Jurris.COM
Article 11.5. Taxpayer’s Rights of California Unemployment Insurance Code >> Division 1. >> Part 1. >> Chapter 4. >> Article 11.5.
(a) The department shall develop and implement a taxpayer
education and information program directed at, but not limited to,
the following:
(1) Taxpayer or industry groups.
(2) Department audit and compliance staff.
(3) (A) Identifying forms, procedures, regulations, or laws that are confusing and lead to taxpayer errors.
(B) Taking appropriate action, including recommending remedial legislation to change those items identified pursuant to subparagraph (A).
(b) The education and information program described in subdivision (a) shall include all of the following:
(1) Communication with the taxpayer or industry groups which explains in simplified terms the most common errors made by taxpayers and how those errors may be avoided or corrected.
(2) Participation in small business seminars and similar programs organized by state and local agencies and may include participation in seminars organized by private organizations.
(3) In cooperation with the small business community, development of small business educational events and materials that explain, in simplified terms, the process of the department's determination of whether an individual is an employee or an independent contractor. These events and materials shall be designed to address potential tax and labor law issues that may arise when small businesses contract with microbusinesses in the production and delivery of products and services.
(4) Revision of taxpayer educational materials currently produced by the department to explain in simplified terms the most common errors made by taxpayers and how those errors may be avoided or corrected.
(5) Implementation of a continuing education program for audit personnel to include the application of new legislation to taxpayer activities and to minimize recurrent taxpayer noncompliance or inconsistency of administration.
(1) Taxpayer or industry groups.
(2) Department audit and compliance staff.
(3) (A) Identifying forms, procedures, regulations, or laws that are confusing and lead to taxpayer errors.
(B) Taking appropriate action, including recommending remedial legislation to change those items identified pursuant to subparagraph (A).
(b) The education and information program described in subdivision (a) shall include all of the following:
(1) Communication with the taxpayer or industry groups which explains in simplified terms the most common errors made by taxpayers and how those errors may be avoided or corrected.
(2) Participation in small business seminars and similar programs organized by state and local agencies and may include participation in seminars organized by private organizations.
(3) In cooperation with the small business community, development of small business educational events and materials that explain, in simplified terms, the process of the department's determination of whether an individual is an employee or an independent contractor. These events and materials shall be designed to address potential tax and labor law issues that may arise when small businesses contract with microbusinesses in the production and delivery of products and services.
(4) Revision of taxpayer educational materials currently produced by the department to explain in simplified terms the most common errors made by taxpayers and how those errors may be avoided or corrected.
(5) Implementation of a continuing education program for audit personnel to include the application of new legislation to taxpayer activities and to minimize recurrent taxpayer noncompliance or inconsistency of administration.
(a) If an employing unit's failure to make a timely return or
payment is due to the person's reasonable reliance on written advice
from the department, the employing unit may be relieved of the taxes
assessed, or any interest, additions to tax, or penalties added
thereto, as follows:
(1) Taxes or any interest, additions to tax, or penalties added thereto, shall only be relieved if the employing unit's failure to make a timely return or payment was due to the employing unit's reasonable reliance on the written advice of a ruling by the director or his or her designee, and only if the department itself finds all the conditions described in subdivision (b) are satisfied.
(2) In the event that the employing unit relied on written advice of other than a ruling of the director or his or her designee, taxes shall not be relieved. Interest, additions to tax, or penalties may be waived if the department staff finds all the conditions described in subdivision (b) are satisfied.
(b) For purposes of subdivision (a), relief shall be granted if all of the following conditions are satisfied:
(1) The employing unit or the employing unit's representative requested in writing that the department advise him or her whether a particular activity or transaction is subject to tax under the tax laws administered by the department, and the specific facts and circumstances of the employment relationship, activity, or transaction were fully described in the request.
(2) The department responded in writing to the person regarding the written request for advice, stating whether or not the described employment relationship, activity, or transaction is subject to tax, or stating the conditions under which the activity or transaction is subject to tax.
(3) In reasonable reliance on the department's written advice, the person did not remit the tax due.
(4) The liability for taxes applied to a particular activity or transaction that occurred before the department rescinded or modified the advice so given, by sending written notice to the person of the rescinded or modified advice.
(5) The tax consequences expressed in the department's written advice were not subsequently changed by any of the following:
(A) A change in state or federal statutory law or case law.
(B) A change in a federal administrative ruling or regulation where the department's written advice was based on that federal administrative ruling or regulation.
