H. B. 4015
(By Mr. Speaker, Mr. Kiss, and Delegate Trump)
[By Request of the Executive]
[Introduced January 14, 2004; referred to the
Committee on Finance.]
A BILL to amend the code of West Virginia, 1931, as amended, by
adding thereto a new article, designated §11-10D-1, §11-10D-2,
§11-10D-3, §11-10D-4, §11-10D-5, §11-10D-6, §11-10D-7, §11-
10D-8, §11-10D-9, §11-10D-10, §11-10D-11, §11-10D-12 and §11-
10D-13, all relating generally to granting persons who owe but
have not paid one or more taxes administered under West
Virginia tax procedure and administration act an amnesty
period during which past due taxes may be paid or payment
agreements acceptable to tax commissioner executed; providing
for waiver of additions to tax, money penalties and fifty
percent of accrued interest on past due taxes when taxes for
which amnesty is granted are paid within one month after tax
amnesty period closes or paid pursuant to payment agreements
executed during amnesty period; prohibiting criminal
prosecution for default for which tax amnesty is granted; providing for a penalty of twenty-five percent when person
fails to take advantage of this amnesty program; setting forth
legislative findings and declarations; establishing
requirements of and exceptions and limitations to tax amnesty
program; defining certain terms; authorizing tax commissioner
to do all things necessary to implement two-month tax amnesty
program during current calendar year, including, but not
limited to, issuance of emergency legislative rules;
suspending language of code that is inconsistent or conflicts
with language creating tax amnesty program; and requiring tax
commissioner to report certain information to Legislature and
governor after conclusion of tax amnesty program.
Be it enacted by the Legislature of West Virginia:
That the code of West Virginia, 1931, as amended, be amended
by adding thereto a new article, designated §11-10D-1, §11-10D-2,
§11-10D-3, §11-10D-4, §11-10D-5, §11-10D-6, §11-10D-7, §11-10D-8,
§11-10D-9, §11-10D-10, §11-10D-11, §11-10D-12 and §11-10D-13, all
to read as follows:
ARTICLE 10D. TAX AMNESTY PROGRAM.
§11-10D-1. Short title.
This article may be cited as the "West Virginia Tax Amnesty
Program of 2004."
§11-10D-2. Legislative intent and findings.
(a)
Intent. -- It is the intent of the Legislature in enacting the tax amnesty program provided by this article, to improve
compliance with this state's tax laws and to accelerate and
increase collections of certain taxes currently owed to this state.
(b)
Findings. -- The Legislature finds and declares that a
public purpose is served by the waiver of tax penalties, additions
to tax, a portion of accrued interest, and criminal prosecution in
return for the immediate reporting and payment of previously
underreported, unreported, unpaid or underpaid tax liabilities that
are due and owing and are delinquent as of the first day of
January, two thousand four. Benefits gained by this program
include, among other things, accelerated receipt of certain
currently owed taxes, permanently bringing into the tax system
taxpayers who have been evading tax and providing an opportunity
for taxpayers to clear their records and satisfy tax obligations.
It is further the intent of the Legislature in enacting this
article that the tax amnesty program be a one-time occurrence which
shall not be repeated in the future, since taxpayers' expectations
of future amnesty programs could have a counterproductive effect on
compliance today.
§11-10D-3. Definitions.
(a)
General rule. -- Terms used in this article shall have the
meaning ascribed to them in section four, article ten of this
chapter, unless the context in which the term is used in this
article clearly requires a different meaning, or the term is defined in subsection (b) of this section.
