HLS 15RS-995 REENGROSSED
2015 Regular Session
HOUSE BILL NO. 721
BY REPRESENTATIVE IVEY
Prefiled pursuant to Article III, Section 2(A)(4)(b)(i) of the Constitution of Louisiana.
REVENUE SECRETARY: Provides relative to penalties collected by the Department of
Revenue
1 AN ACT
2To amend and reenact R.S. 47:114(F)(3), 295(C), 309(B), 1602(A)(2)(a) and (3)(a),
3 1603(A)(2) and (3), and 1604.1 and to enact R.S. 47:1508(B)(37), relative to the
4 penalties; to provide for certain civil penalties; to provide for the waiver of penalties;
5 to authorize the disclosure of certain information by the Department of Revenue; to
6 provide for effectiveness; and to provide for related matters.
7Be it enacted by the Legislature of Louisiana:
8 Section 1. R.S. 47:114(F)(3), 295(C), 309(B), 1602(A)(2)(a) and (3)(a), 1603(A)(2)
9and (3), and 1604.1 are hereby amended and reenacted and R.S. 47:1508(B)(37) is hereby
10enacted to read as follows:
11 §114. Returns and payment of tax
12 * * *
13 F. Penalty provision.
14 * * *
15 (3) If the failure to timely submit the annual return is attributable, not to the
16 negligence of the taxpayer, but to other causes set forth in written form and
17 considered reasonable by the secretary, the secretary may remit or waive payments
18 of the whole or any part of the specific penalty provided for such failure. In Until
19 December 31, 2015, in any case where the penalty exceeds twenty-five thousand
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1 dollars, it can be waived by the secretary only after approval by the Board of Tax
2 Appeals. Notwithstanding the provisions of R.S. 47:1508, beginning January 1,
3 2016, waivers of all penalties exceeding twenty-five thousand dollars shall be subject
4 to oversight by the House Committee on Ways and Means and the Senate Committee
5 on Revenue and Fiscal Affairs. This provision shall not apply to any penalty the
6 secretary remits or waives in accordance with rules and regulations promulgated
7 pursuant to the Administrative Procedure Act regarding the remittance or waiver of
8 penalties under the department's voluntary disclosure program.
9 * * *
10 §295. Tax imposed on individuals; administration
11 * * *
12 C. The secretary of the Department of Revenue shall administer and enforce
13 this Part. He may adopt, prescribe, and from time to time alter and enforce
14 reasonable rules, orders, and regulations for the purpose of implementing this Part.
15 He may, upon making a record of his reasons therefor, waive, reduce, or compromise
16 any of the taxes, penalties, or interest or other amounts provided by this Part. In
17 Until December 31, 2015, in any case when the penalty exceeds twenty-five
18 thousand dollars, it can be waived by the secretary only after approval by the Board
19 of Tax Appeals. Notwithstanding the provisions of R.S. 47:1508, beginning January
20 1, 2016, waivers of all penalties exceeding twenty-five thousand dollars shall be
21 subject to oversight by the House Committee on Ways and Means and the Senate
22 Committee on Revenue and Fiscal Affairs. This provision shall not apply to any
23 penalty the secretary remits or waives in accordance with rules and regulations
24 promulgated pursuant to the Administrative Procedure Act regarding the remittance
25 or waiver of penalties under the department's voluntary disclosure program.
26 * * *
27 §309. Dealers required to keep records
28 * * *
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1 B. Any dealer subject to the provisions of this Chapter who violates the
2 provisions of this Section shall be fined not more than five hundred thousand dollars
3 or imprisoned for not more than sixty days, or both, for any such offense.
4 * * *
5 §1508. Confidential character of tax records
6 * * *
7 B. Nothing herein contained shall be construed to prevent:
8 * * *
9 (37) Beginning January 1, 2016, the sharing or furnishing of a complete
10 record of all waiver of penalties that exceed twenty-five thousand dollars with the
11 House Ways and Means and Senate Revenue and Fiscal Affairs Committees. Any
12 taxpayer who accepts the remittance or waiver of penalties shall be deemed to have
13 consented to the publication of the complete record of the remittance or waiver of
14 penalty in the department's annual report. This provision shall not apply to any
15 penalty the secretary remits or waives in accordance with rules and regulations
16 promulgated pursuant to the Administrative Procedure Act regarding the remittance
17 or waiver of penalties under the department's voluntary disclosure program.
