Senate Bill 0322c1
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Florida Senate - 1998 CS for SB 322
By the Committee on Commerce and Economic Opportunities and
Senator Ostalkiewicz
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1 A bill to be entitled
2 An act relating to taxation; amending s.
3 95.091, F.S.; revising certain statutes of
4 limitation; eliminating the tolling of the
5 statute of limitations for specified causes;
6 prescribing circumstances for the tolling of
7 the statute of limitations as a result of
8 administrative or judicial proceedings;
9 limiting the period for which additional
10 penalties and interest may be imposed;
11 requiring a final order to be issued within a
12 certain period after an administrative appeal
13 is filed; requiring reasonable compensation to
14 a taxpayer for resubmission of information or
15 documents; requiring the application of tax
16 overpayments to tax underpayments prior to
17 imposition of a penalty; amending s. 213.015,
18 F.S.; providing additional rights to taxpayers
19 regarding interest paid on delinquent taxes and
20 interest received on delinquent refunds,
21 freedom from being reaudited, rights of appeal,
22 rights to obtain reimbursement of certain fees
23 on favorable appeals, the right to compensation
24 for providing certain information or documents
25 to the department, freedom from commissioned
26 auditors, statutes of limitation, the time
27 permitted to file for refunds, and the right to
28 apply overpayments to the payment of other
29 taxes due; creating s. 213.235, F.S.; providing
30 for determination of the annual rate of
31 interest applicable to certain tax payment
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1 deficiencies; creating s. 213.255, F.S.;
2 providing for payment of interest on
3 overpayments of taxes, payment of taxes not
4 due, or taxes paid in error with respect to
5 taxes administered by the Department of Revenue
6 if refund is not made within a specified
7 period; providing requirements for refund
8 applications; requiring a bond or other
9 security under certain conditions; providing
10 for application; amending s. 213.34, F.S.;
11 prescribing conditions under which the
12 Department of Revenue may not re-audit a
13 taxpayer; providing conditions under which the
14 Department of Revenue may be liable for
15 accountant's and attorney's fees incurred by a
16 taxpayer as the result of an audit; amending s.
17 215.26, F.S.; revising the period during which
18 a taxpayer must file a refund application;
19 providing an effective date.
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21 Be It Enacted by the Legislature of the State of Florida:
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23 Section 1. Subsections (3) and (4) of section 95.091,
24 Florida Statutes, are amended to read:
25 95.091 Limitation on actions to collect taxes.--
26 (3)(a)1. With the exception of taxes levied under
27 chapter 198 and tax adjustments made pursuant to s. 220.23,
28 the Department of Revenue may determine and assess the amount
29 of any tax, penalty, or interest due under any tax enumerated
30 in s. 72.011 which it has authority to administer and the
31 Department of Business and Professional Regulation may
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1 determine and assess the amount of any tax, penalty, or
2 interest due under any tax enumerated in s. 72.011 which it
3 has authority to administer:
4 a. For taxes due before July 1, 1998, within 5 years
5 after the date the tax is due, any return with respect to the
6 tax is due, or such return is filed, whichever occurs later;
7 for taxes due before July 1, 1998, and for which the
8 department has not initiated an audit with respect to such
9 taxes by July 1, 1998, within 2 years after the date the tax
10 is due, any return with respect to the tax is due, or such
11 return is filed, whichever occurs later; and for taxes due on
12 or after July 1, 1998, within 2 years after the date the tax
13 is due, any return with respect to the tax is due, or such
14 return is filed, whichever occurs later;
15 b. For taxes due before July 1, 1998, within 6 years
16 after the date the taxpayer either makes a substantial
17 underpayment of tax, or files a substantially incorrect
18 return;
19 c. At any time while the right to a refund or credit
20 of the tax is available to the taxpayer;
21 d. For taxes due before July 1, 1998, at any time
22 after the taxpayer has filed a grossly false return;
23 e.d. At any time after the taxpayer has failed to make
24 any required payment of the tax, has failed to file a required
25 return, or has filed a grossly false or fraudulent return,
26 except that for taxes due on or after July 1, 1998, the
27 limitation prescribed in sub-subparagraph a. applies if the
28 taxpayer has disclosed in writing the tax liability to the
29 department before the department has given the taxpayer notice
30 of that liability; or
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1 f.e. In any case in which there has been a refund of
2 tax erroneously made for any reason:
3 (I) For taxes due before July 1, 1998, within 5 years
4 after making such refund; and
5 (II) For taxes due on or after July 1, 1998, within 2
6 years after making such refund,
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8 or at any time after making such refund if it appears that any
9 part of the refund was induced by fraud or the
10 misrepresentation of a material fact.
