| HOME | SEARCH | ABOUT US | CONTACT US | HELP | ||
 |
 |
|
|
| Montana Administrative Register Notice 42-2-792 | No. 23 12/06/2007 | |
|
Page No.: 2000 -- 2008 | |
| Prev | Next | ||
|
BEFORE THE DEPARTMENT OF REVENUE OF THE STATE OF MONTANA �
� TO: All Concerned Persons � 1. On January 8, 2008, at 9:00 a.m., a public hearing will be held in the Director's Office (Fourth Floor) Conference Room of the Sam W. Mitchell Building, at Helena, Montana, to consider the adoption, amendment, amendment and transfer, and repeal of the above-stated rules. Individuals planning to attend the hearing shall enter the building through the east doors of the Sam W. Mitchell Building, 125 North Roberts, Helena, Montana. � 2. The Department of Revenue will make reasonable accommodations for persons with disabilities who wish to participate in this public hearing or need an alternative accessible format of this notice. If you require an accommodation, contact the Department of Revenue no later than 5:00 p.m., December 27, 2007, to advise us of the nature of the accommodation that you need. Please contact Cleo Anderson, Department of Revenue, Director's Office, P.O. Box 7701, Helena, Montana 59604-7701; telephone (406) 444-5828; fax (406) 444-3696; or e-mail [email protected]. � 3. The proposed new rule does not replace or modify any section currently found in the Administrative Rules of Montana. The proposed new rule provides as follows: � NEW RULE I VOLUNTARY DISCLOSURE PROGRAM FOR NONFILING TAXPAYERS (1) The voluntary disclosure program allows qualified entities and individuals, and qualified shareholders, and partners of qualified pass-through entities to disclose their tax liabilities voluntarily and settle their tax obligations in a voluntary disclosure agreement. Affected taxpayers may contact the department directly as provided for in (3) or use the services of the Multistate Tax Commission's National Nexus Program. The department encourages those qualified entities, qualified shareholders, and qualified partners with a need to come into compliance with multiple states or other jurisdictions to use the services of the National Nexus Program to resolve their compliance issues. The National Nexus Program provides a single point of contact and substantially uniform procedures. Information regarding the National Nexus Program can be found at www.mtc.gov. (a) If a taxpayer contacts the department directly, the department will not enter into a voluntary disclosure agreement on terms more favorable than the terms the taxpayer would have entered into through the services of the National Nexus Program. (2) To qualify for a voluntary disclosure agreement with the department, a qualified entity, qualified shareholder, qualified partner, or qualified individual must meet all of the following criteria: (a) have not filed a return for the tax type covered by the agreement within the last five years; (b) have had no previous contact by the department or its agencies, including the Multistate Tax Commission, regarding a tax covered by the agreement, including but not limited to, notification of audit, review, assessment, request for information, letter from the department following a foreign company's registration with the Montana Secretary of State, or a letter from the department following a domestic company's formation by filing documents with the Montana Secretary of State; (c) voluntarily come forward and make an application for a voluntary disclosure agreement that contains the information required by (3); (d) agree to file returns specified in the agreement and pay all the taxes and statutory interest for the entire lookback period within the time period and manner specified in the agreement without further action by the department; (e) agree to register with the Secretary of State (if a business entity), file returns, and pay all taxes for periods after the lookback period without further action by the department; and (f) have not been a party to any criminal investigation or pending civil or criminal litigation for nonpayment, delinquency, or fraud in relation to any tax due. (3) To request a voluntary disclosure agreement, a qualified entity, qualified shareholder, qualified partner and/or representatives or qualified individual must submit a written request to the department including the following information: (a) if an entity: (i) a full and accurate statement of the entity's activities for five immediately preceding filing periods; (ii) a full and accurate statement of the