18 * * *
19 §1602. Penalty for failure to make timely return
20 A.
21 * * *
22 (2)(a) Except as provided in Paragraph (3), in the case of the filing of a
23 return without remittance of the full amount due, the specific penalty shall be five
24 percent of the unremitted tax if the failure to remit continues for not more than thirty
25 days, with an additional five percent for each additional thirty days or fraction during
26 which the failure to remit continues. The penalty imposed by this Paragraph for each
27 thirty-day period shall be calculated only on the additional amount due from the
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1 taxpayer after the deduction of payments timely submitted, or submitted during any
2 preceding thirty-day period when:
3 (i) At least ninety percent of the total tax due on the return is not previously
4 paid on or before the due date of the return.
5 (ii) The the return and payments are not received within the time prescribed
6 determined with regard to any extension of time.
7 * * *
8 (3)(a) In the case of individual income tax, if the full amount of tax due on
9 the return is not paid on or before the due date prescribed for payment of such tax,
10 the specific penalty shall be one-half of one percent of the unremitted tax if the
11 failure to remit continues for not more than thirty days, with an additional one-half
12 of one percent for each additional thirty days or fraction during which the failure to
13 remit continues. The penalty imposed by this Paragraph for each thirty-day period
14 shall be calculated only on the additional amount due from the taxpayer, when:
15 (i) At least ninety percent of the total tax due on the return is not previously
16 paid through employer withholdings, estimated tax payments, or any other payments
17 made on or before the due date of the return, or
18 (ii) The the return and payments are not received within the time prescribed
19 determined with regard to any extension of time.
20 * * *
21 §1603. Waiver of penalty for delinquent filing or delinquent payment
22 A.
23 * * *
24 (2)(a) In order to promote the effective administration of the tax laws of this
25 state, the secretary may also promulgate rules and regulations pursuant to the
26 Administrative Procedure Act concerning the waiver of penalties, including but not
27 limited to the establishment of a voluntary disclosure program.
28 (b) Notwithstanding any provison of law to the contrary, in any case where
29 the secretary and the taxpayer have entered into a valid and enforceable voluntary
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1 disclosure agreement, the The secretary may, pursuant to the rules and regulations
2 referenced in Subparagraph (a) of this Paragraph , remit or waive the payment of the
3 whole or any part of the penalties provided for in this Subtitle.
4 * * *
5 (3) In Until December 31, 2015, in any case when the penalty exceeds
6 twenty-five thousand dollars, it can be waived by the secretary only after approval
7 by the Board of Tax Appeals. Notwithstanding the provisions of R.S. 47:1508,
8 beginning January 1, 2016, waivers of all penalties exceeding twenty-five thousand
9 dollars shall be subject to oversight by the House Committee on Ways and Means
10 and the Senate Committee on Revenue and Fiscal Affairs. This provision shall not
11 apply to any penalty the secretary remits or waives in accordance with rules and
12 regulations promulgated pursuant to the Administrative Procedure Act regarding the
13 remittance or waiver of penalties under the department's voluntary disclosure
14 program.
15 * * *
16 §1604.1. Negligence penalty
17 If any taxpayer fails to make any return required by this Sub-title or makes
18 an incorrect return, and the circumstances indicate wilful negligence or intentional
19 disregard of rules and regulations, but no intent to defraud, there shall be imposed,
20 in addition to any other penalties provided, a specific penalty of 5% of the tax or
21 deficiency found to be due, or ten dollars, whichever is the greater. This specific
22 penalty shall be an obligation to be collected and accounted for in the same manner
23 as if it were a part of the tax due, and can be enforced either in a separate action or
24 in the same action for the collection of the tax.