(C) A change in material facts or circumstances relating to the taxpayer.
(c) Any person seeking relief under this section shall file with the department all of the following:
(1) A copy of the person's written request to the department and a copy of the department's written advice.
(2) A statement signed under penalty of perjury, setting forth the facts on which the claim is based.
(3) Any other information which the department may require.
(d) Only the person making the written request shall be entitled to rely on the department's written advice to that person.
(e) If written advice is issued pursuant to this section, it shall include a declaration that the tax consequences expressed in the advice may be subject to change for any of the reasons specified in paragraph (5) of subdivision (b) and that it is the duty of the requester to be aware of any of these possible changes.
(f) This section shall not apply if the requester's request for written advice pursuant to paragraph (1) of subdivision (b) contained a misrepresentation or omission of one or more material facts.
(g) For purposes of subdivision (a), the department shall waive only that portion of tax, penalties, interest, or additions to tax attributable to the actions taken by the employing unit after receipt of the written advice of the department which were in reasonable reliance on the written advice.
(h) When a request is made for a legal ruling, the request shall specifically so state. Director rulings shall be issued as provided in published guidelines. When a director ruling is issued, the ruling shall be signed by the director or his or her designee.
(i) This section shall not apply to an employing unit that is a nonprofit organization or a governmental agency.
(j) Notwithstanding any other provision of this section, no relief from unemployment insurance taxes imposed pursuant to Article 3 (commencing with Section 976) of Chapter 4 of Part 1, other than relief from interest and penalties, shall be granted pursuant to this section unless Section 1234, as enacted by the act enacting this section, becomes operative.
(1) Taxes or any interest, additions to tax, or penalties added thereto, shall only be relieved if the employing unit's failure to make a timely return or payment was due to the employing unit's reasonable reliance on the written advice of a ruling by the director or his or her designee, and only if the department itself finds all the conditions described in subdivision (b) are satisfied.
(2) In the event that the employing unit relied on written advice of other than a ruling of the director or his or her designee, taxes shall not be relieved. Interest, additions to tax, or penalties may be waived if the department staff finds all the conditions described in subdivision (b) are satisfied.
(b) For purposes of subdivision (a), relief shall be granted if all of the following conditions are satisfied:
(1) The employing unit or the employing unit's representative requested in writing that the department advise him or her whether a particular activity or transaction is subject to tax under the tax laws administered by the department, and the specific facts and circumstances of the employment relationship, activity, or transaction were fully described in the request.
(2) The department responded in writing to the person regarding the written request for advice, stating whether or not the described employment relationship, activity, or transaction is subject to tax, or stating the conditions under which the activity or transaction is subject to tax.
(3) In reasonable reliance on the department's written advice, the person did not remit the tax due.
(4) The liability for taxes applied to a particular activity or transaction that occurred before the department rescinded or modified the advice so given, by sending written notice to the person of the rescinded or modified advice.
(5) The tax consequences expressed in the department's written advice were not subsequently changed by any of the following:
(A) A change in state or federal statutory law or case law.
(B) A change in a federal administrative ruling or regulation where the department's written advice was based on that federal administrative ruling or regulation.
(C) A change in material facts or circumstances relating to the taxpayer.
(c) Any person seeking relief under this section shall file with the department all of the following:
(1) A copy of the person's written request to the department and a copy of the department's written advice.
(2) A statement signed under penalty of perjury, setting forth the facts on which the claim is based.
(3) Any other information which the department may require.
(d) Only the person making the written request shall be entitled to rely on the department's written advice to that person.
(e) If written advice is issued pursuant to this section, it shall include a declaration that the tax consequences expressed in the advice may be subject to change for any of the reasons specified in paragraph (5) of subdivision (b) and that it is the duty of the requester to be aware of any of these possible changes.
(f) This section shall not apply if the requester's request for written advice pursuant to paragraph (1) of subdivision (b) contained a misrepresentation or omission of one or more material facts.
(g) For purposes of subdivision (a), the department shall waive only that portion of tax, penalties, interest, or additions to tax attributable to the actions taken by the employing unit after receipt of the written advice of the department which were in reasonable reliance on the written advice.
(h) When a request is made for a legal ruling, the request shall specifically so state. Director rulings shall be issued as provided in published guidelines. When a director ruling is issued, the ruling shall be signed by the director or his or her designee.
(i) This section shall not apply to an employing unit that is a nonprofit organization or a governmental agency.