(b)
Terms defined. -- For purposes of this article, the term:
(1) "Additions to tax" means that amount imposed by section
eighteen, or eighteen-a, article ten of this chapter, for failure
to file a return or pay tax due, or for negligence or intentional
disregard of rules and regulations of the tax commissioner, for
filing a false or fraudulent return, or for failure to pay
estimated tax, and includes "additions to tax" imposed by any other
article of chapter eleven of the code administered under article
ten of this chapter;
(2) "Applicant" means any person who timely files an
application for amnesty under this article;
(3) "Interest" means interest imposed pursuant to sections
seventeen and seventeen-a, article ten of this chapter;
(4) "Penalty" means civil money penalties imposed by section
nineteen, article ten of this chapter, and any other civil money
penalty imposed by any article of this chapter administered under
article ten;
(5) "Specified tax" shall mean the tax or taxes and the
periods thereof for which the taxpayer applies for amnesty under
this article.
§11-10D-4. Development and administration of tax amnesty program,
implementation of article.
(a)
General. -- The tax commissioner shall develop and administer the tax amnesty program provided in this article,
notwithstanding any provision of this article to the contrary. The
tax commissioner shall develop and issue the forms, instructions
and guidelines as the commissioner believes to be necessary, and
take any other action needed to implement this article.
(b)
Rules. - The tax commissioner may promulgate rules,
including emergency rules, that implement, clarify or explain the
tax amnesty program, in the manner provided in article three,
chapter twenty-nine-a of this code.
§11-10D-5. Duration and application of program.
The tax commissioner shall establish a two-month tax amnesty
program to be conducted during the calendar year, two thousand
four. The program shall apply to payments and returns required
pursuant to any tax administered under article ten of this chapter,
but only if the obligation for payment or filing of a return, or
both, arose after the first day of January, one thousand nine
hundred eighty-six, and prior to the first day of January, two
thousand four, provided: (1) The tax return was due before the
first day of January, two thousand four; (2) the amount of tax
shown to be due on the tax return was due and payable to the tax
commissioner before the first day of January, two thousand four; or
(3) if no tax return was required by law to be filed, the tax was
due and payable to the tax commissioner before the first day of
January, two thousand four.
§11-10D-6. Waiver of penalties; criminal immunity; exceptions and
limitations.
(a)
Waiver of penalty, addition to tax and interest. -- For
any taxpayer who meets the requirements of section seven of this
article, and except as otherwise specifically provided in this
article:
(1)
Waiver. -- The tax commissioner shall waive all penalties
and additions to tax and fifty percent of the interest imposed on
the late filing of a return or the late payment of any tax for
which tax amnesty is granted, which is owed as a result of
nonpayment, underpayment, nonreporting or underreporting of tax
liabilities; and
(2)
Criminal penalties. -- No criminal action may be brought
against the taxpayer for the default for which tax amnesty is
granted under this article.
(b)
Exceptions. -- This section does not apply to nonpayment
or underpayment of tax liabilities, or to nonreported, misreported
or underreported tax liabilities for which amnesty is sought if, as
of the date the taxpayer's application for amnesty is filed:
(1) The taxpayer is the subject of a criminal investigation by
any agency of this state; or
(2) An administrative proceeding, or a civil or criminal court
proceeding has been initiated or is pending in any administrative
agency or court of this state or of the United States for nonpayment, delinquency, fraud or other event of noncompliance in
relation to any of the taxes administered under article ten of this
chapter. An administrative or civil proceeding shall not be deemed
to be pending if the taxpayer withdraws with prejudice from the
proceeding prior to the granting of amnesty, pays in full the
outstanding tax liability plus fifty percent of the accrued
interest thereon and otherwise cures any default which is the
subject of the proceeding.
(c)
No refund or credit. -- No refund or credit may be granted
for any penalty, addition to tax or interest paid prior to the date
the taxpayer files his or her application for tax amnesty pursuant
to section seven of this article. Additionally, no refund or
credit shall be granted for any tax or interest paid under this
program unless the tax commissioner, on his or her own motion,
redetermines the amount of tax or accrued interest thereon.
(d)
Bar to amnesty. -- A taxpayer shall not be eligible for
amnesty for any tax liability if the taxpayer has other liabilities
outstanding for any tax administered under article ten of this
chapter, for which the taxpayer has not applied for amnesty. This
includes tax deficiencies pending before the office of tax appeals
or a court in this state.
