the board in implementing and administering
the settlement program authorized by this section.
41171.5. (a) (1) Beginning on January 1, 2007, the executive
director and chief counsel of the board, or their delegates, may
compromise any final surcharge liability where the reduction of
surcharges is seven thousand five hundred dollars ($7,500) or less.
(2) Except as provided in paragraph (3), the board, upon
recommendation by its executive director and chief counsel, jointly,
may compromise a final surcharge liability involving a reduction in
surcharges in excess of seven thousand five hundred dollars ($7,500).
Any recommendation for approval of an offer in compromise that is
not either approved or disapproved within 45 days of the submission
of the recommendation shall be deemed approved.
(3) The board, itself, may by resolution delegate to the executive
director and the chief counsel, jointly, the authority to compromise
a final surcharge liability in which the reduction of surcharges is
in excess of seven thousand five hundred dollars ($7,500), but less
than ten thousand dollars ($10,000).
(b) For purposes of this section, "a final surcharge liability"
means any final surcharge liability arising under Part 20 (commencing
with Section 41001), or related interest, additions to surcharges,
penalties, or other amounts assessed under this part.
(c) (1) Offers in compromise shall be considered only for
liabilities that were generated from a business that has been
discontinued or transferred, where the surcharge payer making the
offer no longer has a controlling interest or association with the
transferred business or has a controlling interest or association
with a similar type of business as the transferred or discontinued
business.
(2) Notwithstanding paragraph (1), a qualified final surcharge
liability may be compromised regardless of whether the business has
been discontinued or transferred or whether the surcharge payer has a
controlling interest or association with a similar type of business
as the transferred or discontinued business. All other provisions of
this section that apply to a final surcharge liability shall also
apply to a qualified final surcharge liability, and no compromise
shall be made under this subdivision unless all other requirements of
this section are met. For purposes of this subdivision, a "qualified
final surcharge liability" means either of the following:
(A) That part of a final surcharge liability, including related
interest, additions to surcharge, penalties, or other amounts
assessed under this part, arising from a transaction or transactions
in which the board finds no evidence that the service supplier
collected the surcharge from the service user or other person and
which was determined against the service supplier under Article 3
(commencing with Section 41070), Article 4 (commencing with Section
41080), or Article 5 (commencing with Section 41085) of Chapter 4.
(B) That part of a final surcharge liability, including related
interest, additions to surcharge, penalties, or other amounts
assessed under this part, determined under Article 3 (commencing with
Section 41070), Article 4 (commencing with Section 41080), and
Article 5 (commencing with Section 41085) of Chapter 4 against a
service user who is a consumer that is not required to register with
the board under Article 3 (commencing with section 41040) of Chapter
2.
(3) A qualified final surcharge liability may not be compromised
with any of the following:
(A) A surcharge payer who previously received a compromise under
paragraph (2) for a liability, or a part thereof, arising from a
transaction or transactions that are substantially similar to the
transaction or transactions attributable to the liability for which
the surcharge payer is making the offer.
(B) A business that was transferred by a surcharge payer who
previously received a compromise under paragraph (2) and who has a
controlling interest or association with the transferred business,
when the liability for which the offer is made is attributable to a
transaction or transactions substantially similar to the transaction
or transactions for which the surcharge payer's liability was
previously compromised.
(C) A business in which a surcharge payer who previously received
a compromise under paragraph (2) has a controlling interest or
association with a similar type of business for which the surcharge
payer received the compromise, when the liability of the business
making the offer arose from a transaction or transactions
substantially similar to the transaction or transactions for which
the surcharge payer's liability was previously compromised.
(d) The board may, in its discretion, enter into a written
agreement which permits the surcharge payer to pay the compromise in
installments for a period not exceeding one year. The agreement may
provide that such installments shall be paid by electronic funds
transfers or any other means to facilitate the payment of each
installment.
(e) Except for any recommendation for approval as specified in
subdivision (a), the members of the State Board of Equalization shall
not participate in any offer in compromise matters pursuant to this
section.
(f) A surcharge payer that has received a compromise under
paragraph (2) of subdivision (c) may be required to enter into any
collateral agreement that is deemed necessary for the protection of
the interests of the state. A collateral agreement may include a
provision that allows the board to reestablish the liability, or any
portion thereof, if the surcharge payer has sufficient annual income
during the succeeding five-year period. The board shall establish
criteria for determining "sufficient annual income" for purposes of
this subdivision.
(g) A surcharge payer that has received a compromise under
paragraph (2) of subdivision (c) shall file and pay by the due date
all subsequently required emergency telephone users surcharge returns
for a five-year period from the date the liability is compromised,
or until the surcharge payer is no longer required to file emergency
telephone users surcharge returns, whichever period is earlier.
(h) Offers in compromise shall not be considered where the
surcharge payer has been convicted of felony tax evasion under this
part during the liability period.
(i) For amounts to be compromised under this section, the
following conditions shall exist:
(1) The surcharge payer shall establish that:
(A) The amount offered in payment is the most that can be expected
to be paid or collected from the surcharge payer's present assets or
income.
(B) The surcharge payer does not have reasonable prospects of
acquiring increased income or assets that would enable the surcharge
payer to satisfy a greater amount of the liability than the amount
offered, within a reasonable period of time.
(2) The board shall have determined that acceptance of the
compromise is in the best interest of the state.
(j) A determination by the board that it would not be in the best
interest of the state to accept an offer in compromise in
satisfaction of a final surcharge liability shall not be subject to
administrative appeal or judicial review.
(k) (1) Offers for liabilities with a fraud or evasion penalty
shall require a minimum offer of the unpaid surcharge and fraud or
evasion penalty.
(2) The minimum offer may be waived if it can be shown that the
surcharge payer making the offer was not the person responsible for
perpetrating the fraud or evasion. This authorization to waive only
applies to partnership accounts where the intent to commit fraud or
evasion can be clearly attributed to a partner of the surcharge
payer.
(l) When an offer in compromise is either accepted or rejected, or
the terms and conditions of a compromise agreement are fulfilled,
the board shall notify the surcharge payer in writing. In the event
an offer is rejected, the amount posted will either be applied to the
liability or refunded, at the discretion of the surcharge payer.
(m) When more than one surcharge payer is liable for the debt,
such as with spouses or partnerships or other business combinations,
including, but not limited to, surcharge payers who are liable
through dual determination or successor's liability, the acceptance
of an offer in compromise from one liable surcharge payer shall
reduce the amount of the liability of the other surcharge payers by
the amount of the accepted offer.
(n) Whenever a compromise of surcharges or penalties or total
surcharges and penalties in excess of five hundred dollars ($500) is
approved, there shall be placed on file for at least one year in the
office of the executive director of the board a public record with
respect to that compromise. The public record shall include all of
the following information:
(1) The name of the surcharge payer.
(2) The amount of unpaid surcharges and related penalties,
additions to surcharges, interest, or other amounts involved.
(3) The amount offered.
(4) A summary of the reason why the compromise is in the best
interest of the state.
The public record shall not include any information that relates
to any trade secrets, patent, process, style of work, apparatus,
business secret, or organizational structure, that if disclosed,
would adversely affect the surcharge payer or violate the
confidentiality provisions of Section 41131. No list shall be
prepared and no releases distributed by the board in connection with
these statements.
(o) Any compromise made under this section may be rescinded, all
compromised liabilities may be reestablished, without regard to any
statute of limitations that otherwise may be applicable, and no
portion of the amount offered in compromise refunded, if either of
the following occurs:
(1) The board determines that any person did any of the following
acts regarding the making of the offer:
(A) Concealed from the board any property belonging to the estate
of any surcharge payer or other person liable for the surcharge.
(B) Received, withheld, destroyed, mutilated, or falsified any
book, document, or record or made any false statement, relating to
the estate or financial condition of the surcharge payer or other
person liable for the surcharge.
(2) The surcharge payer fails to comply with any of the terms and
conditions relative to the offer.
(p) Any person who, in connection with any offer or compromise
under this section, or offer of that compromise to enter into that
agreement, willfully does either of the following shall be guilty of
a felony and, upon conviction, shall be fined not more than fifty
thousand dollars ($50,000) or imprisoned in the state prison, or
both, together with the costs of investigation and prosecution:
(1) Conceals from any officer or employee of this state any
property belonging to the estate of a surcharge payer or other person
liable in respect of the surcharge.
(2) Receives, withholds, destroys, mutilates, or falsifies any
book, document, or record, or makes any false statement, relating to
the estate or financial condition of the surcharge payer or other
person liable in respect of the surcharge.
(q) For purposes of this section, "person" means the surcharge
payer, any member of the surcharge payer's family, any corporation,
agent, fiduciary, or representative of, or any other individual or
entity acting on behalf of, the surcharge payer, or any other
corporation or entity owned or controlled by the surcharge payer,
directly or indirectly, or that owns or controls the surcharge payer,
directly or indirectly.
(r) This section shall remain in effect only until January 1,
2013, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2013, deletes or extends
that date.
41171.5. (a) (1) The executive director and chief counsel of the
board, or their delegates, may compromise any final surcharge
liability where the reduction of surcharges is seven thousand five
hundred dollars ($7,500) or less.
(2) Except as provided in paragraph (3), the board, upon
recommendation by its executive director and chief counsel, jointly,
may compromise a final surcharge liability involving a reduction in
surcharges in excess of seven thousand five hundred dollars ($7,500).
Any recommendation for approval of an offer in compromise that is
not either approved or disapproved within 45 days of the submission
of the recommendation shall be deemed approved.
(3) The board, itself, may by resolution delegate to the executive
director and the chief counsel, jointly, the authority to compromise
a final surcharge liability in which the reduction of surcharges is
in excess of seven thousand five hundred dollars ($7,500), but less
than ten thousand dollars ($10,000).
(b) For purposes of this section, "a final surcharge liability"
means any final surcharge liability arising under Part 20 (commencing
with Section 41001), or related interest, additions to surcharges,
penalties, or other amounts assessed under this part.
