ENGROSSED
Senate Bill No. 485
(By Senators Minard, Jenkins, Minear, Sharpe and Ross)
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[Introduced February 11, 2003; referred to the Committee on
Banking and Insurance; and then to the Committee on Finance.]
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A BILL to amend article forty-three, chapter thirty-three of the
code of West Virginia, one thousand nine hundred thirty-one,
as amended, by adding thereto a new section, designated
section four-a, relating to the authority of the commissioner
to enter into agreements and compromises.
Be it enacted by the Legislature of West Virginia:
That article forty-three, chapter thirty-three of the code of
West Virginia, one thousand nine hundred thirty-one, as amended, be
amended by adding thereto a new section, designated section four-a,
to read as follows:
ARTICLE 43. INSURANCE TAX PROCEDURES ACT.
§33-43-4a. Agreements and compromises.
(a)
Closing agreements authorized. -- Prior to commencing any
civil action, the commissioner is authorized to enter into an
agreement in writing with any person relating to the liability of such person (or of the person or estate for whom he or she acts) in
respect of any tax (including any surcharge, interest, additional
tax, fee, fine or penalty) administered by the commissioner under
this chapter for any taxable period.
(b)
Finality of closing agreement. -- If a closing agreement
is entered into by the commissioner, the agreement shall be final
and conclusive and, except upon a showing of fraud or malfeasance
or misrepresentation of a material fact:
(1) The matters so agreed upon shall not be reopened or the
agreement modified by any officer, employee or agent of this state;
and
(2) In any civil action or administrative proceeding, the
closing agreement or any determination, assessment, collection,
payment, abatement, refund or credit made in accordance therewith
shall not be annulled, modified, set aside or disregarded.
(c)
Compromises authorized. -- The commissioner may compromise
all or part of any civil case arising under the provisions of this
article. In all such matters involving issues in respect of tax
liability in controversy of fifteen thousand dollars or more for
one or all of the years involved in such matter, claim or case, the
commissioner shall seek the written recommendation of the attorney
general before entering into such compromise. Any liability for
tax (including any surcharge, interest, additional tax, fee, fine or penalty) may be compromised upon consideration of the terms and
conditions of the compromise agreement in light of any or all of
the following:
(1) Doubt as to liability;
(2) Doubt as to collectibility;
(3) Strength of the taxpayer's defenses to the assessment of
the tax, surcharge, interest, additional tax, fee, fine or penalty;
(4) Age of the dispute;
(5) The anticipated time and resources which will be required
to develop the civil action for adjudication; and
(6) Any other factor(s) relevant to the determination of
whether citizens of the state of West Virginia are best served by
entering into a compromise agreement.
(d)
Record of agreement. -- Whenever a closing agreement is
made by the commissioner under subsections (a) and (b) of this
section, there shall be placed on file in the commissioner's office
the opinion of the commissioner's legal counsel (with his or her
reasons therefor), together with a statement of:
(1) The amount of tax, surcharge, additional tax, fee and
interest assessed;
(2) The anticipated fine or penalty imposed by law on the
person against whom the tax, surcharge, additional tax, fee and
interest was assessed; and
(3) The amount actually paid in accordance with the terms of
the closing agreement.
(e)
Record of compromise. -- Whenever a compromise is made by
the commissioner under subsection (c) of this section, there shall
be placed on file in the commissioner's office the opinion of the
commissioner's legal counsel (with his or her reasons therefor) and
any written recommendation of the attorney general received
pursuant to said subsection, together with a statement of:
(1) The amount of tax, surcharge, additional tax, fee and
interest assessed;
(2) The anticipated fine or penalty imposed by law on the
person against whom the tax, surcharge, additional tax, fee and
interest was assessed; and
(3) The amount actually paid in accordance with the terms of
the compromise.
Notwithstanding the foregoing provisions of this subsection
and subsection (d) of this section, no opinion of the
commissioner's legal counsel nor written recommendation of the
attorney general shall be required with respect to any closing
agreement or compromise of any civil case in which the amount of
tax assessed (including any surcharge, interest, additional tax,
fee, fine or penalty) is less than one thousand dollars.
(f)
Report to Legislature. -- The commissioner shall submit to the speaker of the House of Delegates, the president of the Senate
and the legislative auditor a quarterly report summarizing the
issues and amounts of liabilities contained in the agreements and
compromises into which he or she has entered pursuant to this
section. The report shall be in a form which preserves the
confidentiality of the identity of the taxpayers involved in the
agreements and compromises. Notwithstanding any other provision of
law to the contrary, the agreements and compromises entered into
pursuant to this section shall be subject to audit, in their
entirety, by the legislative auditor.
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