(j) Notwithstanding any other provision of this section, no relief from unemployment insurance taxes imposed pursuant to Article 3 (commencing with Section 976) of Chapter 4 of Part 1, other than relief from interest and penalties, shall be granted pursuant to this section unless Section 1234, as enacted by the act enacting this section, becomes operative.
Any civil employment tax matter dispute arising under Article
8 (commencing with Section 1126), Article 9 (commencing with Section
1176), or Article 11 (commencing with Section 1221), may be settled
under the following conditions:
(a) (1) The director may approve a settlement of a civil employment tax matter in dispute involving a reduction of tax in settlement of seven thousand five hundred dollars ($7,500) or less. However, once an appeal of an employment tax matter dispute has been filed with the appeals board, the appeal has been assigned to an administrative law judge, and a notice of hearing has been issued, approval of the settlement by the assigned administrative law judge shall be obtained. If the decision of the administrative law judge has been appealed, approval of the appeals board shall be obtained. A proposed settlement shall be grounds for continuance of the scheduled hearing until the Attorney General has completed a review of the proposed settlement. "Civil employment tax matters in dispute" means those matters that are the subject of protests, appeals, or refund claims.
(2) Except as provided by paragraph (3), each proposed settlement shall be submitted to the Attorney General. Within 30 days of receiving that proposed settlement, the Attorney General shall review the recommendation and advise, in writing, of his or her conclusions as to whether the recommendation is reasonable from an overall perspective. If the Attorney General determines that the settlement is reasonable from an overall perspective, the director, and the administrative law judge or the appeals board, as applicable, may then determine if a settlement will be approved.
(3) A settlement of any civil employment tax matter dispute involving a reduction of tax or penalties in settlement, the total of which reduction of tax and penalties in settlement does not exceed five thousand dollars ($5,000), may be approved by the director, and the administrative law judge or the appeals board, as applicable, without prior submission to the Attorney General.
(b) The director may recommend to the appeals board a settlement of a civil employment tax matter dispute involving a reduction in tax and exceeding seven thousand five hundred dollars ($7,500) and arising under Article 8 (commencing with Section 1126), Article 9 (commencing with Section 1176), or Article 11 (commencing with Section 1221). Each proposed settlement shall be submitted to the Attorney General in the same manner as described in subdivision (a).
(c) Whenever a reduction of tax or penalties or total tax and penalties in excess of five hundred dollars ($500) is approved pursuant to this section, there shall be placed on file in the office of the director a public record with respect to that settlement. The public record shall include, but need not be limited to, all of the following information:
(1) The name or names of the taxpayers who are parties to the settlement.
(2) The total amount involved.
(3) The amount payable or refundable pursuant to the settlement.
(4) A summary of the reasons why the settlement is in the best interests of the state.
(5) The Attorney General's conclusion as to whether the recommendation of settlement was reasonable from an overall perspective. The public record shall not include any information that relates to any trade secret, patent, process, style of work, apparatus, business secret, or organizational structure that, if disclosed, would adversely affect the taxpayer or the national defense.
(d) All settlements entered into pursuant to this section shall be final and nonappealable, except upon a showing of fraud or misrepresentation with respect to a material fact.
(e) Any proceedings undertaken by the appeals board relating to a settlement as described in this section shall be conducted in a closed session or sessions. Except as provided in subdivision (c), any settlement entered into pursuant to this section shall constitute confidential tax information.
(f) Any settlement of a civil employment tax matter arising out of a disagreement between the department and the employing unit on the status of a worker as an employee or an independent contractor may also include an agreement on the prospective classification of that worker and any worker similarly situated for employment tax purposes, except as provided in subdivision (g).
(g) If a settlement includes a commitment on the prospective status of workers or reporting responsibilities of the employer, then the following shall apply:
(1) The settlement shall not operate to deprive workers of their eligibility for unemployment, workers' compensation, or disability insurance benefits.
(2) The commitment concerning the status of workers or reporting responsibilities of the employer will terminate if there is a change in material facts, a change in an applicable statute, or a ruling by the appeals board on the workers or employer subject to the settlement that is contrary to the commitment.
(h) For purposes of this section, settlement is defined as a compromise on the amount of the tax liability, consistent with the reasonable evaluation of the costs and risks associated with litigation of these matters.
(i) The amendments to this section made in the 1997 portion of the 1997-98 Regular Session shall become operative January 1, 1998.
