California Assembly Bill AB2225 Amended / Bill

 BILL NUMBER: AB 2225AMENDED BILL TEXT AMENDED IN ASSEMBLY MARCH 29, 2012 INTRODUCED BY Assembly Member Perea FEBRUARY 24, 2012  An act relating to taxation.   An act to amend Sections 9274, 30459.4, 32474, 40214, 41174, 43525, 45870, 46625, 50156.14, 55335, and 60633.1 of the Revenue and Taxation Code, relating to taxation.  LEGISLATIVE COUNSEL'S DIGEST AB 2225, as amended, Perea.  Taxation: cancellation of indebtedness: mortgage debt forgiveness.   State Board of Equalization:   erroneous charges.   Existing law requires the State Board of Equalization to administer the Sales and Use Tax Law, Use Fuel Tax Law, Cigarette and Tobacco Products Tax Law, Alcoholic Beverage Tax Law, Energy Resources Surcharge Law, Emergency Telephone Users Surcharge Act, Hazardous Substances Tax Law, Integrated Waste Management Fee Law, Oil Spill Response, Prevention, and Administration Fees Law, Underground Storage Tank Maintenance Fee Law, Fee Collection Procedures Law, and Diesel Fuel Tax Law, and authorizes the board to undertake collection action on delinquent accounts, including issuing a levy or notice to withhold. Under existing sales and use tax laws, a taxpayer may file a claim with the board for reimbursement of bank charges or any other reasonable 3rd-party check charge fees incurred by the taxpayer as a direct result of an erroneous levy or notice to withhold by the board or erroneous processing or collection action, within 90 days of the date of the board action. Under the other laws, a taxpayer may only file a claim for those charges or fees incurred as a direct result of an erroneous levy or notice to withhold.   This bill would extend to those other laws, the authorization for a taxpayer to also file a reimbursement claim with the board for bank charges and other reasonable 3rd-party check charge fees incurred as a direct result of an erroneous processing action or erroneous collection action by the board within 90 days of the board action. This bill would also, under those other laws, allow the board to extend the 90-day filing period for reasonable cause.   The Personal Income Tax Law conforms to specified provisions of the federal Mortgage Forgiveness Debt Relief Act of 2007, as amended by the federal Emergency Economic Stabilization Act of 2008, relating to the exclusion of the discharge of qualified principal residence indebtedness, as defined, from an individual's income if that debt is discharged after January 1, 2007, and before January 1, 2013, as provided.   This bill would make findings and declarations regarding mortgage debt forgiveness and would state the intent of the Legislature to enact legislation that would conform to federal law with regard to any extension of the exclusion described above.  Vote: majority. Appropriation: no. Fiscal committee:  no   yes  . State-mandated local program: no. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:  SECTION 1.   Section 9274 of the   Revenue and Taxation Code   is amended to read:  9274. (a) A taxpayer may file a claim with the board 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 board. 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 for reimbursement by the financial institution or third party. Each claimant applying for reimbursement shall file a claim with the board that shall be in a form as may be prescribed by the board. In order for the board to grant a claim, the board shall determine that both of the following conditions have been satisfied: (1) The erroneous levy or notice to withhold was caused by board error  , erroneous processing action, or erroneous collection action  . (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 board and provided the board with any requested information or documentation sufficient to establish the taxpayer's position. This provision may be waived by the board for reasonable cause. (b) Claims pursuant to this section shall be filed within 90 days from the date of the  erroneous  levy or notice to withhold  , erroneous processing action, or erroneous collection action. This 90-day filing period may be extended by the board for reasonable cause  . Within 30 days from the date the claim is received, the board shall respond to the claim. If the board denies the claim, the taxpayer shall be notified in writing of the reason or reasons for the denial of the claim.  SEC. 2.   Section 30459.4 of the   Revenue and Taxation Code   is amended to read:  30459.4. (a) A taxpayer may file a claim with the board 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 board. 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 for reimbursement by the financial institution or third party. Each claimant applying for reimbursement shall file a claim with the board that shall be in a form as may be prescribed by the board. In order for the board to grant a claim, the board 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 board 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 board and provided the board with any requested information or documentation sufficient to establish the taxpayer's position. This provision may be waived by the board for reasonable cause. (b) Claims pursuant to this section shall be filed within 90 days from the date of the  erroneous  levy or notice to withhold  , erroneous processing action, or erroneous collection action. This 90-day filing period may be extended by the board for reasonable cause  . Within 30 days from the date the claim is received, the board shall respond to the claim. If the board denies the claim, the taxpayer shall be notified in writing of the reason or reasons for the denial of the claim.  SEC. 3.   Section 32474 of the   Revenue and Taxation Code   is amended to read:  32474. (a) A taxpayer may file a claim with the board 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 board. 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 for reimbursement by the financial institution or third party. Each claimant applying for reimbursement shall file a claim with the board that shall be in a form as may be prescribed by the board. In order for the board to grant a claim, the board 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 board 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 board and provided the board with any requested information or documentation sufficient to establish the taxpayer's position. This provision may be waived by the board for reasonable cause. (b) Claims pursuant to this section shall be filed within 90 days from the date of the  erroneous  levy or notice to withhold  , erroneous processing action, or erroneous collection action. This 90   -day filing period may be extended by the board for reasonable cause  . Within 30 days from the date the claim is received, the board shall respond to the claim. If the board denies the claim, the taxpayer shall be notified in writing of the reason or reasons for the denial of the claim.  