Amended by Stats. 2021, Ch. 432, Sec. 138. (SB 824) Effective January 1, 2022.
The department shall administer this article. Unless the context indicates otherwise, the provisions of this article shall apply to this part.
Article 5 - The California Taxpayers’ Bill of Rights
California Revenue and Taxation Code — §§ 41160-41176
Sections (19)
Amended by Stats. 2021, Ch. 432, Sec. 139. (SB 824) Effective January 1, 2022.
(a)The department shall establish the position of the Taxpayers’ Rights Advocate. The advocate or that person’s designee shall be responsible for facilitating resolution of taxpayer complaints and problems, including any taxpayer complaints regarding unsatisfactory treatment of taxpayers by
department 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 director of the department.
Amended by Stats. 2021, Ch. 432, Sec. 140. (SB 824) Effective January 1, 2022.
(a)The department 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 department.
(2)Department 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 department 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.
Added by Stats. 2023, Ch. 511, Sec. 24. (SB 889) Effective January 1, 2024.
The department shall conduct an annual hearing to allow industry representatives and individual taxpayers to present proposals on changes to the Emergency Telephone Users Surcharge Act to further improve voluntary compliance and the relationship between taxpayers and the government.
Amended by Stats. 2021, Ch. 432, Sec. 142. (SB 824) Effective January 1, 2022.
The department shall prepare and publish brief but comprehensive statements in simple and nontechnical language that explain procedures, remedies, and the rights and obligations of the department and taxpayers. As appropriate, statements shall be provided to taxpayers with the initial notice of audit, the notice of proposed additional surcharges, any subsequent notice of surcharge due, or other substantive notices. Additionally, the department shall include this language for statements in the annual tax information bulletins that are mailed to taxpayers.
Amended by Stats. 2021, Ch. 432, Sec. 143. (SB 824) Effective January 1, 2022.
(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 department 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)This section shall not prohibit the setting of goals and the evaluation of performance with respect to productivity and the efficient use of time.
Amended by Stats. 2021, Ch. 432, Sec. 144. (SB 824) Effective January 1, 2022.
The department shall develop and implement a program that will evaluate an individual employee’s or officer’s performance with respect to that person’s contact with taxpayers. The development and implementation of the program shall be coordinated with the Taxpayers’ Rights Advocate.
Amended by Stats. 2021, Ch. 432, Sec. 145. (SB 824) Effective January 1, 2022.
The department 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.
Amended by Stats. 2021, Ch. 432, Sec. 146. (SB 824) Effective January 1, 2022.
Procedures of the department, 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 department 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 the taxpayer has a
right to have present at the conference an attorney, accountant, or other designated agent.
Amended by Stats. 2021, Ch. 432, Sec. 147. (SB 824) Effective January 1, 2022.
(a)Every taxpayer is entitled to be reimbursed for any reasonable fees and expenses related to a hearing before the department if all of the following conditions are met:
(1)The taxpayer files a claim for the fee and expenses with the department within one year of the date the decision of the
department becomes final.
(2)The department, in its sole discretion, finds that the action taken by the department staff was unreasonable.
(3)The department decides that the taxpayer be awarded a specific amount of fees and expenses related to the hearing, in an amount determined by the department in its sole discretion.
(b)To determine whether the department staff has been unreasonable, the department shall consider whether the department 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 department 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 department 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.
Amended by Stats. 2021, Ch. 432, Sec. 148. (SB 824) Effective January 1, 2022.
(a)An officer or employee of the department acting in connection with any law administered by the department 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.
Amended by Stats. 2023, Ch. 511, Sec. 25. (SB 889) Effective January 1, 2024.
(a)It is the intent of the Legislature that the department, 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 (2), no recommendation of settlement shall be submitted to the director for approval unless and until that recommendation has been submitted by the chief counsel to the Attorney General. Within 30 days of receiving that recommendation,
the Attorney General shall review the recommendation and advise the chief counsel, in writing, of their conclusions as to whether the recommendation is reasonable from an overall perspective. The chief counsel shall, with each recommendation of settlement submitted to the director also submit the Attorney General’s written conclusions obtained pursuant to this paragraph.
(2)(A) 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 eleven thousand five hundred dollars ($11,500), may be approved by the director.
(B)Beginning on July 1, 2029, and each fifth fiscal year thereafter, the department shall
adjust the amount specified in subparagraph (A) by increasing that amount by a percentage amount equal to the increase in the California Consumer Price Index, as calculated by the Department of Finance with the resulting amount rounded to the nearest one hundred dollars ($100). The first adjustment pursuant to this subparagraph shall be a percentage amount equal to the increase in the California Consumer Price Index from January 1, 2024, to January 1, 2029. Subsequent fifth fiscal year adjustments shall cover subsequent five-year periods. The incremental change shall be added to the previously adjusted amount.
(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 director of the department 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)(A) For any settlement approved by the
director, except those settlements approved pursuant to paragraph (2) of subdivision (b), the Attorney General’s conclusion as to whether the recommendation of settlement was reasonable from an overall perspective.
(B)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 director 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 director within 45 days of the submission of that recommendation to the director. Any recommendation for settlement that is not either approved or disapproved by the director within 45 days of the submission of that recommendation shall be deemed approved.
