SB2926 SD1.DOC

SECTION 1. Section 231-7.5, Hawaii Revised Statutes, is amended to read as follows:

"§231-7.5 [~~Expedited~~] Administrative appeals and dispute resolution program. (a) The department shall be authorized to implement an administrative appeals and dispute resolution program that shall expeditiously resolve all tax, penalty, interest, fine, assessment, and other such disputes between the department and the taxpayer or return preparer. The director or the director's designee, who shall report directly and be answerable solely to the director, shall serve as an [~~independent~~] administrative appeals officer and shall be authorized to compromise, settle, or otherwise resolve any dispute on any basis, including hazards and costs of litigation, considering equally the position of the taxpayer or return preparer and the department on an impartial basis. The [~~independent~~] administrative appeals officer shall be independent and not be influenced by any department tax compliance initiatives and policies, or loss of revenue to the State. [~~Decisions of the independent appeals officer shall be in writing stating the facts, analysis, and conclusions in support, which shall be provided to the taxpayer and return preparer.~~] Persons who currently serve or have served in the previous five years as an auditor, audit supervisor or manager, collector, collection supervisor or manager, district manager or supervisor, tax compliance coordinator, or tax compliance administrator, shall not be eligible to be the [~~director's designee.~~] administrative appeals officer.

(b) Decisions of the administrative appeals officer shall be provided to the taxpayer or return preparer and shall be in writing stating the facts, analysis, and conclusions in support.

(c) Notwithstanding any other law to the contrary, including tax appeal procedures set forth under chapter 232, a taxpayer or return preparer shall be eligible to petition the department once for participation in the administrative appeals and dispute resolution program after [~~issuance of~~] a notice of proposed assessment[;] or notice of assessment is issued; provided that if [a taxpayer has filed a tax appeal with the tax appeal court or other court, the taxpayer shall first be required to obtain the approval of the director and permission from the respective court prior to petitioning the department for participation.]:

(1) A taxpayer petitions the administrative appeals and dispute resolution program after a notice of proposed assessment has been issued, the petition shall be filed within twenty days after the mailing of the notice of proposed assessment;

(2) A taxpayer petitions the administrative appeals and dispute resolution program after a notice of final assessment has been issued, the petition shall be filed within thirty days after the mailing of the notice of assessment to the taxpayer's last known residence or place of business;

(3) A return preparer petitions the administrative appeals and dispute resolution program after a notice and demand of the penalty is made, the petition shall be filed within thirty days after the mailing of the notice and demand of the penalty to the return preparer's last known residence or place of business; or

(4) A taxpayer or return preparer has filed a tax appeal with the tax appeal court or other court, the taxpayer or return preparer shall first obtain permission from the director and the respective court in order to participate in the administrative appeals and dispute resolution program.

The director shall have the right to deny a petition for cause.

(d) Nothing in this section shall be interpreted to affect appeal rights provided under section 235-114.

[~~(c)~~] (e) The department shall adopt procedures to carry out the purposes of this section, including procedures relating to ex parte communications between the director or the [~~director's designee~~] administrative appeals officer and other department personnel to ensure that such communications do not compromise or appear to compromise the independence of the administrative appeals and dispute resolution program.

(f) Taxpayers and return preparers shall petition the administrative appeals and dispute resolution program using the forms prescribed by the department. All petitions shall be filed with the administrative appeals and dispute resolution program and the auditor or department official assigned to the taxpayer or return preparer's case by the applicable deadline set forth in subsection (c).

[~~(d)~~] (g) The director of taxation may appoint an administrative appeals officer as necessary to administer this section, and perform other duties as directed by the director. The director may appoint, commission, or assign support staff as necessary to assist the administrative appeals officer. The administrative appeals officer shall be exempt from chapter 76 and may be a legal or accounting professional; provided that no individual appointed under this section shall render legal services reserved to the attorney general under chapter 28.

(h) The director may prescribe rules as may be necessary or appropriate to carry out the purposes of this section."

SECTION 2. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 3. This Act shall take effect on January 7, 2059.

Report Title:

Tax Administration; Administrative Tax Appeals and Dispute Resolution Program

Description:

Changes the title of the appeals officer from independent appeals officer to administrative appeals officer. Makes a taxpayer or return preparer eligible to petition to participate in the administrative appeals and dispute resolution program and establishes conditions, procedures, and deadlines whereby the taxpayer or return preparer may petition to do so. Takes effect on 1/7/2059. (SD1)

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.

THE SENATE	S.B. NO.	2926
TWENTY-EIGHTH LEGISLATURE, 2016		S.D. 1
STATE OF HAWAII