(c) Offers in compromise shall be considered only for liabilities
that were generated from a business that has been discontinued or
transferred, where the surcharge payer making the offer no longer has
a controlling interest or association with the transferred business
or has a controlling interest or association with a similar type of
business as the transferred or discontinued business.
(d) Offers in compromise shall not be considered where the
surcharge payer has been convicted of felony tax evasion under this
part during the liability period.
(e) For amounts to be compromised under this section, the
following conditions shall exist:
(1) The surcharge payer shall establish that:
(A) The amount offered in payment is the most that can be expected
to be paid or collected from the surcharge payer's present assets or
income.
(B) The surcharge payer does not have reasonable prospects of
acquiring increased income or assets that would enable the surcharge
payer to satisfy a greater amount of the liability than the amount
offered, within a reasonable period of time.
(2) The board shall have determined that acceptance of the
compromise is in the best interest of the state.
(f) A determination by the board that it would not be in the best
interest of the state to accept an offer in compromise in
satisfaction of a final surcharge liability shall not be subject to
administrative appeal or judicial review.
(g) (1) Offers for liabilities with a fraud or evasion penalty
shall require a minimum offer of the unpaid surcharge and fraud or
evasion penalty.
(2) The minimum offer may be waived if it can be shown that the
surcharge payer making the offer was not the person responsible for
perpetrating the fraud or evasion. This authorization to waive only
applies to partnership accounts where the intent to commit fraud or
evasion can be clearly attributed to a partner of the surcharge
payer.
(h) When an offer in compromise is either accepted or rejected, or
the terms and conditions of a compromise agreement are fulfilled,
the board shall notify the surcharge payer in writing. In the event
an offer is rejected, the amount posted will either be applied to the
liability or refunded, at the discretion of the surcharge payer.
(i) When more than one surcharge payer is liable for the debt,
such as with spouses or partnerships or other business combinations,
including, but not limited to, surcharge payers who are liable
through dual determination or successor's liability, the acceptance
of an offer in compromise from one liable surcharge payer shall
reduce the amount of the liability of the other surcharge payers by
the amount of the accepted offer.
(j) Whenever a compromise of surcharges or penalties or total
surcharges and penalties in excess of five hundred dollars ($500) is
approved, there shall be placed on file for at least one year in the
office of the executive director of the board a public record with
respect to that compromise. The public record shall include all of
the following information:
(1) The name of the surcharge payer.
(2) The amount of unpaid surcharges and related penalties,
additions to surcharges, interest, or other amounts involved.
(3) The amount offered.
(4) A summary of the reason why the compromise is in the best
interest of the state.
The public record shall not include any information that relates
to any trade secrets, patent, process, style of work, apparatus,
business secret, or organizational structure, that if disclosed,
would adversely affect the surcharge payer or violate the
confidentiality provisions of Section 41131. No list shall be
prepared and no releases distributed by the board in connection with
these statements.
(k) Any compromise made under this section may be rescinded, all
compromised liabilities may be reestablished, without regard to any
statute of limitations that otherwise may be applicable, and no
portion of the amount offered in compromise refunded, if either of
the following occurs:
(1) The board determines that any person did any of the following
acts regarding the making of the offer:
(A) Concealed from the board any property belonging to the estate
of any surcharge payer or other person liable for the surcharge.
(B) Received, withheld, destroyed, mutilated, or falsified any
book, document, or record or made any false statement, relating to
the estate or financial condition of the surcharge payer or other
person liable for the surcharge.
(2) The surcharge payer fails to comply with any of the terms and
conditions relative to the offer.
(l) Any person who, in connection with any offer or compromise
under this section, or offer of that compromise to enter into that
agreement, willfully does either of the following shall be guilty of
a felony and, upon conviction, shall be fined not more than fifty
thousand dollars ($50,000) or imprisoned in the state prison, or
both, together with the costs of investigation and prosecution:
(1) Conceals from any officer or employee of this state any
property belonging to the estate of a surcharge payer or other person
liable in respect of the surcharge.
(2) Receives, withholds, destroys, mutilates, or falsifies any
book, document, or record, or makes any false statement, relating to
the estate or financial condition of the surcharge payer or other
person liable in respect of the surcharge.
(m) For purposes of this section, "person" means the surcharge
payer, any member of the surcharge payer's family, any corporation,
agent, fiduciary, or representative of, or any other individual or
entity acting on behalf of, the surcharge payer, or any other
corporation or entity owned or controlled by the surcharge payer,
directly or indirectly, or that owns or controls the surcharge payer,
directly or indirectly.
(n) This section shall become operative on January 1, 2013.
41172. (a) The board shall release any levy or notice to withhold
issued pursuant to this part on any property in the event that the
expense of the sale process exceeds the liability for which the levy
is made.
(b) The Taxpayers' Rights Advocate may order the release of any
levy or notice to withhold issued pursuant to this part or, within 90
days from the receipt of funds pursuant to a levy or notice to
withhold, order the return of any amount up to one thousand five
hundred dollars ($1,500) of moneys received, upon his or her finding
that the levy or notice to withhold threatens the health or welfare
of the taxpayer or his or her spouse and dependents or family.
(c) The board shall not sell any seized property until it has
first notified the taxpayer in writing of the exemptions from levy
under Chapter 4 (commencing with Section 703.010) of Division 2 of
Title 9 of Part 2 of the Code of Civil Procedure.
(d) This section shall not apply to the seizure of any property as
a result of a jeopardy assessment.
41172.5. (a) If any property has been levied upon, the property or
the proceeds from the sale of the property shall be returned to the
taxpayer if the board determines any one of the following:
(1) The levy on the property was not in accordance with the law.
(2) The taxpayer has entered into and is in compliance with an
installment payment agreement pursuant to Section 41127.5 to satisfy
the tax liability for which the levy was imposed, unless that or
another agreement allows for the levy.
(3) The return of the property will facilitate the collection of
the tax liability or will be in the best interest of the state and
the taxpayer.
(b) Property returned under paragraphs (1) and (2) of subdivision
(a) is subject to the provisions of Section 41174.
41173. Exemptions from levy under Chapter 4 (commencing with
Section 703.010) of Division 2 of Title 9 of Part 2 of the Code of
Civil Procedure shall be adjusted for purposes of enforcing the
collection of debts under this part to reflect changes in the
California Consumer Price Index whenever the change is more than 5
percent higher than any previous adjustment.
41174. (a) A taxpayer may file a claim with the board for
reimbursement of bank charges and any other reasonable third-party
check charge fees incurred by the taxpayer as the direct result of an
erroneous levy or notice to withhold by the board. Bank and
third-party charges include a financial institution's or third party'
s customary charge for complying with the levy or notice to withhold
instructions and reasonable charges for overdrafts that are a direct
consequence of the erroneous levy or notice to withhold. The charges
are those paid by the taxpayer and not waived for reimbursement by
the financial institution or third party. Each claimant applying for
reimbursement shall file a claim with the board that shall be in a
form as may be prescribed by the board. In order for the board to
grant a claim, the board shall determine that both of the following
conditions have been satisfied:
(1) The erroneous levy or notice to withhold was caused by board
error.
(2) Prior to the levy or notice to withhold, the taxpayer
responded to all contacts by the board and provided the board with
any requested information or documentation sufficient to establish
the taxpayer's position. This provision may be waived by the board
for reasonable cause.
(b) Claims pursuant to this section shall be filed within 90 days
from the date of the levy or notice to withhold. Within 30 days from
the date the claim is received, the board shall respond to the claim.
If the board denies the claim, the taxpayer shall be notified in
writing of the reason or reasons for the denial of the claim.
41175. (a) At least 30 days prior to the filing or recording of
liens under Chapter 14 (commencing with Section 7150) or Chapter 14.5
(commencing with Section 7220) of Division 7 of Title 1 of the
Government Code, the board shall mail to the taxpayer a preliminary
notice. The notice shall specify the statutory authority of the board
for filing or recording the lien, indicate the earliest date on
which the lien may be filed or recorded, and state the remedies
available to the taxpayer to prevent the filing or recording of the
lien. In the event tax liens are filed for the same liability in
multiple counties, only one preliminary notice shall be sent.
(b) If the board determines that filing a lien was in error, it
shall mail a release to the taxpayer and the entity recording the
lien as soon as possible, but no later than seven days, after this
determination and receipt of lien recording information. The release
shall contain a statement that the lien was filed in error. In the
event the erroneous lien is obstructing a lawful transaction, the
board shall immediately issue a release of lien to the taxpayer and
the entity recording the lien.
(c) When the board releases a lien erroneously filed, notice of
that fact shall be mailed to the taxpayer and, upon the request of
the taxpayer, a copy of the release shall be mailed to the major
credit reporting companies in the county where the lien was filed.
(d) The board may release or subordinate a lien if the board
determines that the release or subordination will facilitate the
collection of the tax liability or will be in the best interest of
the state and the taxpayer.
41176. (a) If any officer or employee of the board recklessly
disregards board-published procedures, a taxpayer aggrieved by that
action or omission may bring an action for damages against the State
of California in superior court.
(b) In any action brought under subdivision (a), upon finding of
liability on the part of the State of California, the state shall be
liable to the plaintiff in an amount equal to the sum of all of the
following:
(1) Actual and direct monetary damages sustained by the plaintiff
as a result of the actions or omissions.
(2) Reasonable litigation costs, including any of the following:
(A) Reasonable court costs.
(B) Prevailing market rates for the kind or quality of services
furnished in connection with any of the following:
(i) The reasonable expenses of expert witnesses in connection with
the civil proceeding, except that no expert witness shall be
compensated at a rate in excess of the highest rate of compensation
for expert witnesses paid by the State of California.
(ii) The reasonable cost of any study, analysis, engineering
report, test, or project that is found by the court to be necessary
for the preparation of the party's case.
(iii) Reasonable fees paid or incurred for the services of
attorneys in connection with the civil proceeding, except that those
fees shall not be in excess of seventy-five dollars ($75) per hour
unless the court determines that an increase in the cost of living or
a special factor, such as the limited availability of qualified
attorneys for the proceeding, justifies a higher rate.
(c) In the awarding of damages under subdivision (b), the court
shall take into consideration the negligence or omissions, if any, on
the part of the plaintiff that contributed to the damages.
