Florida Senate - 2023 SB 372 By Senator Ingoglia 11-00516-23 2023372__ 1 A bill to be entitled 2 An act relating to federal taxation; creating s. 3 17.45, F.S.; defining terms; requiring the Chief 4 Financial Officer to reimburse an owner of a small 5 business for attorney fees and costs with funds from 6 the Internal Revenue Service Civil Liability Trust 7 Fund under certain conditions; requiring the 8 Department of Financial Services to certify certain 9 information before such reimbursement; specifying that 10 the identity of a small business is not affected by 11 certain changes; requiring the department to adopt 12 rules; creating s. 72.042, F.S.; authorizing taxpayers 13 to bring actions in circuit court for an award of 14 attorney fees and costs, actual damages, and punitive 15 damages if the Internal Revenue Service is found to 16 have committed certain violations; requiring such 17 actions to be filed within a specified timeframe; 18 amending s. 212.134, F.S.; defining terms; specifying 19 that payment settlement entities are required to issue 20 returns only to certain participating payees; 21 requiring certain payment settlement entities to 22 create and maintain specified records; amending s. 23 655.045, F.S.; requiring that reports submitted by 24 financial institutions to the Financial Services 25 Commission include certain information received from 26 the Internal Revenue Service; requiring the Office of 27 Financial Regulation to submit an annual report to the 28 commission and the Legislature by a specified date; 29 providing a contingent effective date. 30 31 Be It Enacted by the Legislature of the State of Florida: 32 33 Section 1.Section 17.45, Florida Statutes, is created to 34 read: 35 17.45Reimbursement for retaliatory taxation proceedings. 36 (1)As used in this section, the term: 37 (a)Domiciled in this state means authorized to do 38 business in this state and located in this state. 39 (b)Retaliatory means any proceeding initiated in part to 40 discriminate against or target a taxpayer on the basis of his or 41 her political affiliation, ideology, or beliefs, as determined 42 by the department. 43 (c)Small business means any business entity, regardless 44 of corporate structure, that is domiciled in this state, that 45 employs 50 or fewer employees, and that generated an average 46 annual gross revenue of $4 million or less per year for the 47 preceding 2 years. 48 (d)Trust fund means the Internal Revenue Service Civil 49 Liability Trust Fund created under s. 17.44. 50 (2)Any owner of a small business against which the 51 Internal Revenue Service initiates proceedings in the United 52 States Tax Court may submit an application to the department for 53 reimbursement of reasonable attorney fees and costs necessarily 54 incurred in the proceedings, provided that all of the following 55 criteria have been satisfied: 56 (a)The small business owner is the prevailing party in a 57 proceeding before the United States Tax Court. 58 (b)The attorney representing the small business owner 59 before the United States Tax Court certifies, in writing, that 60 there is a good faith belief that the proceedings were 61 retaliatory. 62 (c)The application is accompanied by a copy of the 63 attorneys 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 are 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 must certify the amount of the reimbursement and the 75 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 affected 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 72.042Tax 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 Service, 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 Constitution; 98 or 99 (f)The Fifth Amendment to the United States Constitution, 100 101 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 occurred, 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 court 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, which, 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 within 2 years after the date the cause of action accrues. 126 Section 3.Present subsections (1) through (4) of section 127 212.134, Florida Statutes, are redesignated as subsections (2) 128 through (5), respectively, a new subsection (1) and subsection 129 (6) are added to that section, and present subsections (1) and 130 (2) of that section are amended, to read: 131 212.134Information returns relating to payment-card and 132 third-party network transactions. 133 (1)For purposes of this section, the term: 134 (a)Participating payee has the same meaning as in s. 135 6050W of the Internal Revenue Code. 136 (b)Payment settlement entity has the same meaning as in 137 s. 6050W of the Internal Revenue Code. 138 (c)Return or information return means IRS Form 1099-K 139 required under s. 6050W of the Internal Revenue Code. 140 (d)Third-party network transactions has the same meaning 141 as in s. 6050W of the Internal Revenue Code. 142 (2)(1)For each year in which a payment settlement entity, 143 an electronic payment facilitator, or other third party 144 contracted with the payment settlement entity to make payments 145 to settle reportable payment transactions on behalf of the 146 payment settlement entity must file a return pursuant to s. 147 6050W of the Internal Revenue Code, the entity, the facilitator, 148 or the third party must submit the information in the return to 149 the department by the 30th day after filing the federal return. 150 The format of the information returns required must be either a 151 copy of such information returns or a copy of such information 152 returns related to participating payees with an address in the 153 state. For purposes of complying with s. 6050W of the Internal 154 Revenue Code, a payment settlement entity is required to issue a 155 return only to those participating payees with an address in 156 this state whose aggregate transactions for goods and services 157 exceed $600 For purposes of this subsection, the term payment 158 settlement entity has the same meaning as provided in s. 6050W 159 of the Internal Revenue Code. 160 (3)(2)All returns reports submitted to the department 161 under this section must be in an electronic format. 162 (6)A payment settlement entity participating in a third 163 party network transaction involving a participating payee with 164 an address in this state must create and maintain records that 165 clearly identify whether a transaction is a transaction for 166 goods or services, or both, if applicable. 167 Section 4.Present subsections (3) and (4) of section 168 655.045, Florida Statutes, are redesignated as subsections (4) 169 and (5), respectively, a new subsection (3) is added to that 170 section, and subsection (2) of that section is amended, to read: 171 655.045Examinations, reports, and internal audits; 172 penalty. 173 (2)(a)Each state financial institution, subsidiary, or 174 service corporation shall submit a report, at least four times 175 each calendar year, as of such dates as the commission or office 176 determines. The report must include: 177 1.The number of inquiries, requests, summons, subpoenas, 178 or other requests for information or records received from the 179 Internal Revenue Service concerning any account holder domiciled 180 in this state. 181 2.Such other information as the commission by rule 182 requires for that type of institution. 183 (b)(a)The office shall levy an administrative fine of up 184 to $100 per day for each day the report is past due, unless it 185 is excused for good cause. 186 (c)(b)For an intentional late filing of the report, the 187 office shall levy an administrative fine of up to $1,000 per day 188 for each day the report is past due. 189 (3)By January 30 of each year, the office shall submit a 190 report that contains the information from the reports required 191 under subsection (2) to the commission, the President of the 192 Senate, and the Speaker of the House of Representatives. 193 Section 5.This act shall take effect on the same date that 194 SB ___ or similar legislation takes effect, if such legislation 195 is adopted in the same legislative session or an extension 196 thereof and becomes a law.