entity's activities in Montana for five immediately preceding filing periods; and (iii) the number of years the entity has been doing business in Montana; (b) if an individual: (i) a full and accurate statement of the individual's activities in Montana for five immediately preceding filing periods; (ii) the addresses at which the individual has resided for the five immediately preceding filing periods; and (iii) the number of years the individual maintained a place of abode in Montana; (c) the type of tax or taxes for which they are requesting voluntary disclosure; (d) an explanation for the failure to register with the Secretary of State, if an entity; (e) an explanation of the failure to file Montana returns and pay taxes; (f) proposed voluntary disclosure agreement terms; and (g) an estimate of the tax liability for the lookback period. (4) A qualified entity or individual may preserve confidentiality by not revealing its name or any information that could readily identify the company or individual during the voluntary disclosure process until the agreement is finalized. (5) The voluntary disclosure agreement is voidable by the department if the qualified entity, shareholder, partner, or individual: (a) misrepresents material facts relevant to the agreement; (b) fails to file returns or pay taxes and statutory interest for the lookback period within the time specified in the agreement; (c) reneges on an installment payment arrangement; or (d) fails to continue to comply with Montana tax law. � AUTH: 15-1-201, 15-30-305, 15-31-501, MCA IMP: 15-1-206, 15-30-101, 15-30-142, 15-31-101, 15-31-111, MCA � REASONABLE NECESSITY: The department is proposing to adopt New Rule I to clarify the procedures that must be followed by taxpayers when applying for the department's voluntary disclosure program for nonfilers. These rules describe the opportunity and procedures for previously nonfiling taxpayers to contact the department directly to resolve their compliance issues. Further, the rules describe how the opportunity to contact the department directly coordinates with the services of the Multistate Tax Commission's National Nexus Program in which Montana also participates. � 4. The rules proposed to be amended provide as follows, stricken matter interlined, new matter underlined: � 42.2.304 DEFINITIONS The terms used by the department are, in great part, defined in Titles 15, 16, 39, and 72, MCA. In addition to these statutory definitions, the following definitions apply to ARM Title 42, unless context of a particular chapter or rule provides otherwise: (1) through (7) remain the same.
(10) through (32) remain the same but are renumbered (8) through (30). (31) "Lookback period", for purposes of the voluntary disclosure program, means the filing periods agreed upon for which returns must be filed and all taxes and statutory interest must be paid under a voluntary disclosure agreement. (33) through (35) remain the same but are renumbered (32) through (34).
(a) acreages that do not touch, but are each an integral part of the operation of a bona fide agricultural operation; or (b) acreages that would meet the definition of contiguous contained in (i) roads and highways; (ii) navigable rivers and streams; (iii) local taxing authority boundaries; (iv) railroad lines; or (v) federal or state land that is leased from the federal or state government by a taxpayer whose land ownership is contiguous to the federal or state land. (37) through (43) remain the same but are renumbered (36) through (42).
(45) and (46) remain the same but are renumbered (44) and (45). (46) "Qualified entity", for purposes of the voluntary disclosure program, is a corporation, trust, limited liability company, or partnership that meets the conditions in [NEW RULE I(2)]. (47) "Qualified individual", for purposes of the voluntary disclosure program, is an individual who meets the conditions in [NEW RULE I(2)], or is a beneficiary of a trust that meets the conditions in [NEW RULE I(2)]. (48) "Qualified partner", for purposes of the voluntary disclosure program, is an individual or entity who is treated as a partner of a qualified entity for federal income tax purposes and who themselves meets the conditions of [NEW RULE I(2)]. (49) "Qualified shareholder", for purposes of the voluntary disclosure program, is a shareholder in an S corporation that is a qualified entity as defined in (46), and who themselves meets the conditions of [NEW RULE I(2)]. (47) and (48) remain the same but are renumbered (50) and (51).
