CS/HB 507 2023
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
A bill to be entitled 1
An act relating to the federal taxation; creating s. 2
17.45, F.S.; providing definitions; authorizing the 3
Chief Financial Officer to reimburse an owner of a 4
small business attorney fees and costs from the 5
Internal Revenue Service Civil Liability Trust Fund 6
under certain conditions; requiring the Department of 7
Financial Services to certify certain information 8
before such reimbursement; providing that the identi ty 9
of a small business is not affected by certain 10
changes; requiring the department to adopt rules; 11
creating s. 72.042, F.S.; providing for an action in 12
circuit court for an award of attorney fees and costs, 13
actual damages, and punitive damages when the In ternal 14
Revenue Service is found to have committed certain 15
violations; requiring an action brought in circuit 16
court to be filed within a specified period; amending 17
s. 212.134, F.S.; making grammatical changes; 18
providing definitions; providing that certain t hird 19
party settlement organizations are required to submit 20
certain information to the Department of Revenue only 21
for participating payees in this state if certain 22
conditions are met and subject to certain limitations; 23
requiring certain third party settleme nt organizations 24
to create and maintain certain records; amending s. 25
CS/HB 507 2023
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
655.045, F.S.; requiring a report submitted by a 26
financial institution to the Financial Services 27
Commission to include certain information received 28
from the Internal Revenue Service; requ iring the 29
Office of Financial Regulation to submit an annual 30
report to the commission and Legislature by a 31
specified date; providing an effective date. 32
33
Be It Enacted by the Legislature of the State of Florida: 34
35
Section 1. Section 17.45, Florida St atutes, is created to 36
read: 37
17.45 Reimbursement for retaliatory taxation proceedings. — 38
(1) As used in this section, the term: 39
(a) "Domiciled in this state" means authorized to do 40
business in this state and located in this state. 41
(b) "Retaliatory" m eans any proceeding initiated in part 42
to discriminate against or target a taxpayer on the basis of his 43
or her political affiliation, ideology, or beliefs, as 44
determined by a court of competent jurisdiction. 45
(c) "Small business" means any business entity, regardless 46
of corporate structure, that is domiciled in this state, that 47
employs 50 or fewer employees, and that generated an average 48
annual gross revenue of $4 million or less per year for the 49
preceding 2 years. 50
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(d) "Trust fund" means The Internal Rev enue Service Civil 51
Liability Trust Fund created under s. 17.44. 52
(2) Any owner of a small business against which the 53
Internal Revenue Service initiates proceedings in the United 54
States Tax Court may submit an application to the department for 55
reimbursement of reasonable attorney fees and costs necessarily 56
incurred in the proceedings, provided that all of the following 57
criteria have been satisfied: 58
(a) The small business owner is the prevailing party in 59
the proceeding before the United States Tax Court. 60
(b) The United States Tax Court determines that the 61
proceedings were retaliatory. 62
(c) The application is accompanied by a copy of the 63
attorney's retainer agreement and fee or billing statements for 64
the entire period of representation in the proceedings before 65
the United States Tax Court. 66
(d) The application and accompanying documentation is 67
submitted to the department within 90 days after receipt of a 68
final order or other pleading concluding the proceedings before 69
the United States Tax Court. 70
(e) The small business owner has not been previously 71
awarded attorney fees or costs related to the proceedings before 72
the United States Tax Court. 73
(3) If the criteria in subsection (2) are met, the 74
department shall certify the amount of the reimbursement and the 75
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
name of the applicant to the Chief Financial Officer, who shall 76
reimburse the applicant from the trust fund. 77
(4) For purposes of this section, the identity of a small 78
business is not affect ed by a change in name or by a change in 79
personnel. 80
(5) The department shall adopt rules to implement this 81
section. 82
Section 2. Section 72.042, Florida Statutes, is created to 83
read: 84
72.042 Tax liabilities arising under federal law; 85
jurisdiction of circuit courts.— 86
(1) If, in connection with the collection of federal taxes 87
concerning a taxpayer domiciled in this state, an action is 88
brought in a federal district court of competent jurisdiction 89
against any officer or employee of the Internal Revenue S ervice, 90
or any independent contractor employed by the Internal Revenue 91
Service, for a violation of: 92
(a) Title VI of the Civil Rights Act of 1964; 93
(b) Title VII of the Civil Rights Act of 1964; 94
(c) Title 26 of the Internal Revenue Code of 1986, as 95
amended; 96
(d) The First Amendment to the United States Constitution; 97
(e) The Fourth Amendment to the United States 98
Constitution; or 99
(f) The Fifth Amendment to the United States Constitution, 100
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101
the taxpayer may bring an action in circuit court pursuant to 102
subsection (2) or subsection (3). 103
(2) In any action brought in a federal district court of 104
competent jurisdiction pursuant to paragraph (1)(a), paragraph 105
(1)(b), or paragraph (1)(c), upon a finding by the federal 106
