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Board of Equalization Rules for California Tax Administration and Appellate Review

Board of Equalization Rules for California Tax Administration and Appellate Review. Introduction & Overview. Proposed Board of Equalization Rules for California Tax Administration and Appellate Review (Proposed Rules).

JasminFlorian
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Board of Equalization Rules for California Tax Administration and Appellate Review

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  1. Board of Equalization Rules for California Tax Administration and Appellate Review Introduction & Overview

  2. Proposed Board of Equalization Rules for California Tax Administration and Appellate Review (Proposed Rules) • Reviewing petitions, claims for refund, and requests for relief of penalties for all of theBusiness Taxes and Fees • Reviewing petitions and applications for Property Tax Programs administered by the Board • Acting on appeals of Franchise Tax Board actions The Proposed Rules are Designed to Encompass all of the Board’s Procedures for:

  3. Intent of the Proposed RulesTransparencyand Responsiveness: • Provide a single source for all of the Board’s procedures from the initiation of administrative review to the Board’s final decision • Increase transparency by providing more detailed procedures for all the Board’s programs • Improve voluntary compliance and public trust by reorganizing the Board’s procedures to be more accessible to the public • Maintain responsiveness to the public by addressing specific concerns raised to the Board

  4. Increasing TransparencyThese Proposed Rules Will: • Create new procedural regulations for Business Taxes and Fees to replace numerous operations memos and publications • Replace and augment current regulations with more detailed regulations for Property Tax petitions • Prescribe new procedures for the Franchise and Income Tax appeals briefing process • Create new Board Hearing Procedure regulations containing information that was not easily accessible to the public

  5. Currently, the Board’s procedures are spread throughout the: Revenue and Taxation Code California Code of Regulations Board Publications, Forms, and Operations Memos These Proposed Rules will reorganize the procedures into one location in the California Code of Regulations Procedures will be organized by tax program and their chronological sequence in the administrative or appellate review process Reorganization of the Board’s ProceduresWill Improve Public Access:

  6. Improving Responsiveness to the PublicProposed Rules Address Public Concerns • Appropriateness of communications with Board Members • Defining confidentiality of tax and fee payer information upon an oral hearing before the Board • Publication of Board Decisions

  7. Organization of the Proposed RulesFor Discussion Purposes the Proposed Rules are Divided into Five Parts: • Part 1, Statement of Intent; Title • Part 2, Review of Sales and Use Taxes,Timber Yield Tax, and Special Taxes and Fees (Business Taxes and Fees) • Part 3, Administrative Review of Property Taxes • Part 4, Appeals of Franchise Tax Board Actions • Part 5, General Board Hearing Procedures

  8. Organization of the Proposed RulesThe Proposed Rules are Divided into Five Parts: • Section numbers within each part correspond to the part numbers • For example: Section 2000 is the first section in part 2 • Please note that the Proposed Rules will be renumbered before they are placed into the California Code of Regulations

  9. Statement of IntentPart 1 Part 1 contains the Board’s Statement of Intent for the proposed rules and provides that: • Tax collection is the most sensitive point of contact between citizens and their government; and • Access to government officials, along with clear, well organized, and understandable procedures will promote a positive relationship between citizens and their government

  10. Statement of IntentPart 1 • The Proposed Rules also : • Declare that it is imperative for the Board Members to remain accessible to their constituents, subordinates, and other governmental agenciesat all times • Provide comprehensive procedures for all of the Board’s administrative and appellate review processes • Address specific concerns raised with regard to: • Issuance of decisions; • Publication of opinions; and • Nature of Board hearings

  11. Review of Sales and Use Taxes,Timber Yield Tax, and Special Taxes and Fees (Business Taxes and Fees)Part 2 • This part contains the procedures governing the administrative review of Business Taxes and Fees • Article 1 provides that Part 2 governs all: • Petitions for redetermination, • Late protests, • Applications for administrative review, and • Claims for refund • Part 2 applies to all requests for relief under the following taxes and fees:

  12. Sales and Use Tax Motor Vehicle Fuel Tax Use Fuel Tax Tax on Insurers Cigarette and Tobacco Products Tax Alcoholic Beverages Tax Timber Yield Tax Emergency Resources Surcharges Emergency Telephone Users Surcharges Hazardous Substance Tax Integrated Waste Management Fee Oil Spill Response, Prevention, and Administration Fees Underground Storage Tank Maintenance Fee Diesel Fuel Tax Business Taxes and FeesPart 2

  13. Business Taxes and FeesPart 2 Also Covers Procedures For These Fees: • Covered Electronic Waste Recycling Fee • Tire Recycling Fee • Marine Invasive Species Fee • Natural Gas Surcharge • Water Rights Fee

  14. Business Taxes and FeesPetitions for Redetermination, Article 2A: This Article: • Identifies who may file a petition • Provides the applicable statute of limitation • Prescribes the contents of the petition • Provides the appropriate addresses for filing petitions • Explains how petitions will be reviewed by the appropriate section or group prior to any appeals conference

  15. Business Taxes and FeesArticle 2A Also Addresses: • Petitioners’ ability to amend their petitions; • Continuing accrual of interest; • Scope of petitions filed under these programs: • Hazardous Substances Tax Law • Childhood Lead Poisoning Prevention Fee • Covered Electronic Waste Recycling Fee • Water Rights Fee Law

  16. Business Taxes and FeesLate Protests, Article 2B • Article 2B provides for the Board’s discretionto treat an untimely petition as a late protest • Provides that late protests will be reviewed in accordance with Article 2A • Except, however, that the Board will retain discretion as to whether to provide an appeals conference or oral hearing before the Board

  17. Business Taxes and FeesJeopardy Determinations, Article 2C • Article 2C prescribes the contents of Petitions for Redetermination and Applications for Administrative Review of Jeopardy Determinations, and applicable statute of limitation • It prescribes the scope of applications for administrative review, and explains the review process • It explains the need to make a security deposit with the Board to prevent the seizure and sale of property

  18. Business Taxes and FeesClaims for Refund, Article 3 Article 3 establishes the following: • Identifies those persons who may file a claim • Provides the statute of limitation for filing • Explains the effect of failing to file a timely claim (waiver of rights) • Prescribes the contents of a complete claim

  19. Business Taxes and FeesClaims for Refund, Article 3 Article 3 also: • Provides the addresses for mailing claims • Describes the process for reviewing claims • Explains that the Board may credit or offset overpayments • Defines the scope of claims filed under theMotor Vehicle Fuel Tax Law, Hazardous Substances Tax Law, Covered Electronic Waste Recycling Fee, and the Water Rights Fee Law

  20. Business Taxes and FeesInnocent Spouse & Equitable Relief, Article 4A • Identifies those eligible for innocent spouse relief • Prescribes the contents of a request for innocent spouse relief • Provides the address for mailing requests • Explains the Board’s process for reviewing innocent spouse relief requests

  21. Business Taxes and FeesSuccessors’ Relief of Penalties, Article 4B • Under Article 4B successors may request relief from penalties imposed on their predecessors pursuant to the Sales and Use Tax Law • A successor’s request for relief may be included in the successor’s petition for redetermination, if any • All such requests are required to include a written statement signed under penalty of perjury stating the facts upon which the request for relief is based

  22. Business Taxes and FeesOther Requests for Relief of Penalties, Article 4C • Reasonable cause • Unreasonable error or delay • Reasonable reliance on written advice from the Board • Disaster

  23. Business Taxes and FeesDistribution of Local Taxes, Article 5 Addressing claims of incorrect or non- distribution of local tax, Article 5 generally incorporates the Board’s current procedures contained in California Code of Regulations, title 18, section 1807

  24. Business Taxes and FeesAppeals Conferences, Article 6 This article addresses: • Scheduling of an appeals conference • Functions of the Appeals Division • Submitting evidence to the Appeals Division • Prescribes those persons present at anappeals conference • How to postpone and reschedule conferences • How to expedite the appeals conference

  25. Business Taxes and FeesAppeals Conferences, Article 6 Article 6 also: • Prescribes the contents of decisions and recommendations issued by the Appeals Division • Explains that Board staff cannot request an oral hearing before the Board to contest a decision and recommendation favorable to a tax or fee payer