(51) through (60) remain the same but are renumbered (54) through (63). � AUTH: 15-1-201, 15-30-305, 15-31-501, 16-1-303, 16-10-104, 16-11-103, MCA IMP: 15-1-102, 15-1-206, 15-1-601, 15-30-101, 15-30-105, 15-30-131, 15-30-142, 15-30-1101, 15-30-1102, 15-30-1111, 15-30-1112, 15-30-1113, 15-30-1121, 15-31-101, 15-31-111, Title 15, chapter 31, part 3, MCA � REASONABLE NECESSITY: The department is proposing to amend ARM 42.2.304 to delete the definition for CALP in this rule because it better fits in chapter 18 which is the property appraisal rules. The definition of CAMAS is no longer applicable to the department's appraisal process. The department is proposing to add the definitions of "lookback period", "qualifying entity", "qualified individual", "qualified partner", and "qualified shareholder" to clarify the terms used in New Rule I as they apply to the voluntary disclosure program of the department. The definition of "reasonable time" is being amended to clarify that the department will apply the later of the five years or the statute of limitations. The other amendments are necessary to correct the internal references which occurred from the previously stated amendments to this rule. � 42.2.306 PENALTY AND INTEREST (1) and (2) remain the same. (3) Interest on all outstanding individual income taxes after December 31, 2007, shall accrue at the rate of 8% per annum calculated daily. The rate applies to all outstanding taxes regardless of the tax year or when the return was filed. The rate does not affect any interest accrued prior to December 31, 2007. Examples of how this rule affects the calculation of interest are as follows: (a) Taxpayer A timely filed a return for the 2005 tax year but has not paid their liability. From the original due date of April 15, 2006, until December 31, 2006, interest is assessed at 12% per annum. From January 1, 2007, until December 31, 2007, interest is assessed at 8% per annum. From January 1, 2008, until December 31, 2008, interest is assessed at 8% per annum. (b) Taxpayer B files a return for the 2004 tax year on March 15, 2008, and pays the tax at that time. From the original due date of April 15, 2005, until December 31, 2006, interest is assessed at 12% per annum. From January 1, 2007, until December 31, 2007, interest is assessed at 8% per annum. From January 1, 2008, until March 15, 2008, interest is assessed at 8% per annum. (c) Taxpayer C files a return for the 2005 tax year on October 15, 2006, and pays the tax and interest at a rate of 12% at that time. On June 7, 2008, the taxpayer files an amendment to the 2005 tax year to report an increase in tax resulting from a federal revenue agent's report. Interest on the increased liability is computed as follows: From the original due date of April 15, 2006, until December 31, 2006, interest is assessed at 12% per annum. From January 1, 2007, until December 31, 2007, interest is assessed at 8% per annum. From January 1, 2008, until December 31, 2008, interest is assessed at 8% per annum. (4) For purposes of determining interest on the underpayment of estimates provided in 15-30-241, MCA, the rate in effect on the original due date of the tax return shall be used. For example, a return for the 2007 tax year is due April 15, 2008, so the rate that became effective January 1, 2008, shall be used to compute interest on the underpayment of estimates. � AUTH: 15-1-201, 15-1-216, 16-10-104, 16-11-103, 39-51-301, MCA IMP: 15-1-206, 15-1-207, 15-1-216, 15-1-701, 15-1-708, 16-1-409, 16-1-411, 16-11-143, � REASONABLE NECESSITY: The department is proposing to amend ARM 42.2.306 because 15-1-216, MCA, directs the department to determine the interest rate for each calendar year by rule. Section 15-1-216, MCA, further directs the department to acquire the interest rate from the Internal Revenue Service for the fourth quarter of the preceding year. The department was advised in September that the interest rate the Internal Revenue Service had established for the applicable period would be 8%. � 42.2.321 DEPARTMENT PROGRAMS RELATED TO PUBLIC PARTICIPATION (1) The department shall develop procedures that outline the elements stated in ARM 42.2.322 through � AUTH: 15-1-201, 16-1-303, 16-10-104, 16-11-103, MCA IMP: Title 2, chapter 3, part 1, 15-1-201, MCA � REASONABLE NECESSITY: The department is proposing to amend ARM 42.2.321 to delete the internal rule citations of ARM 42.2.326 and 42.2.327 because those rules were repealed in 2006. � 42.2.501 APPLICATION OF PARTIAL PAYMENTS (1) Partial payments that are received by the department for payment of a (2) through (4) remain the same.
