2014 Kentucky Revised Statutes CHAPTER 131 - DEPARTMENT OF REVENUE 131.081 Rules applicable to the administration of all taxes under jurisdiction of Department of Revenue.
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131.081 Rules applicable to the administration of all taxes under jurisdiction
of Department of Revenue.
The following rules, principles, or requirements shall apply in the administration of all
taxes subject to the jurisdiction of the Department of Revenue.
(1) The department shall develop and implement a Kentucky tax education and
information program directed at new taxpayers, taxpayer and industry groups,
and department employees to enhance the understanding of and compliance
with Kentucky tax laws, including the application of new tax legislation to
taxpayer activities and areas of recurrent taxpayer noncompliance or
inconsistency of administration.
(2) The department shall publish brief statements in simple and nontechnical
language which explain procedures, remedies, and the rights and obligations of
taxpayers and the department. These statements shall be provided to
taxpayers with the initial notice of audit; each original notice of tax due; each
denial or reduction of a refund or credit claimed by a taxpayer; each denial,
cancellation, or revocation of any license, permit, or other required
authorization applied for or held by a taxpayer; and, if practical and
appropriate, in informational publications by the department distributed to the
public.
(3) Taxpayers shall have the right to be assisted or represented by an attorney,
accountant, or other person in any conference, hearing, or other matter before
the department. The taxpayer shall be informed of this right prior to conduct of
any conference or hearing.
(4) The department shall perform audits and conduct conferences and hearings
only at reasonable times and places.
(5) Taxpayers shall have the right to make audio recordings of any conference
with or hearing by the department. The department may make similar audio
recordings if prior written notice is given to the taxpayer or if the taxpayer
records the conference or hearing. The taxpayer shall be entitled to a copy of
this department recording or a transcript as provided in KRS 61.874.
(6) If any taxpayer's failure to submit a timely return or payment to the department
is due to the taxpayer's reasonable reliance on written advice from the
department, the taxpayer shall be relieved of any penalty or interest with
respect thereto, provided the taxpayer requested the advice in writing from the
department and the specific facts and circumstances of the activity or
transaction were fully described in the taxpayer's request, the department did
not subsequently rescind or modify the advice in writing, and there were no
subsequent changes in applicable laws or regulations or a final decision of a
court which rendered the department's earlier written advice no longer valid.
(7) Taxpayers shall have the right to receive a copy of any audit of the department
by the Auditor of Public Accounts relating to the department's compliance with
the provisions of KRS 131.041 to 131.081.
(8) The department shall include with each notice of tax due a clear and concise
description of the basis and amount of any tax, penalty, and interest assessed
against the taxpayer, and copies of the agent's audit workpapers and the
agent's written narrative setting forth the grounds upon which the assessment
is made. Taxpayers shall be similarly notified regarding the denial or reduction
of any refund or credit claim filed by a taxpayer.
(9) (a) Taxpayers shall have the right to an installment payment agreement for
the payment of delinquent taxes, penalties, and interest owed, provided
the taxpayer requests the agreement in writing clearly demonstrating:
1.
His or her inability to pay in full; and
2.
That the agreement will facilitate collection by the department of the
amounts owed.
(b) The department may modify or terminate an installment payment
agreement and may pursue statutory remedies against the taxpayer if it
determines that:
1.
The taxpayer has not complied with the terms of the agreement,
including minimum payment requirements established by the
agreement;
2.
The taxpayers' financial condition has sufficiently changed;
3.
The taxpayer fails to provide any requested financial condition
update information;
4.
The taxpayer gave false or misleading information in securing the
agreement; or
5.
The taxpayer fails to timely report and pay any other tax due the
Commonwealth.
(c) The department shall give written notice to the taxpayer at least thirty (30)
days prior to modifying or terminating an installment payment agreement
unless the department has reason to believe that collection of the
amounts owed will be jeopardized in whole or in part by delay.
(10) The department shall not knowingly authorize, require, or conduct any
investigation or surveillance of any person for nontax administration related
purposes, except internal security related investigations involving Department
of Revenue personnel.
(11) In addition to the circumstances under which an extension of time for filing
reports or returns may be granted pursuant to KRS 131.170, taxpayers shall be
entitled to the same extension of the due date of any comparable Kentucky tax
report or return for which the taxpayer has secured a written extension from the
Internal Revenue Service provided the taxpayer notifies the department in
writing and provides a copy of the extension at the time and in the manner
which the department may require.
(12) The department shall bear the cost or, if paid by the taxpayer, reimburse the
taxpayer for recording or bank charges as the direct result of any erroneous
lien or levy by the department, provided the erroneous lien or levy was caused
by department error and, prior to issuance of the erroneous lien or levy, the
taxpayer timely responded to all contacts by the department and provided
information or documentation sufficient to establish his or her position. When
the department releases any erroneous lien or levy, notice of the fact shall be
mailed to the taxpayer and, if requested by the taxpayer, a copy of the release,
together with an explanation, shall be mailed to the major credit reporting
companies located in the county where it was filed.
(13) The department shall not evaluate individual officers or employees on the basis
of taxes assessed or collected or impose or suggest tax assessment or
collection quotas or goals.
(14) Taxpayers shall have the right to bring an action for damages against the
Commonwealth to the Board of Claims for actual and direct monetary damages
sustained by the taxpayer as a result of willful, reckless, and intentional
disregard by department employees of the rights of taxpayers as set out in
KRS 131.041 to 131.081 or in the tax laws administered by the department. In
the awarding of damages pursuant to this subsection, the board shall take into
consideration the negligence or omissions, if any, on the part of the taxpayer
which contributed to the damages. If any proceeding brought by a taxpayer is
ruled frivolous by the board, the department shall be reimbursed by the
taxpayer for its costs in defending the action.
(15) Taxpayers shall have the right to privacy with regard to the information
provided on their Kentucky tax returns and reports, including any attached
information or documents. Except as provided in KRS 131.190, no information
pertaining to the returns, reports, or the affairs of a person's business shall be
divulged by the department to any person or be intentionally and without
authorization inspected by any present or former commissioner or employee of
the Department of Revenue, member of a county board of assessment
appeals, property valuation administrator or employee, or any other person.
Effective:July 1, 2013
History: Amended 2013 Ky. Acts ch. 119, sec. 1, effective July 1, 2013. -Amended 2006 Ky. Acts ch. 251, sec. 2, effective July 12, 2006. -- Amended
2005 Ky. Acts ch. 85, sec. 111, effective June 20, 2005. -- Amended 2000 Ky.
Acts ch. 503, sec. 1, effective July 14, 2000. -- Amended 1998 Ky. Acts ch. 134,
sec. 2, effective July 15, 1998. -- Amended 1994 Ky. Acts ch. 508, sec. 43,
effective July 15, 1994. Amended 1992 Ky. Acts ch. 361, sec. 3, effective July
14, 1992. -- Created 1990 Ky. Acts ch. 423, sec. 4, effective July 13, 1990.
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