(d) Whenever it appears to the court that the taxpayer's position
in the proceeding brought under subdivision (a) is frivolous, the
court may impose a penalty against the plaintiff in an amount not to
exceed ten thousand dollars ($10,000). A penalty so imposed shall be
paid upon notice and demand from the board and shall be collected as
a tax imposed under this part.
41160. The board shall administer this article. Unless the context
indicates otherwise, the provisions of this article shall apply to
this part.
41161. (a) The board shall establish the position of the Taxpayers'
Rights Advocate. The advocate or his or her designee shall be
responsible for facilitating resolution of taxpayer complaints and
problems, including any taxpayer complaints regarding unsatisfactory
treatment of taxpayers by board employees, and staying actions where
taxpayers have suffered or will suffer irreparable loss as the result
of those actions. Applicable statutes of limitation shall be tolled
during the pendency of a stay. Any penalties and interest that would
otherwise accrue shall not be affected by the granting of a stay.
(b) The advocate shall report directly to the executive officer of
the board.
41162. (a) The board shall develop and implement an education and
information program directed at, but not limited to, all of the
following groups:
(1) Taxpayers newly registered with the board.
(2) Board audit and compliance staff.
(b) The education and information program shall include all of the
following:
(1) A program of written communication with newly registered
taxpayers explaining in simplified terms their duties and
responsibilities.
(2) Participation in seminars and similar programs organized by
federal, state, and local agencies.
(3) Revision of taxpayer educational materials currently produced
by the board that explain the most common areas of taxpayer
nonconformance in simplified terms.
(4) Implementation of a continuing education program for audit and
compliance personnel to include the application of new legislation
to taxpayer activities and areas of recurrent taxpayer noncompliance
or inconsistency of administration.
(c) Electronic media used pursuant to this section shall not
represent the voice, picture, or name of members of the board or the
Controller.
41163. The board shall conduct an annual hearing before the full
board where industry representatives and individual taxpayers are
allowed to present their proposals on changes to the Emergency
Telephone Users Surcharge Law which may further improve voluntary
compliance and the relationship between taxpayers and government.
41164. The board shall prepare and publish brief but comprehensive
statements in simple and nontechnical language that explain
procedures, remedies, and the rights and obligations of the board and
taxpayers. As appropriate, statements shall be provided to taxpayers
with the initial notice of audit, the notice of proposed additional
taxes, any subsequent notice of tax due, or other substantive
notices. Additionally, the board shall include this language for
statements in the annual tax information bulletins that are mailed to
taxpayers.
41165. (a) The total amount of revenue collected or assessed
pursuant to this part shall not be used for any of the following:
(1) To evaluate individual officers or employees.
(2) To impose or suggest production quotas or goals, other than
quotas or goals with respect to accounts receivable.
(b) The board shall certify in its annual report submitted
pursuant to Section 15616 of the Government Code that revenue
collected or assessed is not used in a manner prohibited by
subdivision (a).
(c) Nothing in this section shall prohibit the setting of goals
and the evaluation of performance with respect to productivity and
the efficient use of time.
41166. The board shall develop and implement a program that will
evaluate an individual employee's or officer's performance with
respect to his or her contact with taxpayers. The development and
implementation of the program shall be coordinated with the Taxpayers'
Rights Advocate.
41167. The board shall, in cooperation with the Taxpayers' Rights
Advocate, and other interested taxpayer-oriented groups, develop a
plan to reduce the time required to resolve petitions for
redetermination and claims for refunds. The plan shall include
determination of standard timeframes and special review of cases
which take more time than the appropriate standard timeframe.
41168. Procedures of the board, relating to appeals staff review
conferences before a staff attorney or supervising tax auditor
independent of the assessing department, shall include all of the
following:
(a) Any conference shall be held at a reasonable time at a board
office that is convenient to the taxpayer.
(b) The conference may be recorded only if prior notice is given
to the taxpayer and the taxpayer is entitled to receive a copy of the
recording.
(c) The taxpayer shall be informed prior to any conference that he
or she has a right to have present at the conference his or her
attorney, accountant, or other designated agent.
41169. (a) Every taxpayer is entitled to be reimbursed for any
reasonable fees and expenses related to a hearing before the board if
all of the following conditions are met:
(1) The taxpayer files a claim for the fee and expenses with the
board within one year of the date the decision of the board becomes
final.
(2) The board, in its sole discretion, finds that the action taken
by the board staff was unreasonable.
(3) The board decides that the taxpayer be awarded a specific
amount of fees and expenses related to the hearing, in an amount
determined by the board in its sole discretion.
(b) To determine whether the board staff has been unreasonable,
the board shall consider whether the board staff has established that
its position was substantially justified.
(c) The amount of reimbursed fees and expenses shall be limited to
the following:
(1) Fees and expenses incurred after the date of the notice of
determination, jeopardy determination, or a claim for refund.
(2) If the board finds that the staff was unreasonable with
respect to certain issues but reasonable with respect to other
issues, the amount of reimbursed fees and expenses shall be limited
to those that relate to the issues where the staff was unreasonable.
(d) Any proposed award by the board pursuant to subdivision (a)
shall be available as a public record for at least 10 days prior to
the effective date of the award.
(e) The amendments to this section by the act adding this
subdivision shall be operative for claims filed on or after January
1, 2000.
41170. (a) An officer or employee of the board acting in connection
with any law administered by the board shall not knowingly
authorize, require, or conduct any investigation of, or surveillance
over, any person for nontax administration related purposes.
(b) Any person violating subdivision (a) shall be subject to
disciplinary action in accordance with the State Civil Service Act,
including dismissal from office or discharge from employment.
(c) This section shall not apply with respect to any otherwise
lawful investigation concerning organized crime activities.
(d) The provisions of this section are not intended to prohibit,
restrict, or prevent the exchange of information where the person is
being investigated for multiple violations which include emergency
telephone users surcharge violations.
(e) For the purposes of this section:
(1) "Investigation" means any oral or written inquiry directed to
any person, organization, or governmental agency.
(2) "Surveillance" means the monitoring of persons, places, or
events by means of electronic interception, overt or covert
observations, or photography, and the use of informants.
41171. (a) It is the intent of the Legislature that the State Board
of Equalization, its staff, and the Attorney General pursue
settlements as authorized under this section with respect to
surcharge matters in dispute that are the subject of protests,
appeals, or refund claims, consistent with a reasonable evaluation of
the costs and risks associated with litigation of these matters.
(b) (1) Except as provided in paragraph (3) and subject to
paragraph (2), the executive director or chief counsel, if authorized
by the executive director, of the board may recommend to the State
Board of Equalization, itself, a settlement of any surcharge matter
in dispute.
(2) No recommendation of settlement shall be submitted to the
board, itself, unless and until that recommendation has been
submitted by the executive director or chief counsel to the Attorney
General. Within 30 days of receiving that recommendation, the
Attorney General shall review the recommendation and advise, in
writing, the executive director or chief counsel of the board of his
or her conclusions as to whether the recommendation is reasonable
from an overall perspective. The executive director or chief counsel
shall, with each recommendation of settlement submitted to the board,
itself, also submit the Attorney General's written conclusions
obtained pursuant to this paragraph.
(3) A settlement of any civil surcharge matter in dispute
involving a reduction of surcharge or penalties in settlement, the
total of which reduction of surcharge and penalties in settlement
does not exceed five thousand dollars ($5,000), may be approved by
the executive director and chief counsel, jointly. The executive
director shall notify the board, itself, of any settlement approved
pursuant to this paragraph.
(c) Whenever a reduction of surcharge, or penalties, or total
surcharge and penalties in settlement in excess of five hundred
dollars ($500) is approved pursuant to this section, there shall be
placed on file, for at least one year, in the office of the executive
director of the board a public record with respect to that
settlement. The public record shall include all of the following
information:
(1) The name or names of the surcharge payers who are parties to
the settlement.
(2) The total amount in dispute.
(3) The amount agreed to pursuant to the settlement.
(4) A summary of the reasons why the settlement is in the best
interests of the State of California.
(5) For any settlement approved by the board, itself, the Attorney
General's conclusion as to whether the recommendation of settlement
was reasonable from an overall perspective.
The public record shall not include any information that relates
to any trade secret, patent, process, style of work, apparatus,
business secret, or organizational structure that, if disclosed,
would adversely affect the surcharge payer or the national defense.
(d) The members of the State Board of Equalization shall not
participate in the settlement of surcharge matters pursuant to this
section, except as provided in subdivision (e).
(e) (1) Any recommendation for settlement shall be approved or
disapproved by the board, itself, within 45 days of the submission of
that recommendation to the board. Any recommendation for settlement
that is not either approved or disapproved by the board, itself,
within 45 days of the submission of that recommendation shall be
deemed approved. Upon approval of a recommendation for settlement,
the matter shall be referred back to the executive director or chief
counsel in accordance with the decision of the board.
(2) Disapproval of a recommendation for settlement shall be made
only by a majority vote of the board. Where the board disapproves a
recommendation for settlement, the matter shall be remanded to board
staff for further negotiation, and may be resubmitted to the board,
in the same manner and subject to the same requirements as the
initial submission, at the discretion of the executive director or
chief counsel.
(f) All settlements entered into pursuant to this section shall be
final and nonappealable, except upon a showing of fraud or
misrepresentation with respect to a material fact.
(g) Any proceedings undertaken by the board itself pursuant to a
settlement as described in this section shall be conducted in a
closed session or sessions.
(h) This section shall apply only to surcharge matters in dispute
on or after the effective date of the act adding this subdivision.
(i) The Legislature finds that it is essential for fiscal purposes
that the settlement program authorized by this section be
expeditiously implemented. Accordingly, Chapter 3.5 (commencing with
Section 11340) of Part 1 of Division 3 of Title 2 of the Government
Code shall not apply to any determination, rule, notice, or guideline
established or issued by the board in implementing and administering
the settlement program authorized by this section.
41171.5. (a) (1) Beginning on January 1, 2007, the executive
director and chief counsel of the board, or their delegates, may
compromise any final surcharge liability where the reduction of
surcharges is seven thousand five hundred dollars ($7,500) or less.