11 2. For the purpose of this paragraph, a tax return
12 filed before the last day prescribed by law, including any
13 extension thereof, shall be deemed to have been filed on such
14 last day, and payments made prior to the last day prescribed
15 by law shall be deemed to have been paid on such last day.
16 (b) The limitations in this subsection shall be tolled
17 for a period of 2 years with respect to taxes due before July
18 1, 1998, if the Department of Revenue has issued a notice of
19 intent to conduct an audit or investigation of the taxpayer's
20 account within the applicable period of time as specified in
21 this subsection. The department shall commence an audit
22 within 120 days after it issues a notice of intent to conduct
23 an audit, unless the taxpayer requests a delay. If the
24 taxpayer does not request a delay and the department does not
25 begin the audit within 120 days after issuing the notice, the
26 tolling period shall terminate.
27 (4) If administrative or judicial proceedings for
28 review of the tax assessment or collection are initiated by a
29 taxpayer begun within the a period of limitation prescribed in
30 this section, the running of the period shall be tolled during
31 the pendency of the proceeding. Administrative proceedings
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1 shall include taxpayer protest proceedings initiated under s.
2 213.21 and department rules. No additional interest or penalty
3 may be imposed for any tax liability for any period occurring
4 after the expiration of the time limitation prescribed in this
5 section except for the period during which the liability is
6 the subject of a proceeding under chapter 72.
7 Section 2. Notwithstanding any other provision of law:
8 (1) A taxpayer may appeal all tax assessments and
9 penalties to an administrative hearing officer prior to paying
10 the contested amount. The department must issue a final order
11 within 90 days after the appeal is filed.
12 (2) If a taxpayer provides information or documents to
13 the Department of Revenue and the department subsequently
14 requests the taxpayer to provide the same information or
15 documents, the department must pay reasonable compensation to
16 the taxpayer for providing such information or documents.
17 (3) If a taxpayer overpays a tax liability and
18 underpays another tax liability and notifies the Department of
19 Revenue of the overpayment, the department must apply the
20 overpayment to the underpaid tax liability before imposing a
21 penalty against the taxpayer for the underpayment.
22 Section 3. Subsections (8), (12), and (14) of section
23 213.015, Florida Statutes, are amended and subsections (16),
24 (17), (18), and (19) are added to that section, to read:
25 213.015 Taxpayer rights.--There is created a Florida
26 Taxpayer's Bill of Rights to guarantee that the rights,
27 privacy, and property of Florida taxpayers are adequately
28 safeguarded and protected during tax assessment, collection,
29 and enforcement processes administered under the revenue laws
30 of this state. The Taxpayer's Bill of Rights compiles, in one
31 document, brief but comprehensive statements which explain, in
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1 simple, nontechnical terms, the rights and obligations of the
2 Department of Revenue and taxpayers. The rights afforded
3 taxpayers to assure that their privacy and property are
4 safeguarded and protected during tax assessment and collection
5 are available only insofar as they are implemented in other
6 parts of the Florida Statutes or rules of the Department of
7 Revenue. The rights so guaranteed Florida taxpayers in the
8 Florida Statutes and the departmental rules are:
9 (8) The right to seek review, through formal or
10 informal proceedings, of any adverse decisions relating to
11 determinations in the audit or collections processes and the
12 right to seek a reasonable administrative stay of enforcement
13 actions while the taxpayer pursues other administrative
14 remedies available under Florida law (see ss. 120.80(14)(b),
15 213.21(1), 220.717, and 220.719(2)). Such remedies include the
16 right to appeal all assessments and penalties to an
17 administrative hearing officer prior to paying the contested
18 amount and the right to have a final order issued within 90
19 days after the appeal is filed.
20 (12) The right to procedures that which assure that
21 the individual employees of the department or outside auditors
22 retained by the department are not paid, evaluated, or
23 promoted on the basis of the amount of assessments or
24 collections from taxpayers (see ss. 213.30(2) and 213.28(3) s.
25 213.30(2)).
26 (14)(a) The right of the taxpayer or the department,
27 as the prevailing party in a judicial or administrative action
28 brought or maintained without the support of justiciable
29 issues of fact or law, to recover all costs of the
30 administrative or judicial action, including reasonable
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1 attorney's fees, and of the department and taxpayer to settle
2 such claims through negotiations (see ss. 57.105 and 57.111).
3 (b) The right of a taxpayer to recover reasonable
4 accountant's fees and attorney's fees incurred in an audit, if
5 the taxpayer appeals a department ruling and the appeal
6 results in a finding in favor of the taxpayer (see
7 s.213.34(6)).
8 (16)(a) The right to receive interest at a market rate
9 on a refund that is not paid within 90 days after filing a
10 completed application for refund of overpayments, payment of
11 taxes not due, or taxes paid in error (see ss. 213.255 and
12 220.723).