(2)Where the director disapproves a recommendation for settlement, at the discretion of the director and chief counsel, the matter shall be remanded to staff for further negotiation, and may be resubmitted to the director, in the same manner and subject to the same requirements as the initial submission.
(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)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 department in implementing and administering the settlement program authorized by this section.
(h)The amendments made to this section by the act adding this subdivision shall apply to any settlements approved on or after January 1, 2024.
Amended by Stats. 2018, Ch. 181, Sec. 6. (SB 1507) Effective January 1, 2019.
(a)The California Department of Tax and Fee Administration 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)(1) (A) 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 two thousand three hundred dollars ($2,300) 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.
(B) The amount the Taxpayers’ Rights Advocate may return to each taxpayer subject to a levy or notice to withhold, is limited to two thousand three hundred dollars ($2,300), or the adjusted amount as specified in paragraph (2), in any monthly period.
(C) The Taxpayers’ Rights Advocate may order amounts returned in the case of a seizure of property as a result of a jeopardy determination, subject to the amounts set or adjusted pursuant to this section and if the ultimate
collection of the amount due is no longer in jeopardy.
(2)(A) The California Department of Tax and Fee Administration shall adjust the two-thousand-three-hundred-dollar ($2,300) amount specified in paragraph (1) as follows:
(i)On or before March 1, 2016, and on or before March 1 each year thereafter, the California Department of Tax and Fee Administration shall multiply the amount applicable for the current fiscal year by the inflation factor adjustment calculated based on the percentage change in the Consumer Price Index, as recorded by the California Department of Industrial Relations for the most recent year available, and the formula set forth in paragraph (2) of subdivision (h) of Section 17041. The resulting amount will be the applicable amount for the succeeding fiscal year only when the applicable amount computed is equal to or exceeds a new
operative threshold, as defined in subparagraph (B).
(ii) When the applicable amount equals or exceeds an operative threshold specified in subparagraph (B), the resulting applicable amount, rounded to the nearest multiple of one hundred dollars ($100), shall be operative for purposes of paragraph (1) beginning July 1 of the succeeding fiscal year.
(B) For purposes of this paragraph, “operative threshold” means an amount that exceeds by at least one hundred dollars ($100) the greater of either the amount specified in paragraph (1) or the amount computed pursuant to subparagraph (A) as the operative adjustment to the amount specified in paragraph (1).
(c)The California Department of Tax and Fee Administration 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)Except as provided in subparagraph (C) of paragraph (1) of subdivision (b), this section shall not apply to the seizure of any property as a result of a jeopardy determination.
Amended by Stats. 2021, Ch. 432, Sec. 149. (SB 824) Effective January 1, 2022.
(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 department 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 surcharge 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 surcharge 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.
Amended by Stats. 1993, Ch. 589, Sec. 167. Effective January 1, 1994.
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.
Amended by Stats. 2021, Ch. 432, Sec. 150. (SB 824) Effective January 1, 2022.
(a)A taxpayer may file a claim with the department 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, erroneous processing action, or erroneous collection action by the department. 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, erroneous processing action, or erroneous collection action. The charges are those paid by the taxpayer and not waived or reimbursed by the financial institution or third
party. Each claimant applying for reimbursement shall file a claim with the department that shall be in a form as may be prescribed by the department. In order for the department to grant a claim, the department shall determine that both of the following conditions have been satisfied:
(1)The erroneous levy or notice to withhold, erroneous processing action, or erroneous collection action was caused by department error.
(2)Prior to the erroneous levy or notice to withhold, erroneous processing action, or erroneous collection action, the taxpayer responded to all contacts by the department and provided the department with any requested information or documentation sufficient to establish the taxpayer’s position. This provision may be waived by the department for
reasonable cause.
(b)Claims pursuant to this section shall be filed within 90 days from the date the bank and third-party charges were incurred by the taxpayer. Within 30 days from the date the claim is received, the department shall respond to the claim. If the department denies the claim, the taxpayer shall be notified in writing of the reason or reasons for the denial of the claim.
Amended by Stats. 2022, Ch. 474, Sec. 66. (SB 1496) Effective January 1, 2023.
(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 department shall mail to the taxpayer a preliminary notice. The notice shall specify the statutory authority of the department 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 department 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 department shall immediately issue a release of lien to the taxpayer and the entity recording the lien.
(c)When the department 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)(1) The department may release or subordinate a lien if the department determines any of the following:
(A) Release or subordination will
facilitate the collection of the surcharge liability.
(B) Release or subordination will be in the best interest of the state and the taxpayer.
(C) Release or subordination will be in the best interest of the state and another person that is not the taxpayer but that holds an interest with the taxpayer in the property that is subject to the lien.
(2)The amendments added to this subdivision do not constitute a change in, and are declaratory of, existing law.
Amended by Stats. 2021, Ch. 432, Sec. 152. (SB 824) Effective January 1, 2022.
(a)If any officer or employee of the department recklessly disregards department-published procedures, a taxpayer aggrieved by that action or omission may bring an action for damages against the state
in superior court.
(b)In any action brought under subdivision (a), upon finding of liability on the part of the state, 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.
(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, including 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 department and shall be collected as a surcharge imposed under this part.