SEC. 4.   Section 40214 of the  Revenue and Taxation Code   is amended to read:  40214. (a) A taxpayer may file a claim with the board 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 board. 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 for reimbursement by the financial institution or third party. Each claimant applying for reimbursement shall file a claim with the board that shall be in a form as may be prescribed by the board. In order for the board to grant a claim, the board 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 board 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 board and provided the board with any requested information or documentation sufficient to establish the taxpayer's position. This provision may be waived by the board for reasonable cause. (b) Claims pursuant to this section shall be filed within 90 days from the date of the  erroneous  levy or notice to withhold  , erroneous processing action, or erroneous collection action. This 90-day filing period may be extended by the board for reasonable cause  . Within 30 days from the date the claim is received, the board shall respond to the claim. If the board denies the claim, the taxpayer shall be notified in writing of the reason or reasons for the denial of the claim.  SEC. 5.   Section 41174 of the   Revenue and Taxation Code   is amended to read:  41174. (a) A taxpayer may file a claim with the board 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 board. 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 for reimbursement by the financial institution or third party. Each claimant applying for reimbursement shall file a claim with the board that shall be in a form as may be prescribed by the board. In order for the board to grant a claim, the board 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 board 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 board and provided the board with any requested information or documentation sufficient to establish the taxpayer's position. This provision may be waived by the board for reasonable cause. (b) Claims pursuant to this section shall be filed within 90 days from the date of the  erroneous  levy or notice to withhold  , erroneous processing action, or erroneous collection action. This 90-day filing period may be extended by the board for reasonable cause . Within 30 days from the date the claim is received, the board shall respond to the claim. If the board denies the claim, the taxpayer shall be notified in writing of the reason or reasons for the denial of the claim.  SEC. 6.   Section 43525 of the   Revenue and Taxation Code   is amended to read:  43525. (a) A taxpayer may file a claim with the board 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 board. 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 for reimbursement by the financial institution or third party. Each claimant applying for reimbursement shall file a claim with the board that shall be in a form as may be prescribed by the board. In order for the board to grant a claim, the board 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 board 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 board and provided the board with any requested information or documentation sufficient to establish the taxpayer's position. This provision may be waived by the board for reasonable cause. (b) Claims pursuant to this section shall be filed within 90 days from the date of the  erroneous  levy or notice to withhold  , erroneous processing action, or erroneous collection action. This 90-day filing period may be extended by the board for reasonable cause  . Within 30 days from the date the claim is received, the board shall respond to the claim. If the board denies the claim, the taxpayer shall be notified in writing of the reason or reasons for the denial of the claim.  SEC. 7.   Section 45870 of the   Revenue and Taxation Code   is amended to read:  45870. (a) A feepayer may file a claim with the board 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 board. 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 feepayer and not waived for reimbursement by the financial institution or third party. Each claimant applying for reimbursement shall file a claim with the board that shall be in a form as may be prescribed by the board. In order for the board to grant a claim, the board 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 board error. (2) Prior to the  erroneous  levy or notice to withhold  ,   erroneous processing action, or erroneous collection action  , the feepayer responded to all contacts by the board and provided the board with any requested information or documentation sufficient to establish the feepayer's position. This provision may be waived by the board for reasonable cause. (b) Claims pursuant to this section shall be filed within 90 days from the date of the  erroneous  levy or notice to withhold  , erroneous processing action, or erroneous collection action. This 90-day filing period may be extended by the board for reasonable cause  . Within 30 days from the date the claim is received, the board shall respond to the claim. If the board denies the claim, the feepayer shall be notified in writing of the reason or reasons for the denial of the claim.  SEC. 8.   