Today's Law As Amended


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AB-2978 Personal income taxes: Victims of Terrorism Relief Act: federal conformity.(2001-2002)



As Amends the Law Today


SECTION 1.

 Section 17131 of the Revenue and Taxation Code is amended to read:

17131.
 Part III of Subchapter B of Chapter 1 of Subtitle A of the Internal Revenue Code, as amended by Sections 111 and 113 of the Victims of Terrorism Relief Act of 2001 (Public Law 107-134),  relating to items that are specifically excluded from gross income, shall apply, except as otherwise provided.
Section 17132.6 of the Revenue and Taxation Code, as amended by Section 20 of Chapter 322 of the Statutes of 1998, is amended and renumbered to read:

17132.6.
17132.5.
 Section 101 of the Internal Revenue Code, relating to certain death benefits, is modified as follows:
(a) Section 101(h) of the Internal Revenue Code, relating to survivor benefits attributable to service by a public safety officer who is killed in the line of duty, is modified to apply to amounts received in taxable years beginning after December 31, 1996, with respect to individuals dying after December 31, 1996.
(b) (1) The amendments made to Section 101 of the Internal Revenue Code by Section 102 of the Victims of Terrorism Relief Act of 2001 (Public Law 107-134) shall apply to taxable years ending before, on, or after September 11, 2001.
(2) If a refund or a credit of any overpayment of tax resulting from the amendments made by the act amending and renumbering this section is precluded at any time before the close of the one-year period beginning on the operative date of that act by the operation of any law or rule of law, including res judicata, that refund or credit may nevertheless be made or allowed if a claim therefor is filed on or before the close of that one-year period.

SEC. 3.

 Section 17731 of the Revenue and Taxation Code is amended to read:

17731.
 (a) Subchapter J of Chapter 1 of Subtitle A of the Internal Revenue Code, relating to estates, trusts, beneficiaries, and decedents, shall apply, except as otherwise provided.
(b) (1)  Section 692(d)(2) The amendments made to Section 692  of the Internal Revenue Code, relating to the ten thousand-dollar ($10,000) minimum benefit, does not apply. Code by Section 101 of the Victims of Terrorism Relief Act of 2001 (Public Law 107-134) shall apply to taxable years ending before, on, or after September 11, 2001. 
(2) The amendments made to Sections 642 and 692 of the Internal Revenue Code by Sections 113 and 116 of the Victims of Terrorism Relief Act of 2001 (Public Law 107-134) shall apply to taxable years ending before, on, or after September 11, 2001.
(3) If a refund or a credit of any overpayment of tax resulting from the amendments made by the act amending and renumbering this section is precluded at any time before the close of the one-year period beginning on the operative date of that act by the operation of any law or rule of law, including res judicata, such refund or credit may nevertheless be made or allowed if a claim therefor is filed on or before the close of that one-year period.

SEC. 4.

 Section 18572 of the Revenue and Taxation Code is amended to read:

18572.
 (a)   Section 7508A of the Internal Revenue Code, relating to the  postponement of certain tax-related deadlines,  tax related deadlines  shall apply, except as otherwise provided.
(b) Section 7508A of the Internal Revenue Code, relating to postponement of certain tax-related deadlines, shall apply to a taxpayer determined by the Director of Finance to be affected by a state of emergency declared by the Governor.
(c) Notwithstanding any other provision of law, the postponement of certain tax-related deadlines under this section shall be determined by the Director of Finance.
(d) (b)  (1) The   amendments made to  Section 7508A of the Internal Revenue Code, relating to postponement of certain tax-related deadlines,  Code by Section 112 of the Victims of Terrorism Relief Act of 2001 (Public Law 107-134)  shall apply to an impacted taxpayer, during an additional relief period, that requests relief pursuant to this section. disasters and terroristic or military actions occurring on or after September 11, 2001, with respect to any action of the Secretary of the Treasury, the Secretary of Labor, or the Pension Benefit Guaranty Corporation occurring on or after January 23, 2002. 
(2) For purposes of this subdivision, the following definitions shall apply:
(A) “Additional relief period” means the period beginning on the date the state postponement period expires, if any, and ending on the date the federal postponement period expires.
(B) “Federal postponement period” means the postponement period as defined in Section 301.7508A-1(d)(3) of Title 26 of the Code of Federal Regulations.
(C) “Impacted taxpayer” means a taxpayer that meets both of the following:
(i) Otherwise qualifies for relief under subdivision (a) or (b), but did not file their California tax return or make payments of tax or fee, as required under Part 10 (commencing with Section 17001), Part 11 (commencing with Section 23001), or this part, before the expiration of the state postponement period.
(ii) Requests relief pursuant to this section in the form and manner prescribed by the Franchise Tax Board and shall, upon request, submit supporting documentation related to the declared disaster, pursuant to this section.
(D) “State postponement period” means the postponement period determined by the Director of Finance pursuant to subdivision (c).
(E) “Supporting documentation” means any of the following:
(i) A letter from the Federal Emergency Management Agency that approves assistance to the impacted taxpayer pursuant to the federal Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. Sec. 5121 et seq.).
(ii) A determination of award letter from the Small Business Administration disaster loan program that approves assistance to the impacted taxpayer.
(iii) A statement, signed under penalty of perjury, from a tax professional indicating the impacted taxpayer’s books and records that are necessary to meet a tax deadline were destroyed in the disaster area or jurisdiction for which the Governor has proclaimed a state of emergency.
(iv) A law enforcement report issued to the impacted taxpayer, related to theft or looting due to lawlessness occurring during the disaster or emergency and in the disaster area or jurisdiction for which the Governor proclaimed a state of emergency.
(v) An insurance claim submitted by or on behalf of the impacted taxpayer, related to the disaster or conditions of emergency.
(vi) Verification of disaster relief related to housing assistance, property damage, employment, public health, mortgage assistance, or business operation received from a government entity, banking institution, or organization described in Section 501(c)(3) of the Internal Revenue Code.
(e) (1) The Franchise Tax Board may adopt regulations that are necessary or appropriate to implement this section.
(2) The Administrative Procedure Act (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 standard, criterion, procedure, determination, rule, notice, guideline, or any other guidance established or issued by the Franchise Tax Board pursuant to this section.
(f) The amendments made to this section by the act adding this subdivision shall apply to any federally declared disaster or Governor-proclaimed state of emergency on or after the effective date of the act adding this subdivision.

SEC. 5.

 Section 19109 of the Revenue and Taxation Code is amended to read:

19109.
 (a) If the Franchise Tax Board extends for any period the time for filing a return under Section 18572 or subdivision (a) of Section 18567 and the time for paying the tax under Section 18572 or subdivision (c) of Section 18567 (and waives any penalties relating to the failure to so file or so pay) for any taxpayer located in a presidentially declared disaster area or any county or city in this state which is proclaimed by the Governor to be in a state of emergency that disaster who  incurred a loss, the Franchise Tax Board shall  shall, notwithstanding subdivision (b) of Section 18572,  abate for that period the assessment of any interest prescribed under this article on that tax.
(b) (1) The Franchise Tax Board may, after written request by a taxpayer, abate the interest on any deficiency or related to a proposed deficiency described in Section 19033 or on a payment of tax to the extent that interest is attributable in whole or in part to the Franchise Tax Board’s delay in the mailing of a notice or other correspondence that requires a response from a taxpayer, in connection with a presidentially declared disaster area, or any county or city in this state that is proclaimed by the Governor to be in a state of emergency.
(2) (A) Except as provided in paragraph (4), after the Franchise Tax Board mails its notice of determination not to abate interest, a taxpayer may appeal the Franchise Tax Board’s determination to the board within the following period, as applicable:
(i) Thirty days in the case of any unpaid interest described under paragraph (1).
(ii) Ninety days in the case of any paid interest described under paragraph (1).
(B) The board shall have jurisdiction over the appeal to determine whether the Franchise Tax Board’s failure to abate interest under this subdivision was an abuse of discretion, and may order an abatement.
(3) If the Franchise Tax Board fails to mail its notice of determination on a request to abate interest within six months after the request is filed, it shall be considered that the Franchise Tax Board has determined not to abate interest and the taxpayer may appeal that determination to the board. This paragraph shall not apply to requests for abatement of interest made under paragraph (4).
(4) A request for abatement of interest related to a proposed deficiency may be made with the written protest of the underlying proposed deficiency filed under Section 19041 or with an appeal to the board under Section 19045 in the form and manner required by the Franchise Tax Board. The action of the Franchise Tax Board denying any portion of the request for abatement of interest related to the proposed deficiency shall be considered as part of the appeal of the action of the Franchise Tax Board on the protest of the proposed deficiency. If the taxpayer filed an appeal from the Franchise Tax Board’s action on the protest of a proposed deficiency and the deficiency is final pursuant to Section 19048, the taxpayer may not thereafter request an abatement of interest accruing prior to the time the deficiency is final. The taxpayer, however, may thereafter request an abatement pursuant to this subdivision limited to the interest accruing after the deficiency is final.
(5) This subdivision shall apply to requests for abatement of interest made on or after the effective date of the act adding this paragraph.
(c) (b)  For purposes of this section, subdivision (a),  the term “presidentially declared disaster area” means, with respect to any taxpayer, any area which the President has determined warrants assistance by the federal government under the Disaster Relief and Emergency Assistance Act.