district court that a violation has occur red, the circuit court 107
may award: 108
(a) Actual damages sustained by the taxpayer, which, but 109
for the actions of the Internal Revenue Service, would not have 110
been sustained. 111
(b) Attorney fees and costs. 112
(3) In any action brought in a federal district co urt of 113
competent jurisdiction pursuant to paragraph (1)(d), paragraph 114
(1)(e), or paragraph (1)(f), upon a finding by the federal 115
district court that a violation has occurred, the circuit court 116
may award: 117
(a) Actual damages sustained by the taxpayer, whic h, but 118
for the actions of the Internal Revenue Service, would not have 119
been sustained. 120
(b) Punitive damages, provided that the provisions of s. 121
768.72 are met. 122
(c) Attorney fees and costs. 123
(4) Notwithstanding any other provision of law, an action 124
filed in circuit court pursuant to this section must be filed 125
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within 2 years after the date the cause of action accrues. 126
Section 3. Subsections (1) through (4) of section 212.134, 127
Florida Statutes, are renumbered as subsections (2) through (5), 128
respectively, present subsections (1) and (2) are amended, and 129
new subsections (1) and (6) are added to that section, to read: 130
212.134 Information returns relating to payment -card and 131
third party third-party network transactions. — 132
(1) For purposes of this sectio n, the term: 133
(a) "Participating payee" has the same meaning as in s. 134
6050W of the Internal Revenue Code. 135
(b) "Payment settlement entity" has the same meaning as in 136
s. 6050W of the Internal Revenue Code. 137
(c) "Return" or "information return" means IRS Form 1099-K 138
required under s. 6050W of the Internal Revenue Code. 139
(d) "Third party network transactions" has the same 140
meaning as in s. 6050W of the Internal Revenue Code. 141
(e) "Third party settlement organization" has the same 142
meaning as in s. 6050W of the Internal Revenue Code. 143
(2)(1) For each year in which a payment settlement entity, 144
an electronic payment facilitator, or other third party 145
contracted with the payment settlement entity to make payments 146
to settle reportable payment transactions on beh alf of the 147
payment settlement entity must file a return pursuant to s. 148
6050W of the Internal Revenue Code, for participating payees 149
with an address in this state, the entity, the facilitator, or 150
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the third party must submit the information in the return to the 151
department by the 30th day after filing the federal return. The 152
format of the information returns required must be either a copy 153
of such information returns or a copy of how such information 154
return would have been filed had this section applied at the 155
federal level returns related to participating payees with an 156
address in the state . For purposes of complying with this 157
section, a third party settlement organization must submit the 158
information in the return to the department only for 159
participating payees with an address in this state whose 160
aggregate third party network transactions for goods and 161
services exceed $600 For purposes of this subsection, the term 162
"payment settlement entity" has the same meaning as provided in 163
s. 6050W of the Internal Revenue Co de. 164
(3)(2) All returns reports submitted to the department 165
under this section must be in an electronic format. 166
(6) A third party settlement organization participating in 167
a third party network transaction involving a participating 168
payee with an address in this state must create and maintain 169
records that clearly identify whether a transaction is a 170
transaction for goods or services, or both, if such information 171
is available at the time of the third party network transaction. 172
The information in the return submitted to the department under 173
subsection (2) for such entities must be limited to transactions 174
for goods and services as supported by the records under this 175
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
subsection. 176
Section 4. Subsections (3) and (4) of section 655.045, 177
Florida Statutes, are re numbered as subsections (4) and (5), 178
respectively, subsection (2) is amended, and a new subsection 179
(3) is added to that section, to read: 180
655.045 Examinations, reports, and internal audits; 181
penalty.— 182
(2)(a) Each state financial institution, subsidiary, or 183
service corporation shall submit a report, at least four times 184
each calendar year, as of such dates as the commission or office 185
determines. The report must include : 186
1. The number of inquiries, requests, summons, subpoenas, 187
or other requests for info rmation or records received from the 188
Internal Revenue Service concerning any account holder domiciled 189
in this state. 190
2. Such other information as the commission by rule 191
requires for that type of institution. 192
(b)(a) The office shall levy an administrati ve fine of up 193
to $100 per day for each day the report is past due, unless it 194
is excused for good cause. 195
(c)(b) For an intentional late filing of the report, the 196
office shall levy an administrative fine of up to $1,000 per day 197
for each day the report is p ast due. 198
(3) By January 30 of each year, the office shall submit a 199
report that contains the information from the quarterly reports 200
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required under subsection (2) to the commission, the President 201
of the Senate, and the Speaker of the House of Representativ es. 202
Section 5. This act shall take effect July 1, 2023. 203