  26. Administrative Review of Property TaxesPart 3 • Article 1 of Part 3 addresses petitions for reassessment of state-assessed property and private railroad cars • Board documents and underlying data will be available to state assessees annually after May 31st • Prescribes the hearings procedures applicable to assessment factors

  27. Property TaxesPetitions for Reassessment of State-assessed Property Article 1 also: • Provides the statute of limitation applicable to state assessees’ petitions • Prescribes each petition’s contents • Sets forth the Board’s entire review process, including briefing • Explains that the Board will not reconsider or rehear such petitions after it has reached a decision

  28. Property TaxesPetitions for Equalization of Gov’t-Owned Property • Article 2 addresses petitions for review, equalization, and adjustment of assessments of publicly-owned property • Property assessed pursuant to Article XIII, §11, subdivision (g) of the California Constitution • Provides the applicable statute of limitation and prescribes the contents of petitions for review

  29. Property TaxesPetitions for Equalization of Gov’t-Owned Property Article 2 also: • Provides procedures for the county assessor to answer the petition • Explains that the Appeals Division will conduct a pre-hearing conference to clarify and focus the issues for Board Hearing • Guarantees access to information on Board assessed property to both the applicant andthe county assessor

  30. Property TaxesWelfare Exemption Appeals, Article 3 Article 3 addresses: • Petitions appealing Welfare Exemption ineligibility findings • Filed pursuant to Rev. & Tax. Code §254.6, and • Petitions appealing a denial of a supplemental clearance certificate requested pursuant to subdivision (g) of Rev. & Tax. Code §214

  31. Property TaxesWelfare Exemption Appeals, Article 3 Article 3 also: • Identifies the applicable statue of limitation • Prescribes the contents of petitions • Requires a pre-hearing conference with the petitioner to clarify facts and issues in dispute • Prescribes the briefing schedule • Lists the hearing documents to be distributed to the parties, and • Provides that the Board’s decisions are final

  32. Property TaxesCounty Assessment Samples, Article 4 • Article 4 addresses the Board’s property tax assessment sampling program (Gov. Code §15640) • Provides the statute of limitation applicable to county assessors’ petitions appealing appraisals made by the Board’s County Property Tax Division, and • Prescribes the contents of such petitions

  33. Property TaxesCounty Assessment Samples, Article 4 This review process includes: • Acknowledgement of the petition • A pre-hearing conference • Briefing of the issues by the Legal Department and petitioner • Preparation of a hearing summary by the Appeals Division, and an • Oral hearing before the Board

  34. Appeals of Franchise Tax Board ActionsStatement of Jurisdiction,Part 4, Article 1 • This article provides a clear and concise statement of the Board’s jurisdiction regarding: • Notices of action • Notices of determination not to abate interest • Notices granting or denying innocent spouse relief • Notices denying a claim for assistance under the Senior Citizens Homeowners andRenters Property Tax Assistance Law • Jurisdiction also arises if the Franchise Tax Board fails to act on a claim within 6 months

  35. Appeals of Franchise Tax Board ActionsContents & Timing of Appeals,Article 2 Article 2: • Prescribes the contents of an appeal from the actions of the Franchise Tax Board • Delegates authority to the Chief of Board Proceedings to grant appellants additional time to perfect incomplete appeals • Establishes the time period in which to filea timely appeal

  36. Appeals of Franchise Tax Board ActionsBriefing Process, Article 3 Article 3 describes the briefing process and the following briefing schedules: • General (or default) schedule • Innocent spouse appeals schedule • Including participation by the non-appealing spouse • Homeowners’ and Renters Property Tax Assistance appeals schedules • New, streamlined elective briefing schedule applicable to appeals where the amount at issueis not more than $5,000 (including tax, penalties, fees and paid interest)

  37. Appeals of Franchise Tax Board ActionsRequests for Oral Hearing, Article 4 • Requires written requests for an oral hearing before the Board • Creates a new procedure allowing theAppeals Division to request additional briefing • Requires the Appeals Division to submit a hearing summary 30 days before an oral hearing