§11-10D-7. Application for amnesty; requirements; deficiency
assessment.
(a)
Timely application required. -- The provisions of this article apply to any taxpayer who, on or after the date of
commencement of the tax amnesty program and on or before the
termination date of the program designated by the tax commissioner,
files an application for tax amnesty on or before the last day of
the second calendar month of the amnesty program and does the
following:
(1) Voluntarily completes, signs and files amended tax returns
to report transactions and other material matters not included on
original returns and pays in full all additional taxes shown to be
due on the amended return or returns and fifty percent of the
interest imposed on the additional taxes by article ten of this
chapter;
(2) Voluntarily completes, signs and files all delinquent tax
returns and pays in full all taxes shown to be due on the return or
returns and fifty percent of the interest imposed on the taxes by
article ten of this chapter;
(3) Voluntarily completes, signs and files amended tax returns
to correct all incorrect, deficient or incomplete original returns
and pays in full all taxes shown to be due on the amended return or
returns and fifty percent of the interest imposed on the tax or
taxes by article ten of this chapter; and
(4) Voluntarily pays in full all previously assessed tax
liabilities and other taxes legally collectible under section
eleven, article ten of this chapter, and fifty percent of the interest due thereon imposed by article ten of this chapter.
(b)
Due date of tax for which amnesty granted. -- Except as
provided in subsection (d) below, all taxes for which tax amnesty
is sought plus fifty percent of interest accrued to the date of
payment shall be paid not later than last day of the month next
succeeding the termination of the amnesty program. Interest on the
amount of tax due shall be calculated as prescribed in article ten
of this chapter and shall continue to accrue until the tax
liability is paid.
(c)
Payments. -- Payments made by the taxpayer under this tax
amnesty program shall be in United States currency or by certified
check, cashier's check or post office money order, payable to the
tax commissioner of this state.
(d)
Installment payment agreements. -- The tax commissioner
may, at his or her discretion and upon such terms and conditions as
the commissioner may prescribe, enter into an installment payment
agreement with the taxpayer, which installment payment agreement
shall be in lieu of the full immediate payment required by
subsection (b) of this section:
Provided, That the length of the
installment payment may not exceed twelve months.
(1) Each installment payment agreement shall provide for
payment of the tax due and fifty percent of the statutory interest
on the outstanding amount of tax due, computed to the date the
installment payment agreement is executed by the taxpayer. The amount of tax and interest due from the taxpayer shall be stated in
the installment payment agreement and constitute the installment
payment agreement amount.
(2)
Down payment. -- The installment payment agreement shall
require payment of twenty-five percent of the installment payment
agreement amount or one thousand dollars, whichever amount is the
greater, at the time the installment payment agreement is submitted
to the tax commissioner for acceptance and signature.
(3)
Interest. -- Interest on the installment payment agreement
amount shall be calculated at the rates determined under sections
seventeen and seventeen-a, article ten of this chapter, as
applicable to the installment payment period, and shall accrue on
the declining balance of the installment payment agreement amount
from the date the installment payment agreement is signed by the
taxpayer to the date the last installment payment is made by the
taxpayer.
(4)
Lien securing payment. -- When payments are made under an
installment payment agreement, the amount due shall be secured by
recordation of a tax lien against the property of the taxpayer and
recordation of a tax lien against the property of any person
guaranteeing payment of the installment payment agreement amount,
should there be a guarantor, unless the tax commissioner determines
that existing recorded tax liens are adequate to secure the
payment. Liens required by this subdivision shall be recorded in each county of this state in which the taxpayer and the guarantor,
if any, owns an interest in property and shall be released by the
tax commissioner upon full payment of the amount stated in the
installment payment agreement plus applicable interest.