25 A. Finding of negligence. For negligent failure to comply with any
26 provisions of this Part or any rules and regulations of the department, when the
27 secretary finds that a taxpayer did not have willful intent to defraud the state, the
28 secretary may assess a penalty equal to ten percent of the tax deficiency found to be
29 due as a result of the taxpayer's negligence.
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1 B. Large individual income tax deficiency. In the case of individual income
2 tax, if a taxpayer understates tax table income, by any means, by an amount equal to
3 twenty-five percent or more of adjusted gross income or has otherwise demonstrated
4 a willful disregard for the tax laws of this state, the secretary shall assess a penalty
5 equal to twenty percent of the deficiency. However, in the case of individual income
6 tax, if a taxpayer understates tax table income by an amount equal to twenty-five
7 percent or more of adjusted gross income but the secretary finds that the taxpayer did
8 not have willful intent to disregard the tax laws of this state, the secretary shall assess
9 a penalty of fifteen percent of the deficiency.
10 C. Other large tax deficiency. In the case of a tax other than individual
11 income tax, if a taxpayer understates tax liability by twenty-five percent or more, or
12 has otherwise demonstrated a willful disregard for the tax laws of this state, the
13 secretary shall assess a penalty equal to twenty percent of the deficiency. However,
14 in the case of a tax other than individual income tax, if a taxpayer understates tax
15 liability by twenty-five percent or more, but the secretary finds that the taxpayer did
16 not have willful intent to disregard the tax laws of this state, the secretary shall assess
17 a penalty of fifteen percent of the deficiency.
18 D. For purposes of this Section, the following terms shall have the following
19 meanings unless the context clearly indicates otherwise:
20 (1) "Adjusted gross income" means gross income as defined in Section 62
21 of the Internal Revenue Code.
22 (2) "Willful disregard" means the standard used to evaluate "willful failure
23 to collect or pay federal tax" pursuant to Section 7202 of the Internal Revenue Code.
24 The secretary shall use the standard of "willful disregard" when determining whether
25 a penalty shall be imposed by the secretary for an understatement of taxable income
26 or other tax liability by a taxpayer.
27 Section 3. This Act shall become effective on July 1, 2015; if vetoed by the governor
28and subsequently approved by the legislature, this Act shall become effective on July 1,
292015, or on the day following such approval by the legislature, whichever is later.
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HB NO. 721
DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part
of the legislative instrument. The keyword, one-liner, abstract, and digest do not constitute
part of the law or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
HB 721 Reengrossed 2015 Regular Session Ivey
Abstract: Provides for penalties and fees assessed by the Dept. of Revenue and adds
requirements for the publication of the waiver of penalties in excess of $50,000.
Present law provides for waiver by the secretary of penalties exceeding $25,000 only after
approval by the Board of Tax Appeals.
Proposed law maintains the requirement for the Board of Tax Appeals to approve the waiver
of penalties which exceed $25,000 until Dec. 31, 2015. Beginning Jan. 1, 2016. Further
provides that approval of a waiver of penalties exceeding $25,000 shall be subject to
oversight by the House Ways and Means Committee and the Senate Revenue and Fiscal
Affairs Committee.
Proposed law exempts penalties remitted or waived by the secretary from the provisions of
proposed law if the penalties are waived pursuant to the department's voluntary disclosure
program.
Present law provides that the records and files of the Dept. of Revenue or records and files
maintained pursuant to tax ordinances shall be confidential and privileged and shall not be
disclosed except in the administration and enforcement of tax laws or in other limited,
specific circumstances.
Proposed law retains present law but adds authorization, beginning Jan. 1, 2016, for the
department to share or furnish a complete record of all waivers of penalties in excess of
$25,000 with the House Ways and Means Committee and the Senate Revenue and Fiscal
Affairs Committee. Further provides that any taxpayer who accepts the remittance or waiver
of penalties shall be deemed to have consented to the publication of the information in the
department's annual report. Proposed law exempts waivers approved pursuant to the
department's voluntary disclosure program from the publication requirements.