13 (b) The right to be charged interest on delinquent
14 taxes at a market rate (see ss. 213.235, 220.807, and
15 220.809).
16 (17) The right to have returns audited within 2 years
17 after they are filed; and the right to file for a refund
18 within 3 years after the tax was paid and to not be reaudited
19 for the same time period, unless fraud is suspected (see ss.
20 95.091, 213.34(5), and 215.26).
21 (18) The right to reasonable compensation for the
22 resubmission of information or documents to the department.
23 (19) The right to have any overpayments of taxes
24 applied to separate underpayments of other tax liabilities
25 before penalties are imposed for the underpayments.
26 Section 4. Section 213.235, Florida Statutes, is
27 created to read:
28 213.235 Determination of interest on deficiencies.--
29 (1) Notwithstanding any other provision of law, the
30 annual rate of interest applicable to tax payment deficiencies
31 that arise on or after July 1, 1998, shall be the adjusted
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1 rate established by the executive director of the department
2 under subsection (2), unless a lower rate for the particular
3 tax is specifically provided for in law, in which case the
4 lower rate shall apply. This annual rate of interest is
5 applicable to all taxes enumerated in s. 213.05.
6 (2) If the adjusted prime rate charged by banks,
7 rounded to the nearest full percent, during either:
8 (a) The 6-month period ending on September 30 of any
9 calendar year; or
10 (b) The 6-month period ending on March 31 of any
11 calendar year,
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13 differs from the interest rate in effect on such date, the
14 executive director of the department shall, within 20 days,
15 establish an adjusted rate of interest equal to such adjusted
16 prime rate.
17 (3) An adjusted rate of interest established under
18 this section shall become effective:
19 (a) On January 1 of the succeeding year, if based upon
20 the adjusted prime rate for the 6-month period ending on
21 September 30; or
22 (b) On July 1 of the same calendar year, if based upon
23 the adjusted prime rate for the 6-month period ending on March
24 31.
25 (4) For the purposes of this section, "adjusted prime
26 rate charged by banks" means the average predominant prime
27 rate quoted by commercial banks to large businesses, as
28 determined by the Board of Governors of the Federal Reserve
29 System.
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1 (5) Once established, an adjusted rate of interest
2 shall remain in effect until an adjustment is made under
3 subsection (2).
4 Section 5. Section 213.255, Florida Statutes, is
5 created to read:
6 213.255 Interest.--Interest shall be paid on
7 overpayments of taxes, payment of taxes not due, or taxes paid
8 in error, subject to the following conditions:
9 (1) A refund application must be filed with the
10 department within the time specified by s. 215.26.
11 (2) A refund application shall not be processed until
12 it is determined complete. A refund application is complete
13 if it is filed on a permitted form and contains:
14 (a) The taxpayer's name, address, identifying number,
15 and signature.
16 (b) Sufficient information, whether on the application
17 or attachments, to permit mathematical verification of the
18 amount of the refund.
19 (c) The amount claimed.
20 (d) The specific grounds upon which the refund is
21 claimed.
22 (e) The taxable years or periods involved.
23 (f) A completed audit, if an audit is required by the
24 department.
25 (3) If the refund application is not complete, the
26 department shall return the application to the taxpayer with
27 instructions to include any documents needed to complete the
28 application.
29 (4) Interest shall not commence until 90 days after a
30 complete refund application has been filed and the amount of
31 overpayment has not been refunded to the taxpayer or applied
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1 as a credit to the taxpayer's account. If the department and
2 the taxpayer mutually agree that an audit of the claim is
3 necessary, interest shall not commence until the audit of the
4 claim is final.
5 (5) If a tax is adjudicated unconstitutional and
6 refunds are ordered by the court, interest shall not commence
7 on complete applications until 90 days after the adjudication
8 becomes final and unappealable or 90 days after a complete
9 application has been filed, whichever is later.
10 (6) Interest shall be paid until a date determined by
11 the department which shall be no more than 7 days prior to the
12 date of the issuance of the refund warrant by the Comptroller.
13 (7) No interest shall be paid if the department has
14 reasonable cause to believe that it could not recover the
15 amount of any refund paid in error from the person claiming
16 the refund, unless such person files a cash bond or a surety
17 bond in the amount of the refund claimed or such person makes
18 other security arrangements satisfactory to the department.
19 The cash or surety bond shall be endorsed by a surety company
20 authorized to do business in this state and shall be
21 conditioned upon payment in full of the amount of any refund
22 paid in error for any reason. The department shall provide a
23 written notice of its determination that a cash or surety bond
24 is required, in which event interest shall not commence until
25 the person filing the claim satisfies this requirement.