� AUTH: 2-4-201, 15-1-201, 15-30-305, 15-31-501, 15-35-122, 15-53-155, MCA IMP: 2-4-201, 15-1-206, 15-1-216, 15-30-304, 15-30-321, 15-30-323, 15-31-111, 15-31-502, 15-31-506, 15-31-510, 15-31-522, 15-31-543, � REASONABLE NECESSITY: The department is proposing to amend ARM 42.2.501 because the collection service fee referenced in this rule is no longer applicable. The department is deleting the implementing citation of 15-31-545, MCA, because that statute has been repealed. Additionally, the department is proposing to delete (5) as it is no longer necessary. � 42.2.503 JEOPARDY ASSESSMENT AND EMERGENCY EXECUTION (1) If the department finds the assessment or collection of a deficiency will be jeopardized by delay and a deficiency notice has not been issued, the deficiency, penalty, and accrued interest become immediately due and payable on the date the department mails the taxpayer a written notice: (a) through (e) remain the same. (f) that while filing the objection or request as provided in (1)(e) will not stop or delay collection proceedings, including issuing a Warrant for Distraint, if the taxpayer files the objection or request and it is subsequently determined in the department dispute resolution proceedings or on subsequent appeal that the amount of tax collected is in excess of the amount due, the amount of the overpayment will be credited against any income tax, penalty, or interest then due from the taxpayer and the balance of the excess refunded to the taxpayer as provided in 15-30-149 and 15-31-531, MCA. (2) If the department finds the collection of a deficiency, for which a Notice of Deficiency has been mailed, will be jeopardized by delay and the time for filing a written objection to the amount of the Statement of Account or a Request for Informal Review form (APLS101F) with the department as provided in ARM 42.2.510 has not yet expired, the deficiency, penalty, and accrued interest become immediately due and payable on the date the department mails the taxpayer a written notice: (a) through (c) remain the same. (d) that if it is subsequently determined in the department dispute resolution proceedings or on subsequent appeal that the amount of tax collected is in excess of the amount due, the amount of the overpayment will be credited against any income tax, penalty, or interest then due from the taxpayer and the balance of the excess refunded to the taxpayer as provided in 15-30-149 and 15-31-531, MCA. (3) and (4) remain the same. � AUTH: 15-30-305, MCA IMP: 15-30-204, � REASONABLE NECESSITY: The department is proposing to amend ARM 42.2.503 to add the applicable implementing cite and delete 15-30-225, MCA, as an implementing cite because it was repealed. � 42.2.505 INTEREST ON UNPAID TAX (1) Interest on unpaid tax must be calculated as set forth in 15-1-216, MCA. (2)
(a) the due date of the loss year return; or (b) the date the loss year return is actually filed. This limited interest calculation applies only to the unpaid tax offset by the net operating loss carryback. � AUTH: 15-30-305, MCA IMP: 15-30-142, MCA � REASONABLE NECESSITY: The department is proposing to amend ARM 42.2.505(2) because the language pertains to the fact that an amended Montana return must be filed with 90 days after filing an amended federal return or receiving notice that the taxpayer's taxable income was changed or corrected by the IRS. This provision is already addressed in ARM 42.15.314 and does not belong in ARM 42.2.505. � 42.2.510 REVIEW OF STATEMENT OF ACCOUNT NOTICES (1) This rule applies to all department actions where a statement of account (SOA) or deficiency assessment, as defined in ARM 42.2.304, is issued. A statement of account does not include centrally assessed appraisal reports and centrally assessed assessment notices which are covered by ARM 42.2.511. (2) through (9) remain the same. � AUTH: 15-1-201, 15-1-211, 15-1-701, 15-31-501, 15-35-122, 15-36-322, MCA IMP: 15-1-211, 15-1-406, 15-8-601, 15-23-102, 15-23-107, 15-30-142, � REASONABLE NECESSITY: The department is proposing to amend ARM 42.2.510 to direct taxpayers to the rule that defines the term "statement of account". The department is proposing to delete 15-30-257, MCA, because that statute was repealed.