  38. Appeals of Franchise Tax Board ActionsIssuance of Board Decisions, Article 5 • Letter Decisions • Non-precedential • Provides a short explanation of the decision • Summary Decisions • Non-precedential • Sets forth findings of fact and conclusions of law • Formal Opinions • Creates Precedent • Sets forth findings of fact and conclusions of law • Dissenting Opinions • Containing a Board Member’s rationale for opposingthe adoption of a Formal Opinion

  39. Appeals of Franchise Tax Board ActionsFinality of Decisions, Article 6 Article 6 addresses: • Finality of decisions • Board’s authority to hold decisions in abeyance before they become final • Prescribes the procedures for submitting and responding to a petition for rehearing, and • Establishes the grounds for granting such a petition

  40. General Board Hearing ProceduresPart 5 This part of the Proposed Rules: • Reorganizes the Board’s hearing procedures into a chronological order • Beginning with the scheduling of all the Board meetings for the year • Ending with a discussion of the disclosable public records produced in the hearing process • Provides that Part 5 applies to all of the Board’s programs, but that the more specific provisions of Part 4 take precedent

  41. General Board Hearing ProceduresScheduling of Board Hearings, Article 2 This article is separated into 3 chapters: • Chapter 1 provides for the adoption of the Board’s meeting calendar for the year • Chapter 2 explains how cases are scheduled for an oral hearing and how a scheduled case may be dismissed, deferred or postponed

  42. General Board Hearing ProceduresBoard Hearings, Article 2 Chapter 3 provides the following: • Identifies the 3 main pre-hearing documents: • Power of attorney form • Contribution disclosure form • Hearing summary • Information needed to prepare for the hearing • Describes the nature of the hearing • Allocates time and the presentation of evidence at the hearing

  43. General Board Hearing ProceduresCommunication with Board Members, §5015.1 Section 5015.1 implements the Board Members’ intent to be accessible to their constituents, their subordinates, and other governmental agencies at all times and states that: “[S]uch persons and their authorized representatives, including members of theState Bar, may contact Board Membersat any time, including while a case orcontroversy involving such personis pending before the Board.”

  44. General Board Hearing ProceduresPreparation for Board Meetings, Article 3 Article 3 of Part 5: • Explains how the Board prepares its agenda for a Board meeting • Includes a requirement that thePublic Agenda Notice be issued at least10-days prior to the applicable meeting

  45. General Board Hearing ProceduresParticipating in Board Hearings, Article 4 Article 4: • Identifies the time that participants should arrive for their oral hearings • Explains how to: • Sign-in for a hearing • Submit additional exhibits • Register witnesses • Emphasizes the need to submit completed contributions disclosure forms before the hearing • Indicates that the TRA staff will be available to assist tax and fee payers at the hearing

  46. General Board Hearing ProceduresConducting Board Hearings, Article 5 • Article 5 identifies the laws applicable to the conduct of a Board meeting • It explains: • How the Chair calls meetings to order • Cases are called in the order provided in the Public Agenda Notice • General order of each hearing • That members of the public may address the Board on any agenda item

  47. General Board Hearing ProceduresQuorum & Motion Requirements, Article 6 Article 6 requires: • That at least 3 Board Members (quorum) be present for the Board to render a decision • It prescribes: • the form of motions • motions are passed or defeated based upon the vote of the majority of Board Members participating in the vote • the procedures for reopening a prior vote

  48. General Board Hearing ProceduresNotification of Decisions, Article 7 This article prescribes: • Procedures by which the Board will notify the parties of its decision and explains when that decision becomes final • Procedures applicable to: • the filing of a petition for rehearing • the Board’s action on the petition • holding a new hearing when granted

  49. General Board Hearing ProceduresDocuments & Disclosable Information, Article 8 Article 8 contains: • The Board Proceedings Division’s mailing address for correspondence • Timeliness of documents • Two sets of alternative provisions governing publicly disclosable information relevant toBoard hearings

  50. General Board Hearing ProceduresDisclosure Alternative 1 • Section 5033 contains provisions that are similar to the Board’s current policy regarding disclosure • The minutes and transcript from an oral hearing, and exhibits officially incorporated into the hearing record are disclosable public records • Documents distributed to Board Members for discussion and consideration at the hearing are also disclosable public records, unless their disclosure is prohibited by law

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