(2) Except as provided in paragraph (3), the board, upon
recommendation by its executive director and chief counsel, jointly,
may compromise a final surcharge liability involving a reduction in
surcharges in excess of seven thousand five hundred dollars ($7,500).
Any recommendation for approval of an offer in compromise that is
not either approved or disapproved within 45 days of the submission
of the recommendation shall be deemed approved.
(3) The board, itself, may by resolution delegate to the executive
director and the chief counsel, jointly, the authority to compromise
a final surcharge liability in which the reduction of surcharges is
in excess of seven thousand five hundred dollars ($7,500), but less
than ten thousand dollars ($10,000).
(b) For purposes of this section, "a final surcharge liability"
means any final surcharge liability arising under Part 20 (commencing
with Section 41001), or related interest, additions to surcharges,
penalties, or other amounts assessed under this part.
(c) (1) Offers in compromise shall be considered only for
liabilities that were generated from a business that has been
discontinued or transferred, where the surcharge payer making the
offer no longer has a controlling interest or association with the
transferred business or has a controlling interest or association
with a similar type of business as the transferred or discontinued
business.
(2) Notwithstanding paragraph (1), a qualified final surcharge
liability may be compromised regardless of whether the business has
been discontinued or transferred or whether the surcharge payer has a
controlling interest or association with a similar type of business
as the transferred or discontinued business. All other provisions of
this section that apply to a final surcharge liability shall also
apply to a qualified final surcharge liability, and no compromise
shall be made under this subdivision unless all other requirements of
this section are met. For purposes of this subdivision, a "qualified
final surcharge liability" means either of the following:
(A) That part of a final surcharge liability, including related
interest, additions to surcharge, penalties, or other amounts
assessed under this part, arising from a transaction or transactions
in which the board finds no evidence that the service supplier
collected the surcharge from the service user or other person and
which was determined against the service supplier under Article 3
(commencing with Section 41070), Article 4 (commencing with Section
41080), or Article 5 (commencing with Section 41085) of Chapter 4.
(B) That part of a final surcharge liability, including related
interest, additions to surcharge, penalties, or other amounts
assessed under this part, determined under Article 3 (commencing with
Section 41070), Article 4 (commencing with Section 41080), and
Article 5 (commencing with Section 41085) of Chapter 4 against a
service user who is a consumer that is not required to register with
the board under Article 3 (commencing with section 41040) of Chapter
2.
(3) A qualified final surcharge liability may not be compromised
with any of the following:
(A) A surcharge payer who previously received a compromise under
paragraph (2) for a liability, or a part thereof, arising from a
transaction or transactions that are substantially similar to the
transaction or transactions attributable to the liability for which
the surcharge payer is making the offer.
(B) A business that was transferred by a surcharge payer who
previously received a compromise under paragraph (2) and who has a
controlling interest or association with the transferred business,
when the liability for which the offer is made is attributable to a
transaction or transactions substantially similar to the transaction
or transactions for which the surcharge payer's liability was
previously compromised.
(C) A business in which a surcharge payer who previously received
a compromise under paragraph (2) has a controlling interest or
association with a similar type of business for which the surcharge
payer received the compromise, when the liability of the business
making the offer arose from a transaction or transactions
substantially similar to the transaction or transactions for which
the surcharge payer's liability was previously compromised.
(d) The board may, in its discretion, enter into a written
agreement which permits the surcharge payer to pay the compromise in
installments for a period not exceeding one year. The agreement may
provide that such installments shall be paid by electronic funds
transfers or any other means to facilitate the payment of each
installment.
(e) Except for any recommendation for approval as specified in
subdivision (a), the members of the State Board of Equalization shall
not participate in any offer in compromise matters pursuant to this
section.
(f) A surcharge payer that has received a compromise under
paragraph (2) of subdivision (c) may be required to enter into any
collateral agreement that is deemed necessary for the protection of
the interests of the state. A collateral agreement may include a
provision that allows the board to reestablish the liability, or any
portion thereof, if the surcharge payer has sufficient annual income
during the succeeding five-year period. The board shall establish
criteria for determining "sufficient annual income" for purposes of
this subdivision.
(g) A surcharge payer that has received a compromise under
paragraph (2) of subdivision (c) shall file and pay by the due date
all subsequently required emergency telephone users surcharge returns
for a five-year period from the date the liability is compromised,
or until the surcharge payer is no longer required to file emergency
telephone users surcharge returns, whichever period is earlier.
(h) Offers in compromise shall not be considered where the
surcharge payer has been convicted of felony tax evasion under this
part during the liability period.
(i) For amounts to be compromised under this section, the
following conditions shall exist:
(1) The surcharge payer shall establish that:
(A) The amount offered in payment is the most that can be expected
to be paid or collected from the surcharge payer's present assets or
income.
(B) The surcharge payer does not have reasonable prospects of
acquiring increased income or assets that would enable the surcharge
payer to satisfy a greater amount of the liability than the amount
offered, within a reasonable period of time.
(2) The board shall have determined that acceptance of the
compromise is in the best interest of the state.
(j) A determination by the board that it would not be in the best
interest of the state to accept an offer in compromise in
satisfaction of a final surcharge liability shall not be subject to
administrative appeal or judicial review.
(k) (1) Offers for liabilities with a fraud or evasion penalty
shall require a minimum offer of the unpaid surcharge and fraud or
evasion penalty.
(2) The minimum offer may be waived if it can be shown that the
surcharge payer making the offer was not the person responsible for
perpetrating the fraud or evasion. This authorization to waive only
applies to partnership accounts where the intent to commit fraud or
evasion can be clearly attributed to a partner of the surcharge
payer.
(l) When an offer in compromise is either accepted or rejected, or
the terms and conditions of a compromise agreement are fulfilled,
the board shall notify the surcharge payer in writing. In the event
an offer is rejected, the amount posted will either be applied to the
liability or refunded, at the discretion of the surcharge payer.
(m) When more than one surcharge payer is liable for the debt,
such as with spouses or partnerships or other business combinations,
including, but not limited to, surcharge payers who are liable
through dual determination or successor's liability, the acceptance
of an offer in compromise from one liable surcharge payer shall
reduce the amount of the liability of the other surcharge payers by
the amount of the accepted offer.
(n) Whenever a compromise of surcharges or penalties or total
surcharges and penalties in excess of five hundred dollars ($500) is
approved, there shall be placed on file for at least one year in the
office of the executive director of the board a public record with
respect to that compromise. The public record shall include all of
the following information:
(1) The name of the surcharge payer.
(2) The amount of unpaid surcharges and related penalties,
additions to surcharges, interest, or other amounts involved.
(3) The amount offered.
(4) A summary of the reason why the compromise is in the best
interest of the state.
The public record shall not include any information that relates
to any trade secrets, patent, process, style of work, apparatus,
business secret, or organizational structure, that if disclosed,
would adversely affect the surcharge payer or violate the
confidentiality provisions of Section 41131. No list shall be
prepared and no releases distributed by the board in connection with
these statements.
(o) Any compromise made under this section may be rescinded, all
compromised liabilities may be reestablished, without regard to any
statute of limitations that otherwise may be applicable, and no
portion of the amount offered in compromise refunded, if either of
the following occurs:
(1) The board determines that any person did any of the following
acts regarding the making of the offer:
(A) Concealed from the board any property belonging to the estate
of any surcharge payer or other person liable for the surcharge.
(B) Received, withheld, destroyed, mutilated, or falsified any
book, document, or record or made any false statement, relating to
the estate or financial condition of the surcharge payer or other
person liable for the surcharge.
(2) The surcharge payer fails to comply with any of the terms and
conditions relative to the offer.
(p) Any person who, in connection with any offer or compromise
under this section, or offer of that compromise to enter into that
agreement, willfully does either of the following shall be guilty of
a felony and, upon conviction, shall be fined not more than fifty
thousand dollars ($50,000) or imprisoned in the state prison, or
both, together with the costs of investigation and prosecution:
(1) Conceals from any officer or employee of this state any
property belonging to the estate of a surcharge payer or other person
liable in respect of the surcharge.
(2) Receives, withholds, destroys, mutilates, or falsifies any
book, document, or record, or makes any false statement, relating to
the estate or financial condition of the surcharge payer or other
person liable in respect of the surcharge.
(q) For purposes of this section, "person" means the surcharge
payer, any member of the surcharge payer's family, any corporation,
agent, fiduciary, or representative of, or any other individual or
entity acting on behalf of, the surcharge payer, or any other
corporation or entity owned or controlled by the surcharge payer,
directly or indirectly, or that owns or controls the surcharge payer,
directly or indirectly.
(r) This section shall remain in effect only until January 1,
2013, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2013, deletes or extends
that date.
41171.5. (a) (1) The executive director and chief counsel of the
board, or their delegates, may compromise any final surcharge
liability where the reduction of surcharges is seven thousand five
hundred dollars ($7,500) or less.
(2) Except as provided in paragraph (3), the board, upon
recommendation by its executive director and chief counsel, jointly,
may compromise a final surcharge liability involving a reduction in
surcharges in excess of seven thousand five hundred dollars ($7,500).
Any recommendation for approval of an offer in compromise that is
not either approved or disapproved within 45 days of the submission
of the recommendation shall be deemed approved.
(3) The board, itself, may by resolution delegate to the executive
director and the chief counsel, jointly, the authority to compromise
a final surcharge liability in which the reduction of surcharges is
in excess of seven thousand five hundred dollars ($7,500), but less
than ten thousand dollars ($10,000).
(b) For purposes of this section, "a final surcharge liability"
means any final surcharge liability arising under Part 20 (commencing
with Section 41001), or related interest, additions to surcharges,
penalties, or other amounts assessed under this part.
(c) Offers in compromise shall be considered only for liabilities
that were generated from a business that has been discontinued or
transferred, where the surcharge payer making the offer no longer has
a controlling interest or association with the transferred business
or has a controlling interest or association with a similar type of
business as the transferred or discontinued business.