(5)
Failure to comply with installment payment agreement. --
Failure of the taxpayer to fully comply with the terms of the
installment payment agreement shall render the waiver of penalties,
additions to tax and interest under this amnesty program null and
void, unless the tax commissioner determines that the failure was
due to reasonable cause. In the event of an unexcused
noncompliance with the terms of the installment payment agreement,
the taxpayer shall immediately pay the unpaid balance of the
installment payment agreement amount plus the interest and all
additions to tax and penalties waived under section six of this
article.
(6)
Late payment of installment payment. -- Notwithstanding
subdivision (5) of this subsection (d), payment of an installment
payment after the date the installment payment is due under the
installment payment agreement shall not void the agreement provided
the amount of the installment payment, plus a late payment fee of
ten dollars or one half of one percent of the amount of the late
installment payment, whichever is the greater amount, is paid
within twenty days after the installment payment was due under the
installment payment agreement.
(7)
Failure to timely pay current taxes. -- If a taxpayer with
an installment payment agreement fails to timely file returns and
remit current tax liabilities by their statutory due date or dates,
the installment payment agreement shall be rendered null and void,
unless the tax commissioner determines that the failure was due to
reasonable cause. In the event an installment payment agreement
becomes null and void, taxpayer shall immediately pay the unpaid
balance of the installment payment agreement plus interest and all
additions to tax and penalties waived when the tax commissioner
accepted the installment payment agreement.
(e)
Understatement of tax due. -- If, subsequent to
termination of this tax amnesty program, the tax commissioner
determines there was a defect in the amnesty application or in the
materials submitted in support of the amnesty application and
subsequently issues a deficiency assessment upon the application or
a return or amended return filed pursuant to this article, the tax
commissioner has the authority to collect the additional tax due,
impose applicable penalties, additions to tax and interest and to
pursue any criminal prosecution as may ordinarily be brought with
respect to the defect as if no amnesty had been granted the
taxpayer.
(f)
Mistake or misrepresentation of material fact. -- The tax
commissioner may review all cases in which amnesty has been granted
and may on the basis of a mistake or misrepresentation of a material fact, rescind the grant of amnesty, or in lieu thereof,
appropriate review of the grant of amnesty may be obtained by
proceeding under article nine or ten, or both, of this chapter.
The taxpayer may appeal the tax commissioner's order rescinding the
grant of amnesty by filing a petition for appeal with the office of
tax appeals, established in article ten-a of this chapter, within
thirty days after receipt of the tax commissioner's order, which
shall be served by personal service or by certified mail.
(g)
False or fraudulent amnesty return. -- Any taxpayer who
files an amnesty tax return or amended return that is false or
fraudulent shall be subject to applicable civil penalties and be
referred for criminal prosecution.
(h)
Attempt to evade or defeat tax. -- Any taxpayer who files
a false amnesty application or attempts in any manner to defeat or
evade payment of tax or interest under this amnesty program, shall
be subject to applicable civil penalties and be referred for
criminal prosecution.
§11-10D-8. Publicity efforts.
The tax commissioner shall cause the tax amnesty program to be
adequately publicized so as to maximize public awareness of and
participation in the program.
§11-10D-9. Examination of amnesty returns and taxpayer books and
records.
Nothing in this article shall prevent the tax commissioner or any authorized employee or agent of the commissioner from examining
the books, paper, records and equipment of any taxpayer or other
person in order to verify the accuracy and completeness of the
application for amnesty or of any tax return filed or payment made
under this article, as provided in article ten of this chapter, and
to ascertain and assess any tax or other liability owed to the
state for any tax administered under article ten of this chapter.
§11-10D-10. Disposition of revenue collected.
There is hereby created in the state treasury a special fund
to be known as the "tax amnesty fund" into which shall be deposited
all payments received under the tax amnesty program. On a monthly
basis, the tax amnesty fund shall be distributed as follows:
(1)
Dedicated taxes. -- A dedicated tax and applicable
interest collected under the tax amnesty program shall be deposited
in the fund or account in which the tax would have been deposited
had the tax been timely paid; and
(2)
Other taxes. -- After complying with subdivision (1), all
other funds collected under the tax amnesty program shall be
deposited into the general revenue fund.