Section 46625 of the   Revenue and Taxation Code   is amended to read:  46625. (a) A feepayer may file a claim with the board for reimbursement of bank charges and any other reasonable third-party check charge fees that are incurred by the feepayer as the direct result of an erroneous levy or notice to withhold  , erroneous processing action, or erroneous collection action  by the board. Bank and third-party charges include a financial institution's or third party's customary charge for complying with either a levy or instructions in a notice to withhold, 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  . Bank charges include only those charges that are paid by the feepayer and not waived for reimbursement by the financial institution or third party. Each claimant applying for reimbursement pursuant to this section shall file a claim with the board that shall be in the form as may be prescribed by the board. The board shall not grant a claim unless it determines that both of the following conditions have been satisfied: (1) The erroneous levy or notice to withhold  , erroneous processing action, or erroneous collection action  resulted from board error. (2) Prior to the  erroneous  levy or notice to withhold  , erroneous processing action, or erroneous collection action  , the feepayer responded to all contacts by the board and provided the board with any requested information or documentation that was sufficient to establish the feepayer's position. The requirement of this paragraph may be waived by the board for reasonable cause. (b) Claims pursuant to this section shall be filed within 90 days from the date of the  erroneous  levy or notice to withhold  that is asserted to be erroneous.  , erroneous processing action, or erroneous collection action. This 90-day filing   period may be extended by the board for reasonable cause.  The board shall respond to a claim filed pursuant to this section within 30 days of receipt. If the board denies a claim, the taxpayer shall be notified in writing of the reason or reasons for denial.  SEC. 9.   Section 50156.14 of the   Revenue and Taxation Code   is amended to read:  50156.14. (a) A feepayer may file a claim with the board 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 board. 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 to the feepayer and not waived for reimbursement by the financial institution or third party. Each claimant applying for reimbursement shall file a claim with the board that shall be in a form as may be prescribed by the board. In order for the board to grant a claim, the board 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 board error. (2) Prior to the  erroneous  levy or notice to withhold  ,   erroneous processing action, or erroneous collection action  , the feepayer responded to all contacts by the board and provided the board with any requested information or documentation sufficient to establish the feepayer's position. This provision may be waived by the board for reasonable cause. (b) Claims pursuant to this section shall be filed within 90 days from the date of the  erroneous  levy or notice to withhold  , erroneous processing action, or erroneous collection action. This 90-day filing period may be extended by the board for reasonable cause  . Within 30 days from the date the claim is received, the board shall respond to the claim. If the board denies the claim, the feepayer shall be notified in writing of the reason or reasons for the denial of the claim.  SEC. 10.   Section 55335 of the   Revenue and Taxation Code   is amended to read:  55335. (a) A taxpayer may file a claim with the board 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 board. 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 for reimbursement by the financial institution or third party. Each claimant applying for reimbursement shall file a claim with the board that shall be in a form as may be prescribed by the board. In order for the board to grant a claim, the board 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 board 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 board and provided the board with any requested information or documentation sufficient to establish the taxpayer's position. This provision may be waived by the board for reasonable cause. (b) Claims pursuant to this section shall be filed within 90 days from the date of the  erroneous  levy or notice to withhold  , erroneous processing action, or erroneous collection action. This 90-day filing period may be extended by the board for reasonable cause  . Within 30 days from the date the claim is received, the board shall respond to the claim. If the board denies the claim, the taxpayer shall be notified in writing of the reason or reasons for the denial of the claim.  SEC. 11.   Section 60633.1 of the   Revenue and Taxation Code   is amended to read:  60633.1. (a) A taxpayer may file a claim with the board 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 board. 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 for reimbursement by the financial institution or third party. Each claimant applying for reimbursement shall file a claim with the board that shall be in a form as may be prescribed by the board. In order for the board to grant a claim, the board 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 board 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 board and provided the board with any requested information or documentation sufficient to establish the taxpayer's position. This provision may be waived by the board for reasonable cause. (b) Claims pursuant to this section shall be filed within 90 days from the date of the  erroneous levy or notice to withhold  , erroneous processing action, or erroneous collection action. This 90-day filing period may be extended by the board for reasonable cause  . Within 30 days from the date the claim is received, the board shall respond to the claim. If the board denies the claim, the taxpayer shall be notified in writing of the reason or reasons for the denial of the claim.  SECTION 1.   The Legislature finds and declares all of the following: (a) A homeowner can lose his or her job or become seriously ill and then be unable to pay the monthly mortgage. In the resulting short sale or foreclosure, the homeowner not only loses his or her home, but may also be taxed on relief of indebtedness income that the homeowner did not receive. (b) If the homeowner refinances his or her mortgage, as many homeowners do, the nature of the debt is changed and the homeowner may be personally liable for the payment of that debt. (c) Absent an extension of the debt forgiveness protections beyond this year, homeowners will again be subject to taxation on income they never actually received.   SEC. 2.   It is the intent of the Legislature to enact legislation that would extend the operation of Section 17144.5 of the Revenue and Taxation Code, relating to the exclusion of the discharge of qualified principal residence indebtedness from an individual's income, to conform to any federal legislation that extends the operation of this exclusion in federal income tax law.