(d) Offers in compromise shall not be considered where the
surcharge payer has been convicted of felony tax evasion under this
part during the liability period.
(e) For amounts to be compromised under this section, the
following conditions shall exist:
(1) The surcharge payer shall establish that:
(A) The amount offered in payment is the most that can be expected
to be paid or collected from the surcharge payer's present assets or
income.
(B) The surcharge payer does not have reasonable prospects of
acquiring increased income or assets that would enable the surcharge
payer to satisfy a greater amount of the liability than the amount
offered, within a reasonable period of time.
(2) The board shall have determined that acceptance of the
compromise is in the best interest of the state.
(f) A determination by the board that it would not be in the best
interest of the state to accept an offer in compromise in
satisfaction of a final surcharge liability shall not be subject to
administrative appeal or judicial review.
(g) (1) Offers for liabilities with a fraud or evasion penalty
shall require a minimum offer of the unpaid surcharge and fraud or
evasion penalty.
(2) The minimum offer may be waived if it can be shown that the
surcharge payer making the offer was not the person responsible for
perpetrating the fraud or evasion. This authorization to waive only
applies to partnership accounts where the intent to commit fraud or
evasion can be clearly attributed to a partner of the surcharge
payer.
(h) When an offer in compromise is either accepted or rejected, or
the terms and conditions of a compromise agreement are fulfilled,
the board shall notify the surcharge payer in writing. In the event
an offer is rejected, the amount posted will either be applied to the
liability or refunded, at the discretion of the surcharge payer.
(i) When more than one surcharge payer is liable for the debt,
such as with spouses or partnerships or other business combinations,
including, but not limited to, surcharge payers who are liable
through dual determination or successor's liability, the acceptance
of an offer in compromise from one liable surcharge payer shall
reduce the amount of the liability of the other surcharge payers by
the amount of the accepted offer.
(j) Whenever a compromise of surcharges or penalties or total
surcharges and penalties in excess of five hundred dollars ($500) is
approved, there shall be placed on file for at least one year in the
office of the executive director of the board a public record with
respect to that compromise. The public record shall include all of
the following information:
(1) The name of the surcharge payer.
(2) The amount of unpaid surcharges and related penalties,
additions to surcharges, interest, or other amounts involved.
(3) The amount offered.
(4) A summary of the reason why the compromise is in the best
interest of the state.
The public record shall not include any information that relates
to any trade secrets, patent, process, style of work, apparatus,
business secret, or organizational structure, that if disclosed,
would adversely affect the surcharge payer or violate the
confidentiality provisions of Section 41131. No list shall be
prepared and no releases distributed by the board in connection with
these statements.
(k) Any compromise made under this section may be rescinded, all
compromised liabilities may be reestablished, without regard to any
statute of limitations that otherwise may be applicable, and no
portion of the amount offered in compromise refunded, if either of
the following occurs:
(1) The board determines that any person did any of the following
acts regarding the making of the offer:
(A) Concealed from the board any property belonging to the estate
of any surcharge payer or other person liable for the surcharge.
(B) Received, withheld, destroyed, mutilated, or falsified any
book, document, or record or made any false statement, relating to
the estate or financial condition of the surcharge payer or other
person liable for the surcharge.
(2) The surcharge payer fails to comply with any of the terms and
conditions relative to the offer.
(l) Any person who, in connection with any offer or compromise
under this section, or offer of that compromise to enter into that
agreement, willfully does either of the following shall be guilty of
a felony and, upon conviction, shall be fined not more than fifty
thousand dollars ($50,000) or imprisoned in the state prison, or
both, together with the costs of investigation and prosecution:
(1) Conceals from any officer or employee of this state any
property belonging to the estate of a surcharge payer or other person
liable in respect of the surcharge.
(2) Receives, withholds, destroys, mutilates, or falsifies any
book, document, or record, or makes any false statement, relating to
the estate or financial condition of the surcharge payer or other
person liable in respect of the surcharge.
(m) For purposes of this section, "person" means the surcharge
payer, any member of the surcharge payer's family, any corporation,
agent, fiduciary, or representative of, or any other individual or
entity acting on behalf of, the surcharge payer, or any other
corporation or entity owned or controlled by the surcharge payer,
directly or indirectly, or that owns or controls the surcharge payer,
directly or indirectly.
(n) This section shall become operative on January 1, 2013.
41172. (a) The board shall release any levy or notice to withhold
issued pursuant to this part on any property in the event that the
expense of the sale process exceeds the liability for which the levy
is made.
(b) The Taxpayers' Rights Advocate may order the release of any
levy or notice to withhold issued pursuant to this part or, within 90
days from the receipt of funds pursuant to a levy or notice to
withhold, order the return of any amount up to one thousand five
hundred dollars ($1,500) of moneys received, upon his or her finding
that the levy or notice to withhold threatens the health or welfare
of the taxpayer or his or her spouse and dependents or family.
(c) The board shall not sell any seized property until it has
first notified the taxpayer in writing of the exemptions from levy
under Chapter 4 (commencing with Section 703.010) of Division 2 of
Title 9 of Part 2 of the Code of Civil Procedure.
(d) This section shall not apply to the seizure of any property as
a result of a jeopardy assessment.
41172.5. (a) If any property has been levied upon, the property or
the proceeds from the sale of the property shall be returned to the
taxpayer if the board determines any one of the following:
(1) The levy on the property was not in accordance with the law.
(2) The taxpayer has entered into and is in compliance with an
installment payment agreement pursuant to Section 41127.5 to satisfy
the tax liability for which the levy was imposed, unless that or
another agreement allows for the levy.
(3) The return of the property will facilitate the collection of
the tax liability or will be in the best interest of the state and
the taxpayer.
(b) Property returned under paragraphs (1) and (2) of subdivision
(a) is subject to the provisions of Section 41174.
41173. Exemptions from levy under Chapter 4 (commencing with
Section 703.010) of Division 2 of Title 9 of Part 2 of the Code of
Civil Procedure shall be adjusted for purposes of enforcing the
collection of debts under this part to reflect changes in the
California Consumer Price Index whenever the change is more than 5
percent higher than any previous adjustment.
41174. (a) A taxpayer may file a claim with the board for
reimbursement of bank charges and any other reasonable third-party
check charge fees incurred by the taxpayer as the direct result of an
erroneous levy or notice to withhold by the board. Bank and
third-party charges include a financial institution's or third party'
s customary charge for complying with the levy or notice to withhold
instructions and reasonable charges for overdrafts that are a direct
consequence of the erroneous levy or notice to withhold. The charges
are those paid by the taxpayer and not waived for reimbursement by
the financial institution or third party. Each claimant applying for
reimbursement shall file a claim with the board that shall be in a
form as may be prescribed by the board. In order for the board to
grant a claim, the board shall determine that both of the following
conditions have been satisfied:
(1) The erroneous levy or notice to withhold was caused by board
error.
(2) Prior to the levy or notice to withhold, the taxpayer
responded to all contacts by the board and provided the board with
any requested information or documentation sufficient to establish
the taxpayer's position. This provision may be waived by the board
for reasonable cause.
(b) Claims pursuant to this section shall be filed within 90 days
from the date of the levy or notice to withhold. Within 30 days from
the date the claim is received, the board shall respond to the claim.
If the board denies the claim, the taxpayer shall be notified in
writing of the reason or reasons for the denial of the claim.
41175. (a) At least 30 days prior to the filing or recording of
liens under Chapter 14 (commencing with Section 7150) or Chapter 14.5
(commencing with Section 7220) of Division 7 of Title 1 of the
Government Code, the board shall mail to the taxpayer a preliminary
notice. The notice shall specify the statutory authority of the board
for filing or recording the lien, indicate the earliest date on
which the lien may be filed or recorded, and state the remedies
available to the taxpayer to prevent the filing or recording of the
lien. In the event tax liens are filed for the same liability in
multiple counties, only one preliminary notice shall be sent.
(b) If the board determines that filing a lien was in error, it
shall mail a release to the taxpayer and the entity recording the
lien as soon as possible, but no later than seven days, after this
determination and receipt of lien recording information. The release
shall contain a statement that the lien was filed in error. In the
event the erroneous lien is obstructing a lawful transaction, the
board shall immediately issue a release of lien to the taxpayer and
the entity recording the lien.
(c) When the board releases a lien erroneously filed, notice of
that fact shall be mailed to the taxpayer and, upon the request of
the taxpayer, a copy of the release shall be mailed to the major
credit reporting companies in the county where the lien was filed.
(d) The board may release or subordinate a lien if the board
determines that the release or subordination will facilitate the
collection of the tax liability or will be in the best interest of
the state and the taxpayer.
41176. (a) If any officer or employee of the board recklessly
disregards board-published procedures, a taxpayer aggrieved by that
action or omission may bring an action for damages against the State
of California in superior court.
(b) In any action brought under subdivision (a), upon finding of
liability on the part of the State of California, the state shall be
liable to the plaintiff in an amount equal to the sum of all of the
following:
(1) Actual and direct monetary damages sustained by the plaintiff
as a result of the actions or omissions.
(2) Reasonable litigation costs, including any of the following:
(A) Reasonable court costs.
(B) Prevailing market rates for the kind or quality of services
furnished in connection with any of the following:
(i) The reasonable expenses of expert witnesses in connection with
the civil proceeding, except that no expert witness shall be
compensated at a rate in excess of the highest rate of compensation
for expert witnesses paid by the State of California.
(ii) The reasonable cost of any study, analysis, engineering
report, test, or project that is found by the court to be necessary
for the preparation of the party's case.
(iii) Reasonable fees paid or incurred for the services of
attorneys in connection with the civil proceeding, except that those
fees shall not be in excess of seventy-five dollars ($75) per hour
unless the court determines that an increase in the cost of living or
a special factor, such as the limited availability of qualified
attorneys for the proceeding, justifies a higher rate.
(c) In the awarding of damages under subdivision (b), the court
shall take into consideration the negligence or omissions, if any, on
the part of the plaintiff that contributed to the damages.