� 5. The rule proposed to be amended and transferred provides as follows, stricken matter interlined, new matter underlined: � 42.2.401 (42.15.526) SMALL BUSINESS LIABILITY FUNDS (1) through (3) remain the same. (4) Upon termination of the independent liability fund the trustee shall file with the department � AUTH: 15-30-305, 15-31-501, MCA IMP: 15-30-107, 15-30-127, 15-31-117, 15-31-118, MCA � REASONABLE NECESSITY: The department proposes to amend ARM 42.2.401 because the Montana form 1-A is no longer available. A copy of the Federal Form 1099 will suffice. The department further proposes to transfer this rule to chapter 15 and reference that rule in chapter 26 because the text of the rule is more applicable to those chapters. � 6. The department proposes to repeal the following rules: � 42.2.309 VOLUNTARY DISCLOSURE which can be found on page 42-113 of the Administrative Rules of Montana. � AUTH: 15-1-201, 15-1-211, 15-30-305, MCA IMP: 15-1-206, 15-30-101, 15-30-105, 15-30-142, 15-30-304, MCA � REASONABLE NECESSITY: The department is proposing to repeal ARM 42.2.309 because the expiration date for the voluntary disclosure expired on September 1, 2006. � 42.2.320 INTEGRATED REVENUE INFORMATION SYSTEM (IRIS) ADMINISTRATIVE FEE which can be found on page 42-115 of the Administrative Rules of Montana. � AUTH: 15-1-141, MCA � REASONABLE NECESSITY: The department is proposing to repeal ARM 42.2.320 because it is no longer applicable. An appropriation was authorized by the 2005 Legislature for the Integrated Revenue Information System (IRIS) and the funding mechanism set forth in ARM 42.2.320 is no longer required. � 7. Concerned persons may submit their data, views, or arguments, either orally or in writing, at the hearing. Written data, views, or arguments may also be submitted to: Cleo Anderson, Department of Revenue, Director's Office, P.O. Box 7701, Helena, Montana 59604-7701; telephone (406) 444-5828; fax (406) 444-3696; or e-mail [email protected] and must be received no later than January 18, 2008. � 8. Cleo Anderson, Department of Revenue, Director's Office, has been designated to preside over and conduct the hearing. � 9. An electronic copy of this Notice of Public Hearing is available through the department's site on the World Wide Web at www.mt.gov/revenue, under "for your reference"; "DOR administrative rules"; and "upcoming events and proposed rule changes." The department strives to make the electronic copy of this Notice of Public Hearing conform to the official version of the Notice, as printed in the Montana Administrative Register, but advises all concerned persons that in the event of a discrepancy between the official printed text of the Notice and the electronic version of the Notice, only the official printed text will be considered. In addition, although the department strives to keep its web site accessible at all times, concerned persons should be aware that the web site may be unavailable during some periods, due to system maintenance or technical problems. � 10. The Department of Revenue maintains a list of interested persons who wish to receive notices of rulemaking actions proposed by this agency. Persons who wish to have their name added to the list shall make a written request, which includes the name and e-mail or mailing address of the person to receive notices and specifies that the person wishes to receive notices regarding particular subject matter or matters. Notices will be sent by e-mail unless a mailing preference is noted in the request. Such written request may be mailed or delivered to the person in 7 above or faxed to the office at (406) 444-3696, or may be made by completing a request form at any rules hearing held by the Department of Revenue. � 11. The bill sponsor notice requirements of 2-4-302, MCA, do not apply. � � ������������������� /s/ Cleo Anderson�������������������������������������/s/ Dan R. Bucks �������������������CLEO ANDERSON��������������������������������� DAN R. BUCKS ������������������ Rule Reviewer������������������������������������������ Director of Revenue � Certified to Secretary of State November 26, 2007 |
A directory of state agencies is available online at http://www.mt.gov/govt/agencylisting.asp.
For questions about the organization of the ARM or this web site, contact [email protected].