SEC. 6.

 Section 19559 is added to the Revenue and Taxation Code, to read:

19559.
 (a) The Franchise Tax Board may disclose returns and return information to federal agencies on the same terms and to the same extent as returns and return information may be disclosed by the Secretary of the Treasury under paragraph (3)(C) or (7) of Section 6103(i) of the Internal Revenue Code, as amended by Section 201 of the Victims of Terrorism Relief Act of 2001 (Public Law 107-134). The Franchise Tax Board shall not disclose any return or return information under this section if the Franchise Tax Board determines that the disclosure would identify a confidential informant or seriously impair a civil or criminal tax investigation.
(b) This section shall apply to disclosures made for the period beginning on or after January 23, 2002, and ending on December 31, 2003.
SEC. 7.
 (a) (1) For purposes of the Internal Revenue Code of 1986, as applicable for purposes of Part 10 (commencing with Section 17001), Part 10.2 (commencing with Section 18401), and Part 11 (commencing with Section 23001) of Division 2 of the Revenue and Taxation Code, payments made by an organization described in Section 501(c)(3) of the Internal Revenue Code by reason of the death, injury, wounding, or illness of an individual incurred as the result of the terrorist attacks against the United States on or after September 11, 2001, or an attack involving anthrax occurring on or after September 11, 2001, and before January 1, 2002, shall be treated as related to the purpose or function constituting the basis for that organization’s exemption under Section 501 of the Internal Revenue Code if such payments are made in good faith using reasonable and objective formula which are consistently applied.
(2) This shall apply to payments made on or after September 11, 2001.
(b) For purposes of the Internal Revenue Code of 1986, as applicable for purposes of Part 10 (commencing with Section 17001), Part 10.2 (commencing with Section 18401), and Part 11 (commencing with Section 23001) of Division 2 of the Revenue and Taxation Code, both of the following shall apply:
(1) Gross income shall not include any amount that, but for this section, would otherwise be includable in gross income by reason of the discharge of indebtedness, in whole or in part, of any taxpayer if the discharge is by reason of the death of an individual incurred as the result of the terrorist attacks against the United States on September 11, 2001, or as a result of illness incurred as a result of an attack involving anthrax occurring on or after September 11, 2001, and before January 1, 2002.
(2) Return requirements under Section 6050P of the Internal Revenue Code shall not apply to any discharge described in paragraph (1).
(3) This subdivision shall apply to discharges made on or after September 11, 2001, and before January 1, 2002.
SEC. 8.
 This act provides for a tax levy within the meaning of Article IV of the Constitution and shall go into immediate effect.