(d) Whenever it appears to the court that the taxpayer's position
in the proceeding brought under subdivision (a) is frivolous, the
court may impose a penalty against the plaintiff in an amount not to
exceed ten thousand dollars ($10,000). A penalty so imposed shall be
paid upon notice and demand from the board and shall be collected as
a tax imposed under this part.
41160. The board shall administer this article. Unless the context
indicates otherwise, the provisions of this article shall apply to
this part.
41161. (a) The board shall establish the position of the Taxpayers'
Rights Advocate. The advocate or his or her designee shall be
responsible for facilitating resolution of taxpayer complaints and
problems, including any taxpayer complaints regarding unsatisfactory
treatment of taxpayers by board employees, and staying actions where
taxpayers have suffered or will suffer irreparable loss as the result
of those actions. Applicable statutes of limitation shall be tolled
during the pendency of a stay. Any penalties and interest that would
otherwise accrue shall not be affected by the granting of a stay.
(b) The advocate shall report directly to the executive officer of
the board.
41162. (a) The board shall develop and implement an education and
information program directed at, but not limited to, all of the
following groups:
(1) Taxpayers newly registered with the board.
(2) Board audit and compliance staff.
(b) The education and information program shall include all of the
following:
(1) A program of written communication with newly registered
taxpayers explaining in simplified terms their duties and
responsibilities.
(2) Participation in seminars and similar programs organized by
federal, state, and local agencies.
(3) Revision of taxpayer educational materials currently produced
by the board that explain the most common areas of taxpayer
nonconformance in simplified terms.
(4) Implementation of a continuing education program for audit and
compliance personnel to include the application of new legislation
to taxpayer activities and areas of recurrent taxpayer noncompliance
or inconsistency of administration.
(c) Electronic media used pursuant to this section shall not
represent the voice, picture, or name of members of the board or the
Controller.
41163. The board shall conduct an annual hearing before the full
board where industry representatives and individual taxpayers are
allowed to present their proposals on changes to the Emergency
Telephone Users Surcharge Law which may further improve voluntary
compliance and the relationship between taxpayers and government.
41164. The board shall prepare and publish brief but comprehensive
statements in simple and nontechnical language that explain
procedures, remedies, and the rights and obligations of the board and
taxpayers. As appropriate, statements shall be provided to taxpayers
with the initial notice of audit, the notice of proposed additional
taxes, any subsequent notice of tax due, or other substantive
notices. Additionally, the board shall include this language for
statements in the annual tax information bulletins that are mailed to
taxpayers.
41165. (a) The total amount of revenue collected or assessed
pursuant to this part shall not be used for any of the following:
(1) To evaluate individual officers or employees.
(2) To impose or suggest production quotas or goals, other than
quotas or goals with respect to accounts receivable.
(b) The board shall certify in its annual report submitted
pursuant to Section 15616 of the Government Code that revenue
collected or assessed is not used in a manner prohibited by
subdivision (a).
(c) Nothing in this section shall prohibit the setting of goals
and the evaluation of performance with respect to productivity and
the efficient use of time.
41166. The board shall develop and implement a program that will
evaluate an individual employee's or officer's performance with
respect to his or her contact with taxpayers. The development and
implementation of the program shall be coordinated with the Taxpayers'
Rights Advocate.
41167. The board shall, in cooperation with the Taxpayers' Rights
Advocate, and other interested taxpayer-oriented groups, develop a
plan to reduce the time required to resolve petitions for
redetermination and claims for refunds. The plan shall include
determination of standard timeframes and special review of cases
which take more time than the appropriate standard timeframe.
41168. Procedures of the board, relating to appeals staff review
conferences before a staff attorney or supervising tax auditor
independent of the assessing department, shall include all of the
following:
(a) Any conference shall be held at a reasonable time at a board
office that is convenient to the taxpayer.
(b) The conference may be recorded only if prior notice is given
to the taxpayer and the taxpayer is entitled to receive a copy of the
recording.
(c) The taxpayer shall be informed prior to any conference that he
or she has a right to have present at the conference his or her
attorney, accountant, or other designated agent.
41169. (a) Every taxpayer is entitled to be reimbursed for any
reasonable fees and expenses related to a hearing before the board if
all of the following conditions are met:
(1) The taxpayer files a claim for the fee and expenses with the
board within one year of the date the decision of the board becomes
final.
(2) The board, in its sole discretion, finds that the action taken
by the board staff was unreasonable.
(3) The board decides that the taxpayer be awarded a specific
amount of fees and expenses related to the hearing, in an amount
determined by the board in its sole discretion.
(b) To determine whether the board staff has been unreasonable,
the board shall consider whether the board staff has established that
its position was substantially justified.
(c) The amount of reimbursed fees and expenses shall be limited to
the following:
(1) Fees and expenses incurred after the date of the notice of
determination, jeopardy determination, or a claim for refund.
(2) If the board finds that the staff was unreasonable with
respect to certain issues but reasonable with respect to other
issues, the amount of reimbursed fees and expenses shall be limited
to those that relate to the issues where the staff was unreasonable.
(d) Any proposed award by the board pursuant to subdivision (a)
shall be available as a public record for at least 10 days prior to
the effective date of the award.
(e) The amendments to this section by the act adding this
subdivision shall be operative for claims filed on or after January
1, 2000.
41170. (a) An officer or employee of the board acting in connection
with any law administered by the board shall not knowingly
authorize, require, or conduct any investigation of, or surveillance
over, any person for nontax administration related purposes.
(b) Any person violating subdivision (a) shall be subject to
disciplinary action in accordance with the State Civil Service Act,
including dismissal from office or discharge from employment.
(c) This section shall not apply with respect to any otherwise
lawful investigation concerning organized crime activities.
(d) The provisions of this section are not intended to prohibit,
restrict, or prevent the exchange of information where the person is
being investigated for multiple violations which include emergency
telephone users surcharge violations.
(e) For the purposes of this section:
(1) "Investigation" means any oral or written inquiry directed to
any person, organization, or governmental agency.
(2) "Surveillance" means the monitoring of persons, places, or
events by means of electronic interception, overt or covert
observations, or photography, and the use of informants.
41171. (a) It is the intent of the Legislature that the State Board
of Equalization, its staff, and the Attorney General pursue
settlements as authorized under this section with respect to
surcharge matters in dispute that are the subject of protests,
appeals, or refund claims, consistent with a reasonable evaluation of
the costs and risks associated with litigation of these matters.
(b) (1) Except as provided in paragraph (3) and subject to
paragraph (2), the executive director or chief counsel, if authorized
by the executive director, of the board may recommend to the State
Board of Equalization, itself, a settlement of any surcharge matter
in dispute.
(2) No recommendation of settlement shall be submitted to the
board, itself, unless and until that recommendation has been
submitted by the executive director or chief counsel to the Attorney
General. Within 30 days of receiving that recommendation, the
Attorney General shall review the recommendation and advise, in
writing, the executive director or chief counsel of the board of his
or her conclusions as to whether the recommendation is reasonable
from an overall perspective. The executive director or chief counsel
shall, with each recommendation of settlement submitted to the board,
itself, also submit the Attorney General's written conclusions
obtained pursuant to this paragraph.
(3) A settlement of any civil surcharge matter in dispute
involving a reduction of surcharge or penalties in settlement, the
total of which reduction of surcharge and penalties in settlement
does not exceed five thousand dollars ($5,000), may be approved by
the executive director and chief counsel, jointly. The executive
director shall notify the board, itself, of any settlement approved
pursuant to this paragraph.
(c) Whenever a reduction of surcharge, or penalties, or total
surcharge and penalties in settlement in excess of five hundred
dollars ($500) is approved pursuant to this section, there shall be
placed on file, for at least one year, in the office of the executive
director of the board a public record with respect to that
settlement. The public record shall include all of the following
information:
(1) The name or names of the surcharge payers who are parties to
the settlement.
(2) The total amount in dispute.
(3) The amount agreed to pursuant to the settlement.
(4) A summary of the reasons why the settlement is in the best
interests of the State of California.
(5) For any settlement approved by the board, itself, the Attorney
General's conclusion as to whether the recommendation of settlement
was reasonable from an overall perspective.
The public record shall not include any information that relates
to any trade secret, patent, process, style of work, apparatus,
business secret, or organizational structure that, if disclosed,
would adversely affect the surcharge payer or the national defense.
(d) The members of the State Board of Equalization shall not
participate in the settlement of surcharge matters pursuant to this
section, except as provided in subdivision (e).
(e) (1) Any recommendation for settlement shall be approved or
disapproved by the board, itself, within 45 days of the submission of
that recommendation to the board. Any recommendation for settlement
that is not either approved or disapproved by the board, itself,
within 45 days of the submission of that recommendation shall be
deemed approved. Upon approval of a recommendation for settlement,
the matter shall be referred back to the executive director or chief
counsel in accordance with the decision of the board.
(2) Disapproval of a recommendation for settlement shall be made
only by a majority vote of the board. Where the board disapproves a
recommendation for settlement, the matter shall be remanded to board
staff for further negotiation, and may be resubmitted to the board,
in the same manner and subject to the same requirements as the
initial submission, at the discretion of the executive director or
chief counsel.
(f) All settlements entered into pursuant to this section shall be
final and nonappealable, except upon a showing of fraud or
misrepresentation with respect to a material fact.
(g) Any proceedings undertaken by the board itself pursuant to a
settlement as described in this section shall be conducted in a
closed session or sessions.
(h) This section shall apply only to surcharge matters in dispute
on or after the effective date of the act adding this subdivision.
(i) The Legislature finds that it is essential for fiscal purposes
that the settlement program authorized by this section be
expeditiously implemented. Accordingly, Chapter 3.5 (commencing with
Section 11340) of Part 1 of Division 3 of Title 2 of the Government
Code shall not apply to any determination, rule, notice, or guideline
established or issued by the board in implementing and administering
the settlement program authorized by this section.
41171.5. (a) (1) Beginning on January 1, 2007, the executive
director and chief counsel of the board, or their delegates, may
compromise any final surcharge liability where the reduction of
surcharges is seven thousand five hundred dollars ($7,500) or less.