(a) (1) The director may approve a settlement of a civil employment tax matter in dispute involving a reduction of tax in settlement of seven thousand five hundred dollars ($7,500) or less. However, once an appeal of an employment tax matter dispute has been filed with the appeals board, the appeal has been assigned to an administrative law judge, and a notice of hearing has been issued, approval of the settlement by the assigned administrative law judge shall be obtained. If the decision of the administrative law judge has been appealed, approval of the appeals board shall be obtained. A proposed settlement shall be grounds for continuance of the scheduled hearing until the Attorney General has completed a review of the proposed settlement. "Civil employment tax matters in dispute" means those matters that are the subject of protests, appeals, or refund claims.
(2) Except as provided by paragraph (3), each proposed settlement shall be submitted to the Attorney General. Within 30 days of receiving that proposed settlement, the Attorney General shall review the recommendation and advise, in writing, of his or her conclusions as to whether the recommendation is reasonable from an overall perspective. If the Attorney General determines that the settlement is reasonable from an overall perspective, the director, and the administrative law judge or the appeals board, as applicable, may then determine if a settlement will be approved.
(3) A settlement of any civil employment tax matter dispute involving a reduction of tax or penalties in settlement, the total of which reduction of tax and penalties in settlement does not exceed five thousand dollars ($5,000), may be approved by the director, and the administrative law judge or the appeals board, as applicable, without prior submission to the Attorney General.
(b) The director may recommend to the appeals board a settlement of a civil employment tax matter dispute involving a reduction in tax and exceeding seven thousand five hundred dollars ($7,500) and arising under Article 8 (commencing with Section 1126), Article 9 (commencing with Section 1176), or Article 11 (commencing with Section 1221). Each proposed settlement shall be submitted to the Attorney General in the same manner as described in subdivision (a).
(c) Whenever a reduction of tax or penalties or total tax and penalties in excess of five hundred dollars ($500) is approved pursuant to this section, there shall be placed on file in the office of the director a public record with respect to that settlement. The public record shall include, but need not be limited to, all of the following information:
(1) The name or names of the taxpayers who are parties to the settlement.
(2) The total amount involved.
(3) The amount payable or refundable pursuant to the settlement.
(4) A summary of the reasons why the settlement is in the best interests of the state.
(5) The Attorney General's conclusion as to whether the recommendation of settlement was reasonable from an overall perspective. The public record shall not include any information that relates to any trade secret, patent, process, style of work, apparatus, business secret, or organizational structure that, if disclosed, would adversely affect the taxpayer or the national defense.
(d) All settlements entered into pursuant to this section shall be final and nonappealable, except upon a showing of fraud or misrepresentation with respect to a material fact.
(e) Any proceedings undertaken by the appeals board relating to a settlement as described in this section shall be conducted in a closed session or sessions. Except as provided in subdivision (c), any settlement entered into pursuant to this section shall constitute confidential tax information.
(f) Any settlement of a civil employment tax matter arising out of a disagreement between the department and the employing unit on the status of a worker as an employee or an independent contractor may also include an agreement on the prospective classification of that worker and any worker similarly situated for employment tax purposes, except as provided in subdivision (g).
(g) If a settlement includes a commitment on the prospective status of workers or reporting responsibilities of the employer, then the following shall apply:
(1) The settlement shall not operate to deprive workers of their eligibility for unemployment, workers' compensation, or disability insurance benefits.
(2) The commitment concerning the status of workers or reporting responsibilities of the employer will terminate if there is a change in material facts, a change in an applicable statute, or a ruling by the appeals board on the workers or employer subject to the settlement that is contrary to the commitment.
(h) For purposes of this section, settlement is defined as a compromise on the amount of the tax liability, consistent with the reasonable evaluation of the costs and risks associated with litigation of these matters.
(i) The amendments to this section made in the 1997 portion of the 1997-98 Regular Session shall become operative January 1, 1998.
(a) No business entity shall discharge or otherwise
discriminate against any person because he or she has sought
information from the department concerning his or her rights under
this code or the Labor Code, cooperated with any investigation
undertaken by the department, or has testified or is about to testify
in any proceeding brought pursuant to this code or the Labor Code.
(b) Any employee who believes that his or her rights under subdivision (a) have been violated may file a complaint with the Labor Commissioner, and with respect to that complaint shall be entitled to the same rights, remedies, and procedures as are applicable for a violation of Section 98.6 of the Labor Code.
(b) Any employee who believes that his or her rights under subdivision (a) have been violated may file a complaint with the Labor Commissioner, and with respect to that complaint shall be entitled to the same rights, remedies, and procedures as are applicable for a violation of Section 98.6 of the Labor Code.