26 (8) The rate of interest shall be the adjusted rate
27 established pursuant to s. 213.235. This annual rate of
28 interest shall be applied to all refunds of taxes administered
29 by the department except for corporate income taxes and
30 emergency excise taxes governed by ss. 220.721 and 220.723.
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1 (9) This section shall apply to eligible refunds based
2 on tax payments made on or after July 1, 1998.
3 Section 6. Subsections (5) and (6) are added to
4 section 213.34, Florida Statutes, to read:
5 213.34 Authority to audit.--
6 (5) If a return is audited, the department may not
7 reaudit the taxpayer for the same time period and the same
8 tax, unless fraud is suspected.
9 (6) If a taxpayer appeals the results of an audit and
10 the appeal results in a finding in favor of the taxpayer, the
11 department is liable for reasonable accountant's fees and
12 attorney's fees incurred by the taxpayer as a result of the
13 audit.
14 Section 7. Subsection (2) of section 215.26, Florida
15 Statutes, is amended to read:
16 215.26 Repayment of funds paid into State Treasury
17 through error.--
18 (2) Application for refunds as provided by this
19 section must be filed with the Comptroller, except as
20 otherwise provided in this subsection, within 3 years after
21 the right to the refund has accrued or else the right is
22 barred. Except as provided in chapter 198 and s. 220.23, an
23 application for a refund of a tax enumerated in s. 72.011,
24 which tax was paid after September 30, 1994, and before July
25 1, 1998, must be filed with the Comptroller within 5 years
26 after the date the tax is paid. Except as provided in chapter
27 198 and s. 220.23, an application for a refund of a tax
28 enumerated in s. 72.011, which tax was paid on or after July
29 1, 1998, must be filed with the Comptroller within 3 years
30 after the date the tax is paid. The Comptroller may delegate
31 the authority to accept an application for refund to any state
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1 agency, or the judicial branch, vested by law with the
2 responsibility for the collection of any tax, license, or
3 account due. The application for refund must be on a form
4 approved by the Comptroller and must be supplemented with
5 additional proof the Comptroller deems necessary to establish
6 the claim; provided, the claim is not otherwise barred under
7 the laws of this state. Upon receipt of an application for
8 refund, the judicial branch or the state agency to which the
9 funds were paid shall make a determination of the amount due.
10 If an application for refund is denied, in whole or in part,
11 the judicial branch or such state agency shall notify the
12 applicant stating the reasons therefor. Upon approval of an
13 application for refund, the judicial branch or such state
14 agency shall furnish the Comptroller with a properly executed
15 voucher authorizing payment.
16 Section 8. This act shall take effect July 1, 1998.
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1 STATEMENT OF SUBSTANTIAL CHANGES CONTAINED IN
COMMITTEE SUBSTITUTE FOR
2 SB 322
3
4 The committee substitute differs from Senate Bill 322
principally by:
5
-- Providing that a two-year statute of limitations on
6 assessment of taxes, penalty, or interest applies to
taxes due on or after July 1, 1998, as well as to taxes
7 due before July 1, 1998, if the Department of Revenue has
not initiated an audit by that date; and providing that
8 existing statutes of limitation otherwise apply to taxes
due before July 1, 1998;
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-- Providing that, for taxes due on or after July 1, 1998, if
10 a taxpayer files a fraudulent return but discloses the
liability to the department before the department gives
11 the taxpayer notice of the liability, then a two-year
statute of limitations shall apply to assessment of
12 taxes, penalty, or interest;
13 -- Providing that the authority to toll the statute of
limitations on tax assessments when the department issues
14 a notice of intent to audit applies solely to taxes due
before July 1, 1998; and specifying that the authority to
15 toll the limitations period in the event of a judicial or
administrative review applies to reviews initiated by the
16 taxpayer;
17 -- Providing for the establishment of an adjusted rate of
interest, based on the adjusted prime rate, on tax
18 payment deficiencies that arise on or after July 1, 1998,
unless a lower rate is provided in law;
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-- Providing for the establishment of an adjusted rate of
20 interest, based on the adjusted prime rate, on refunds
for tax payments made on or after July 1, 1998; and
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-- Providing that the department, rather than a hearing
22 officer, must issue a final order within 90 days after an
appeal to a hearing officer is filed by a taxpayer on an
23 assessment or penalty.
24 In addition, although the bill prescribes certain taxpayer
rights in an as yet unnumbered section of the Florida
25 Statutes, the committee substitute, in several instances,
amends existing sections of the Florida Statutes or creates
26 new sections in order to codify such rights. Both the bill and
the committee substitute incorporate these rights into the
27 statutory Taxpayer's Bill of Rights.
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