(2) Except as provided in paragraph (3), the board, upon
recommendation by its executive director and chief counsel, jointly,
may compromise a final surcharge liability involving a reduction in
surcharges in excess of seven thousand five hundred dollars ($7,500).
Any recommendation for approval of an offer in compromise that is
not either approved or disapproved within 45 days of the submission
of the recommendation shall be deemed approved.
(3) The board, itself, may by resolution delegate to the executive
director and the chief counsel, jointly, the authority to compromise
a final surcharge liability in which the reduction of surcharges is
in excess of seven thousand five hundred dollars ($7,500), but less
than ten thousand dollars ($10,000).
(b) For purposes of this section, "a final surcharge liability"
means any final surcharge liability arising under Part 20 (commencing
with Section 41001), or related interest, additions to surcharges,
penalties, or other amounts assessed under this part.
(c) (1) Offers in compromise shall be considered only for
liabilities that were generated from a business that has been
discontinued or transferred, where the surcharge payer making the
offer no longer has a controlling interest or association with the
transferred business or has a controlling interest or association
with a similar type of business as the transferred or discontinued
business.
(2) Notwithstanding paragraph (1), a qualified final surcharge
liability may be compromised regardless of whether the business has
been discontinued or transferred or whether the surcharge payer has a
controlling interest or association with a similar type of business
as the transferred or discontinued business. All other provisions of
this section that apply to a final surcharge liability shall also
apply to a qualified final surcharge liability, and no compromise
shall be made under this subdivision unless all other requirements of
this section are met. For purposes of this subdivision, a "qualified
final surcharge liability" means either of the following:
(A) That part of a final surcharge liability, including related
interest, additions to surcharge, penalties, or other amounts
assessed under this part, arising from a transaction or transactions
in which the board finds no evidence that the service supplier
collected the surcharge from the service user or other person and
which was determined against the service supplier under Article 3
(commencing with Section 41070), Article 4 (commencing with Section
41080), or Article 5 (commencing with Section 41085) of Chapter 4.
(B) That part of a final surcharge liability, including related
interest, additions to surcharge, penalties, or other amounts
assessed under this part, determined under Article 3 (commencing with
Section 41070), Article 4 (commencing with Section 41080), and
Article 5 (commencing with Section 41085) of Chapter 4 against a
service user who is a consumer that is not required to register with
the board under Article 3 (commencing with section 41040) of Chapter
2.
(3) A qualified final surcharge liability may not be compromised
with any of the following:
(A) A surcharge payer who previously received a compromise under
paragraph (2) for a liability, or a part thereof, arising from a
transaction or transactions that are substantially similar to the
transaction or transactions attributable to the liability for which
the surcharge payer is making the offer.
(B) A business that was transferred by a surcharge payer who
previously received a compromise under paragraph (2) and who has a
controlling interest or association with the transferred business,
when the liability for which the offer is made is attributable to a
transaction or transactions substantially similar to the transaction
or transactions for which the surcharge payer's liability was
previously compromised.
(C) A business in which a surcharge payer who previously received
a compromise under paragraph (2) has a controlling interest or
association with a similar type of business for which the surcharge
payer received the compromise, when the liability of the business
making the offer arose from a transaction or transactions
substantially similar to the transaction or transactions for which
the surcharge payer's liability was previously compromised.
(d) The board may, in its discretion, enter into a written
agreement which permits the surcharge payer to pay the compromise in
installments for a period not exceeding one year. The agreement may
provide that such installments shall be paid by electronic funds
transfers or any other means to facilitate the payment of each
installment.
(e) Except for any recommendation for approval as specified in
subdivision (a), the members of the State Board of Equalization shall
not participate in any offer in compromise matters pursuant to this
section.
(f) A surcharge payer that has received a compromise under
paragraph (2) of subdivision (c) may be required to enter into any
collateral agreement that is deemed necessary for the protection of
the interests of the state. A collateral agreement may include a
provision that allows the board to reestablish the liability, or any
portion thereof, if the surcharge payer has sufficient annual income
during the succeeding five-year period. The board shall establish
criteria for determining "sufficient annual income" for purposes of
this subdivision.
(g) A surcharge payer that has received a compromise under
paragraph (2) of subdivision (c) shall file and pay by the due date
all subsequently required emergency telephone users surcharge returns
for a five-year period from the date the liability is compromised,
or until the surcharge payer is no longer required to file emergency
telephone users surcharge returns, whichever period is earlier.
(h) Offers in compromise shall not be considered where the
surcharge payer has been convicted of felony tax evasion under this
part during the liability period.
(i) For amounts to be compromised under this section, the
following conditions shall exist:
(1) The surcharge payer shall establish that:
(A) The amount offered in payment is the most that can be expected
to be paid or collected from the surcharge payer's present assets or
income.
(B) The surcharge payer does not have reasonable prospects of
acquiring increased income or assets that would enable the surcharge
payer to satisfy a greater amount of the liability than the amount
offered, within a reasonable period of time.
(2) The board shall have determined that acceptance of the
compromise is in the best interest of the state.
(j) A determination by the board that it would not be in the best
interest of the state to accept an offer in compromise in
satisfaction of a final surcharge liability shall not be subject to
administrative appeal or judicial review.
(k) (1) Offers for liabilities with a fraud or evasion penalty
shall require a minimum offer of the unpaid surcharge and fraud or
evasion penalty.
(2) The minimum offer may be waived if it can be shown that the
surcharge payer making the offer was not the person responsible for
perpetrating the fraud or evasion. This authorization to waive only
applies to partnership accounts where the intent to commit fraud or
evasion can be clearly attributed to a partner of the surcharge
payer.
(l) When an offer in compromise is either accepted or rejected, or
the terms and conditions of a compromise agreement are fulfilled,
the board shall notify the surcharge payer in writing. In the event
an offer is rejected, the amount posted will either be applied to the
liability or refunded, at the discretion of the surcharge payer.
(m) When more than one surcharge payer is liable for the debt,
such as with spouses or partnerships or other business combinations,
including, but not limited to, surcharge payers who are liable
through dual determination or successor's liability, the acceptance
of an offer in compromise from one liable surcharge payer shall
reduce the amount of the liability of the other surcharge payers by
the amount of the accepted offer.
(n) Whenever a compromise of surcharges or penalties or total
surcharges and penalties in excess of five hundred dollars ($500) is
approved, there shall be placed on file for at least one year in the
office of the executive director of the board a public record with
respect to that compromise. The public record shall include all of
the following information:
(1) The name of the surcharge payer.
(2) The amount of unpaid surcharges and related penalties,
additions to surcharges, interest, or other amounts involved.
(3) The amount offered.
(4) A summary of the reason why the compromise is in the best
interest of the state.
The public record shall not include any information that relates
to any trade secrets, patent, process, style of work, apparatus,
business secret, or organizational structure, that if disclosed,
would adversely affect the surcharge payer or violate the
confidentiality provisions of Section 41131. No list shall be
prepared and no releases distributed by the board in connection with
these statements.
(o) Any compromise made under this section may be rescinded, all
compromised liabilities may be reestablished, without regard to any
statute of limitations that otherwise may be applicable, and no
portion of the amount offered in compromise refunded, if either of
the following occurs:
(1) The board determines that any person did any of the following
acts regarding the making of the offer:
(A) Concealed from the board any property belonging to the estate
of any surcharge payer or other person liable for the surcharge.
(B) Received, withheld, destroyed, mutilated, or falsified any
book, document, or record or made any false statement, relating to
the estate or financial condition of the surcharge payer or other
person liable for the surcharge.
(2) The surcharge payer fails to comply with any of the terms and
conditions relative to the offer.
(p) Any person who, in connection with any offer or compromise
under this section, or offer of that compromise to enter into that
agreement, willfully does either of the following shall be guilty of
a felony and, upon conviction, shall be fined not more than fifty
thousand dollars ($50,000) or imprisoned in the state prison, or
both, together with the costs of investigation and prosecution:
(1) Conceals from any officer or employee of this state any
property belonging to the estate of a surcharge payer or other person
liable in respect of the surcharge.
(2) Receives, withholds, destroys, mutilates, or falsifies any
book, document, or record, or makes any false statement, relating to
the estate or financial condition of the surcharge payer or other
person liable in respect of the surcharge.
(q) For purposes of this section, "person" means the surcharge
payer, any member of the surcharge payer's family, any corporation,
agent, fiduciary, or representative of, or any other individual or
entity acting on behalf of, the surcharge payer, or any other
corporation or entity owned or controlled by the surcharge payer,
directly or indirectly, or that owns or controls the surcharge payer,
directly or indirectly.
(r) This section shall remain in effect only until January 1,
2013, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2013, deletes or extends
that date.
41171.5. (a) (1) The executive director and chief counsel of the
board, or their delegates, may compromise any final surcharge
liability where the reduction of surcharges is seven thousand five
hundred dollars ($7,500) or less.
(2) Except as provided in paragraph (3), the board, upon
recommendation by its executive director and chief counsel, jointly,
may compromise a final surcharge liability involving a reduction in
surcharges in excess of seven thousand five hundred dollars ($7,500).
Any recommendation for approval of an offer in compromise that is
not either approved or disapproved within 45 days of the submission
of the recommendation shall be deemed approved.
(3) The board, itself, may by resolution delegate to the executive
director and the chief counsel, jointly, the authority to compromise
a final surcharge liability in which the reduction of surcharges is
in excess of seven thousand five hundred dollars ($7,500), but less
than ten thousand dollars ($10,000).
(b) For purposes of this section, "a final surcharge liability"
means any final surcharge liability arising under Part 20 (commencing
with Section 41001), or related interest, additions to surcharges,
penalties, or other amounts assessed under this part.
(c) Offers in compromise shall be considered only for liabilities
that were generated from a business that has been discontinued or
transferred, where the surcharge payer making the offer no longer has
a controlling interest or association with the transferred business
or has a controlling interest or association with a similar type of
business as the transferred or discontinued business.
(d) Offers in compromise shall not be considered where the
surcharge payer has been convicted of felony tax evasion under this
part during the liability period.