§11-10D-11. Penalty on liabilities eligible for amnesty for which
taxpayer did not apply for amnesty.
Notwithstanding any provision of this code to the contrary, if
a taxpayer has a liability that is eligible for amnesty under this
article but the taxpayer fails to apply for amnesty within the designated amnesty period, or, after applying for amnesty, fails to
satisfy all of the requirements for amnesty, then a twenty-five
percent penalty shall be added to the amount of any unpaid taxes
eligible for amnesty. This nonwaivable penalty also applies to any
eligible delinquency or underpayment of tax discovered after
amnesty ends. The tax commissioner shall have no authority to
waive this penalty, either in whole or in part.
§11-10D-12. Report to Legislature and Governor.
On or before the first day of July, two thousand five, the tax
commissioner shall issue a report to the Legislature and the
governor detailing the implementation and results of the tax
amnesty program provided in this article. This report shall
include, but not be limited to, the following information:
(1) A detailed breakdown of the tax commissioner's
administrative costs in implementing the program;
(2) The total number of tax amnesty returns filed, by tax and
by whether the returns are new returns or amended returns;
(3) The gross tax amnesty revenues collected by tax, which
shall also be broken down into the following categories:
(A) Amounts represented by assessments made, but not
finalized, and by liens filed by the tax commissioner before the
first day of the amnesty period; and
(B) All other amounts;
(4) The total dollar amount of revenue collected by the program to a date no earlier than thirty days before the date of
the report required by this section, which shall be further
allocated by type of tax, interest on the tax to which the payment
relates;
(5) The total amount of interest forgiven under the program;
(6) The total amount of additions to tax forgiven under the
program;
(7) The total amount of penalties (not including additions to
tax or interest) collected under the program; and
(8) Any other statistical information that the tax
commissioner determines to be necessary to measure the net impact
of this tax amnesty program.
§11-10D-13. Suspension of inconsistent code provisions.
All provisions of article ten, chapter eleven of this code,
and all provisions of tax statutes administered under article ten
of this chapter that are inconsistent with the provisions of this
article are suspended to the extent necessary to carry out the
provisions of this article.
NOTE: The purpose of this bill is to create a tax amnesty
program to be administered by the Tax Commissioner for a 2-month
period during calendar year 2004. Tax liabilities eligible for
this amnesty program include any tax collected by the Tax
Commissioner pursuant to the West Virginia Tax Procedure and
Administration Act, W.Va. Code §11-10-1
et seq., that was due and
payable before and delinquent before January 1, 2004. Generally,
a person who applies for amnesty during the amnesty period will be
able to pay the amount of taxes that are due and owing and have 50
percent of the accrued interest waived; 100 percent of all additions to tax and penalties waived, and avoid criminal
prosecution. The amount due must be paid in full within one month
after the close of the amnesty period, unless an installment
payment agreement is executed. Persons who apply for amnesty must
include in their applications all taxes for which they have
additional liability. If at the time the application for amnesty
is filed the applicant is contesting the liability for additional
taxes in the Office of Tax Appeals or in any court of this state,
the applicant must withdraw with prejudice all appeals before
amnesty will be granted. If an applicant enters into an
installment payment agreement and then defaults on complying with
the terms of that agreement, the waiver of interest, additions to
tax and penalties is revoked. If a person owes additional taxes
that are eligible for amnesty but fails to take advantage of the
tax amnesty program, then a nonwaivable penalty equal to
twenty-five percent of the additional tax due would be added to the
amount due. The Tax Commissioner would be required to issue a
report to the Legislature and to the Governor, by July 1, 2005,
discussing implementation and results of the tax amnesty program.
§§11-10D-1 through 13 is new; therefore, strike-throughs and
underscoring have been omitted.
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