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AB-1006 Taxation: Franchise Tax Board: burden of proof. (2011-2012)

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Amended  IN  Assembly  April 25, 2011

CALIFORNIA LEGISLATURE— 2011–2012 REGULAR SESSION

Assembly Bill
No. 1006


Introduced  by  Assembly Member Cook

February 18, 2011


An act to add Part 10.1 (commencing with Section 15706) to Division 3 of Title 2 of the Government Code, and to amend Sections 17024.5, 18526, 19032, 19057, 19058, 19060, 19061, 19065, 19066.5, 23051.5, 24273.5, and 24945 Section 19032 of the Revenue and Taxation Code, relating to taxation.


LEGISLATIVE COUNSEL'S DIGEST


AB 1006, as amended, Cook. Taxation: Franchise Tax Board: statute of limitations: burden of proof.
Existing law imposes income taxes that are administered and collected by the Franchise Tax Board. Existing law establishes a general four-year statute of limitations, subject to specified exceptions, for actions by the Franchise Tax Board regarding tax liability and also provides that the taxpayer has the burden of proof in court proceedings for purposes of state income tax laws.
This bill would provide that the Franchise Tax Board shall have the burden of proof in any court or administrative tax proceedings with respect to any factual issue relevant to ascertaining the tax liability of a taxpayer specified taxpayers. This bill would also provide that these provisions shall not subject a taxpayer those taxpayers to unreasonable search or access to records in violation of the law. This bill would additionally revise the statute of limitations regarding specified actions, including audits, conducted by the board and would require the board to have just cause before beginning any audit.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 This act shall be known, and may be cited, as “The Tax Fairness Act of 2011.”

SEC. 2.

 Part 10.1 (commencing with Section 15706) is added to Division 3 of Title 2 of the Government Code, to read:

PART 10.1. BURDEN OF PROOF

15706.
 (a) The Franchise Tax Board shall have the burden of proof in any court or administrative tax proceeding with respect to a factual issue related to ascertaining the tax liability of a taxpayer.
(b) For purposes of this section:
(1) “Administrative tax proceeding” means, for disputes concerning taxes collected by the Franchise Tax Board, the oral hearing before the members of the State Board of Equalization.
(2) “Tax liability” means any tax or fee assessed or determined by the Franchise Tax Board, including any interest accrued or penalties levied in association with the tax or fee.
(c) Unless provided otherwise, the burden of proof for purposes of this part shall be a preponderance of the evidence.
(d) Nothing in this section shall subject a taxpayer to unreasonable search or access to records in violation of the United States Constitution, the California Constitution, or any other law.
(e) This section shall apply only to court and administrative proceedings involving assessments or notices of determination issued on or after the date on which this act becomes operative.
(f) This section shall apply only to the following taxpayers:
(1) Taxpayers (A) whose filing status is as a single taxpayer, a married taxpayer filing separately, a registered domestic partner filing separately, a head of household, or as a qualifying widow or widower, and (B) whose adjusted gross income is less than one hundred thousand dollars ($100,000) for the taxable year.
(2) Taxpayers (A) whose filing status is a married taxpayer filing jointly or a registered domestic partner filing jointly, and (B) whose adjusted gross income is less than two hundred fifty thousand dollars ($250,000) for that taxable year.

SEC. 3.

 Section 19032 of the Revenue and Taxation Code is amended to read:

19032.
 (a) As soon as practicable after the return is filed, the Franchise Tax Board shall examine it and shall determine the correct amount of the tax.
(b) The Franchise Tax Board shall have just cause in order to begin any audit.