(e) For amounts to be compromised under this section, the
following conditions shall exist:
(1) The surcharge payer shall establish that:
(A) The amount offered in payment is the most that can be expected
to be paid or collected from the surcharge payer's present assets or
income.
(B) The surcharge payer does not have reasonable prospects of
acquiring increased income or assets that would enable the surcharge
payer to satisfy a greater amount of the liability than the amount
offered, within a reasonable period of time.
(2) The board shall have determined that acceptance of the
compromise is in the best interest of the state.
(f) A determination by the board that it would not be in the best
interest of the state to accept an offer in compromise in
satisfaction of a final surcharge liability shall not be subject to
administrative appeal or judicial review.
(g) (1) Offers for liabilities with a fraud or evasion penalty
shall require a minimum offer of the unpaid surcharge and fraud or
evasion penalty.
(2) The minimum offer may be waived if it can be shown that the
surcharge payer making the offer was not the person responsible for
perpetrating the fraud or evasion. This authorization to waive only
applies to partnership accounts where the intent to commit fraud or
evasion can be clearly attributed to a partner of the surcharge
payer.
(h) When an offer in compromise is either accepted or rejected, or
the terms and conditions of a compromise agreement are fulfilled,
the board shall notify the surcharge payer in writing. In the event
an offer is rejected, the amount posted will either be applied to the
liability or refunded, at the discretion of the surcharge payer.
(i) When more than one surcharge payer is liable for the debt,
such as with spouses or partnerships or other business combinations,
including, but not limited to, surcharge payers who are liable
through dual determination or successor's liability, the acceptance
of an offer in compromise from one liable surcharge payer shall
reduce the amount of the liability of the other surcharge payers by
the amount of the accepted offer.
(j) Whenever a compromise of surcharges or penalties or total
surcharges and penalties in excess of five hundred dollars ($500) is
approved, there shall be placed on file for at least one year in the
office of the executive director of the board a public record with
respect to that compromise. The public record shall include all of
the following information:
(1) The name of the surcharge payer.
(2) The amount of unpaid surcharges and related penalties,
additions to surcharges, interest, or other amounts involved.
(3) The amount offered.
(4) A summary of the reason why the compromise is in the best
interest of the state.
The public record shall not include any information that relates
to any trade secrets, patent, process, style of work, apparatus,
business secret, or organizational structure, that if disclosed,
would adversely affect the surcharge payer or violate the
confidentiality provisions of Section 41131. No list shall be
prepared and no releases distributed by the board in connection with
these statements.
(k) Any compromise made under this section may be rescinded, all
compromised liabilities may be reestablished, without regard to any
statute of limitations that otherwise may be applicable, and no
portion of the amount offered in compromise refunded, if either of
the following occurs:
(1) The board determines that any person did any of the following
acts regarding the making of the offer:
(A) Concealed from the board any property belonging to the estate
of any surcharge payer or other person liable for the surcharge.
(B) Received, withheld, destroyed, mutilated, or falsified any
book, document, or record or made any false statement, relating to
the estate or financial condition of the surcharge payer or other
person liable for the surcharge.
(2) The surcharge payer fails to comply with any of the terms and
conditions relative to the offer.
(l) Any person who, in connection with any offer or compromise
under this section, or offer of that compromise to enter into that
agreement, willfully does either of the following shall be guilty of
a felony and, upon conviction, shall be fined not more than fifty
thousand dollars ($50,000) or imprisoned in the state prison, or
both, together with the costs of investigation and prosecution:
(1) Conceals from any officer or employee of this state any
property belonging to the estate of a surcharge payer or other person
liable in respect of the surcharge.
(2) Receives, withholds, destroys, mutilates, or falsifies any
book, document, or record, or makes any false statement, relating to
the estate or financial condition of the surcharge payer or other
person liable in respect of the surcharge.
(m) For purposes of this section, "person" means the surcharge
payer, any member of the surcharge payer's family, any corporation,
agent, fiduciary, or representative of, or any other individual or
entity acting on behalf of, the surcharge payer, or any other
corporation or entity owned or controlled by the surcharge payer,
directly or indirectly, or that owns or controls the surcharge payer,
directly or indirectly.
(n) This section shall become operative on January 1, 2013.
41172. (a) The board shall release any levy or notice to withhold
issued pursuant to this part on any property in the event that the
expense of the sale process exceeds the liability for which the levy
is made.
(b) The Taxpayers' Rights Advocate may order the release of any
levy or notice to withhold issued pursuant to this part or, within 90
days from the receipt of funds pursuant to a levy or notice to
withhold, order the return of any amount up to one thousand five
hundred dollars ($1,500) of moneys received, upon his or her finding
that the levy or notice to withhold threatens the health or welfare
of the taxpayer or his or her spouse and dependents or family.
(c) The board shall not sell any seized property until it has
first notified the taxpayer in writing of the exemptions from levy
under Chapter 4 (commencing with Section 703.010) of Division 2 of
Title 9 of Part 2 of the Code of Civil Procedure.
(d) This section shall not apply to the seizure of any property as
a result of a jeopardy assessment.
41172.5. (a) If any property has been levied upon, the property or
the proceeds from the sale of the property shall be returned to the
taxpayer if the board determines any one of the following:
(1) The levy on the property was not in accordance with the law.
(2) The taxpayer has entered into and is in compliance with an
installment payment agreement pursuant to Section 41127.5 to satisfy
the tax liability for which the levy was imposed, unless that or
another agreement allows for the levy.
(3) The return of the property will facilitate the collection of
the tax liability or will be in the best interest of the state and
the taxpayer.
(b) Property returned under paragraphs (1) and (2) of subdivision
(a) is subject to the provisions of Section 41174.
41173. Exemptions from levy under Chapter 4 (commencing with
Section 703.010) of Division 2 of Title 9 of Part 2 of the Code of
Civil Procedure shall be adjusted for purposes of enforcing the
collection of debts under this part to reflect changes in the
California Consumer Price Index whenever the change is more than 5
percent higher than any previous adjustment.
41174. (a) A taxpayer may file a claim with the board for
reimbursement of bank charges and any other reasonable third-party
check charge fees incurred by the taxpayer as the direct result of an
erroneous levy or notice to withhold by the board. Bank and
third-party charges include a financial institution's or third party'
s customary charge for complying with the levy or notice to withhold
instructions and reasonable charges for overdrafts that are a direct
consequence of the erroneous levy or notice to withhold. The charges
are those paid by the taxpayer and not waived for reimbursement by
the financial institution or third party. Each claimant applying for
reimbursement shall file a claim with the board that shall be in a
form as may be prescribed by the board. In order for the board to
grant a claim, the board shall determine that both of the following
conditions have been satisfied:
(1) The erroneous levy or notice to withhold was caused by board
error.
(2) Prior to the levy or notice to withhold, the taxpayer
responded to all contacts by the board and provided the board with
any requested information or documentation sufficient to establish
the taxpayer's position. This provision may be waived by the board
for reasonable cause.
(b) Claims pursuant to this section shall be filed within 90 days
from the date of the levy or notice to withhold. Within 30 days from
the date the claim is received, the board shall respond to the claim.
If the board denies the claim, the taxpayer shall be notified in
writing of the reason or reasons for the denial of the claim.
41175. (a) At least 30 days prior to the filing or recording of
liens under Chapter 14 (commencing with Section 7150) or Chapter 14.5
(commencing with Section 7220) of Division 7 of Title 1 of the
Government Code, the board shall mail to the taxpayer a preliminary
notice. The notice shall specify the statutory authority of the board
for filing or recording the lien, indicate the earliest date on
which the lien may be filed or recorded, and state the remedies
available to the taxpayer to prevent the filing or recording of the
lien. In the event tax liens are filed for the same liability in
multiple counties, only one preliminary notice shall be sent.
(b) If the board determines that filing a lien was in error, it
shall mail a release to the taxpayer and the entity recording the
lien as soon as possible, but no later than seven days, after this
determination and receipt of lien recording information. The release
shall contain a statement that the lien was filed in error. In the
event the erroneous lien is obstructing a lawful transaction, the
board shall immediately issue a release of lien to the taxpayer and
the entity recording the lien.
(c) When the board releases a lien erroneously filed, notice of
that fact shall be mailed to the taxpayer and, upon the request of
the taxpayer, a copy of the release shall be mailed to the major
credit reporting companies in the county where the lien was filed.
(d) The board may release or subordinate a lien if the board
determines that the release or subordination will facilitate the
collection of the tax liability or will be in the best interest of
the state and the taxpayer.
41176. (a) If any officer or employee of the board recklessly
disregards board-published procedures, a taxpayer aggrieved by that
action or omission may bring an action for damages against the State
of California in superior court.
(b) In any action brought under subdivision (a), upon finding of
liability on the part of the State of California, the state shall be
liable to the plaintiff in an amount equal to the sum of all of the
following:
(1) Actual and direct monetary damages sustained by the plaintiff
as a result of the actions or omissions.
(2) Reasonable litigation costs, including any of the following:
(A) Reasonable court costs.
(B) Prevailing market rates for the kind or quality of services
furnished in connection with any of the following:
(i) The reasonable expenses of expert witnesses in connection with
the civil proceeding, except that no expert witness shall be
compensated at a rate in excess of the highest rate of compensation
for expert witnesses paid by the State of California.
(ii) The reasonable cost of any study, analysis, engineering
report, test, or project that is found by the court to be necessary
for the preparation of the party's case.
(iii) Reasonable fees paid or incurred for the services of
attorneys in connection with the civil proceeding, except that those
fees shall not be in excess of seventy-five dollars ($75) per hour
unless the court determines that an increase in the cost of living or
a special factor, such as the limited availability of qualified
attorneys for the proceeding, justifies a higher rate.
(c) In the awarding of damages under subdivision (b), the court
shall take into consideration the negligence or omissions, if any, on
the part of the plaintiff that contributed to the damages.
(d) Whenever it appears to the court that the taxpayer's position
in the proceeding brought under subdivision (a) is frivolous, the
court may impose a penalty against the plaintiff in an amount not to
exceed ten thousand dollars ($10,000). A penalty so imposed shall be
paid upon notice and demand from the board and shall be collected as
a tax imposed under this part.