Present law provides for a penalty of $500 for dealers which fail to keep adequate records.
Proposed law increases the penalty for failure to keep adequate records from $500 to $5,000.
Present law provides for a penalty for failure to fully remit the tax due when filing a tax
return and calculates the penalty on the additional amount due when at least 90% of the total
tax due is not paid on or before the date due and the return and payment are not received
within the prescribed time, including any extensions.
Proposed law retains present law as it relates to the amount of the penalty but extends the
penalty provision in cases where the return and full payment are not received within the
prescribed time, including any extensions.
Present law provides for the waiver of penalty for delinquent filing or delinquent payment.
Proposed law applies these waiver provisions to cases where the secretary and the taxpayer
have entered into a valid and enforceable voluntary disclosure agreement.
Present law establishes a negligence penalty of 5% of the tax due or $10, whichever is
greater.
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Proposed law changes the negligence penalty from 5% of the tax due or $10, whichever is
greater, to separate penalties for negligence and large tax deficiencies as follows:
(1)Negligence - If the secretary finds the taxpayer did not have willful intent to defraud
the state, the secretary may assess a penalty equal to 10% of the tax deficiency
resulting from the taxpayer's negligence.
(2)Large individual tax deficiency - If a taxpayer understates tax table income by an
amount equal to 25% or more of adjusted gross income or has demonstrated a willful
disregard for the tax laws of this state, the secretary may assess a penalty equal to
20% of the deficiency. However, if the secretary finds that the taxpayer did not have
willful intent to disregard the laws of this state, the secretary shall assess a penalty
of 15% of the tax deficiency.
(3)Large tax deficiency for taxes other than individual income tax - If a taxpayer
understates tax liability by 25% or more or has otherwise demonstrated a willful
disregard for the tax laws of this state, the secretary may assess a penalty equal to
20% of the deficiency. However, if the secretary finds that the taxpayer did not have
willful intent to disregard the laws of this state, the secretary shall assess a penalty
of 15% of the tax deficiency.
Effective July 1, 2015.
(Amends R.S. 47:114(F)(3), 295(C), 309(B), 1602(A)(2)(a) and (3)(a), 1603(A)(2) and (3),
and 1604.1; Adds R.S. 47:1508(B)(37))
Summary of Amendments Adopted by House
The Committee Amendments Proposed by House Committee on Ways and Means to the
original bill:
1. Make technical amendments to the bill.
2. Add a requirement that approval of a waiver of penalties in excess of $50,000
shall be conditioned on the taxpayer's consent to publication of information in
the department's annual report.
3. Add authorization, beginning Jan. 1, 2016, for the department to publish a
complete record of all waivers of penalties in excess of $50,000 granted by the
secretary in the department's annual report.
4. Add provision that any taxpayer who accepts the remittance or waiver of
penalties shall be deemed to have consented to the publication of the information
in the department's annual report.
5. Exempt waivers approved pursuant to the department's voluntary disclosure
program from the publication requirements.
The House Floor Amendments to the engrossed bill:
1. Delete provisions relative to penalties for payment of amounts owed to the Dept.
of Revenue with a check, money order, credit card, and other forms of payment
that is declined for insufficient funds.
2. Change the authorization, beginning Jan. 1, 2016, that the Dept. of Revenue
publish a complete record of waiver of penalties in excess of $50,000 in the
department's annual report to a requirement that waiver of penalties in excess of
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$25,000 be subject to oversight by the House Ways and Means and Senate
Revenue and Fiscal Affairs Committees.
3. Delete requirement that the waiver of penalties be conditioned on the taxpayer's
consent to publication of information the secretary deems necessary regarding
the waiver in the department's annual report.
4. Add authorization that if the secretary of the department finds that a taxpayer had
willful intent to defraud the state, the secretary may assess a penalty of 10% of
the tax deficiency.
6. Change the requirement with respect to the assessment of a penalty on a taxpayer
understating tax liability from reckless intent to disregard the laws of this state
to willful intent to disregard the laws of this state.
7. Make technical changes to the bill.
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