The purpose of the proposed amendments to Rule Chapter 12-13, F.A.C. (Compromise and Settlement), is to: (1) update provisions for the compromise or settlement of outstanding liabilities for tax, penalty, interest, and services fees to include ...

 

DEPARTMENT OF REVENUE

RULE NO.: RULE TITLE:
12-13.001: Scope of Rules
12-13.003: Request for Settlement or Compromise
12-13.004: Delegation of Authority to Determine Settlements or Compromises
12-13.0063: Grounds for Finding Department Delay in the Determination of an Amount Due
12-13.0064: Relief for Inadvertent Sales and Use Tax Registration Errors
12-13.007: Grounds for Reasonable Cause for Compromise of Penalties
12-13.0075: Guidelines for Determining Amount of Compromise
12-13.008: Procedures for Compromise and Settlement of Taxes, Interest, and Penalties
12-13.009: Closing Agreements

PURPOSE AND EFFECT: The purpose of the proposed amendments to Rule Chapter 12-13, F.A.C. (Compromise and Settlement), is to: (1) update provisions for the compromise or settlement of outstanding liabilities for tax, penalty, interest, and services fees to include changes to Sections 212.07(9), 212.12(14), 213.21, 213.24(3), and 215.34, F.S., since the last update to the rule chapter; (2) remove the requirement that a taxpayer’s written request be required for the Department to settle or compromise such outstanding liabilities; and (3) remove unnecessary or redundant provisions.

The purpose of the proposed amendments to Rule 12-13.001, F.A.C. (Scope of Rules), is to provide that the rule chapter, as amended, includes provisions for the settlement or compromise of outstanding liabilities for tax, penalty, interest, and services fees, as provided in Sections 212.07(9), 212.12(14), 213.21, 213.24(3), and 215.34, F.S.

The purpose of the proposed repeal of Rule 12-13.003, F.A.C. (Request for Settlement or Compromise), is to remove provisions regarding a taxpayer’s request for settlement or compromise that are redundant of Rule 12-13.008, F.A.C. (Procedures for Compromise and Settlement of Taxes, Interest, and Penalties), as amended, and to remove unnecessary provisions regarding requests for settlement or compromise that are not submitted to the Department in writing.

The purpose of the proposed amendments to Rule 12-13.004, F.A.C. (Delegation of Authority to Determine Settlements or Compromises), is to update the delegations of authority authorized by the Executive Director of the Department to settle or compromise a taxpayer’s assessment to reflect the absorption of the Compliance Support Process by the Refunds and Distribution Process within the General Tax Administration Program.

The purpose of the creation of Rule 12-13.0063 (Grounds for Finding Department Delay in the Determination of an Amount Due), is to include the provisions of Section 213.21(3)(a), F.S., and provide when the Department will compromise interest to the extent that the delay in determining an amount due is attributable to the action or inaction of the Department.

The purpose of the creation of Rule 12-13.0064 (Relief for Inadvertent Sales and Use Tax Registration Errors), is to provide, consistent with the provisions of Section 212.07(9), F.S., when a vendor or purchaser qualifies to pay a mandatory penalty instead of the taxes, penalties, and interest that would otherwise be due on transactions for which the purchaser did not pay tax to the vendor. The failure to pay the tax to the vendor must be based on a good faith belief that the transaction was a tax-exempt purchase for resale or was a tax-exempt purchase by a tax-exempt organization.

The purpose of the proposed amendments to Rule 12-13.007, F.A.C. (Grounds for Reasonable Cause for Compromise of Penalties), is to remove requirements for taxpayers to submit the facts and circumstances of the exercise of ordinary care and prudence to the Department in writing, allowing the Department to document the facts and circumstances of the exercise of ordinary care and prudence by the taxpayer in the Department’s records.

The purpose of the proposed amendments to Rule 12-13.0075, F.A.C. (Guidelines for Determining Amount of Compromise), is to: (1) provide when the Department is authorized under Section 213.21(10), F.S., to compromise sales tax penalties for failure to file a complete and accurate return, or for failure to timely pay the tax due on a return, when the taxpayer has one noncompliant filing event in the preceding 12-month period; (2) provide when the Department is authorized under Section 213.21(9), F.S., to settle or compromise any penalty imposed under Section 212.12, F.S., for failure to collect based on a good faith belief that the tax, surtax, or surcharge was not due; (3) provide when a dealer will not be held liable for tax, penalty, or interest under Section 212.12(14), F.S., when the dealer failed to apply the appropriate tax bracket system when collecting sales tax; (4) provide when the administrative collection processing fee imposed under Section 213.24(3), F.S., may be waived due to extraordinary circumstances; (5) provide when the service fee for returned payments imposed by Section 215.34(2), F.S., will be compromised for unintentional errors by the taxpayer, the financial institution, or the Department; (7) clarify that the Department will compromise all penalties when payment of delinquent tax and interest results from voluntary, written self-disclosure; and (8) remove provisions redundant of Rule 12-13.007(9), F.A.C.

The purpose of the proposed amendments to Rule 12-13.008, F.A.C. (Procedures for Compromise and Settlement of Taxes, Interest, and Penalties), is to provide that a taxpayer will only be required to submit a written request for compromise or settlement of outstanding liabilities for tax, penalty, interest, or service fees when: (1) the request to settle or compromise is for an amount greater than $30,000; (2) the complexity of the issues involved requires that the taxpayer submit a written request to explain the issues; or, (3) the taxpayer asks to submit the request in writing. Department employees authorized to settle or compromise such outstanding liabilities continue to be required to document the facts and circumstances of the settlement or compromise in the Department’s records.

The purpose of the proposed amendments to Rule 12-13.009, F.A.C. (Closing Agreements), is to (1) remove provisions regarding the delegation of authority by the Executive Director of the Department that are redundant of Rule 12-13.004, F.A.C.; and (2) to remove the incorporation, by reference, of Form DR-812, Closing Agreement, which does not meet the definition of a “rule,” as provided in Section 120.52(16), F.S., and is not required to be adopted as a rule.

SUBJECT AREA TO BE ADDRESSED: The subject area of the workshop is the proposed changes to Rule Chapter 12-13, F.A.C. (Compromise and Settlement), to update provisions for administering the Department’s authority to compromise or settle outstanding liabilities for tax, penalty, interest, and services fees granted in Sections 212.07(9), 212.12(14), 213.21, 213.24(3), and 215.34, F.S.

RULEMAKING AUTHORITY: 212.07(9)(c), 213.06(1), 213.21(5), (9) FS.
LAW IMPLEMENTED: 212.07(9), 212.12(14), 213.05, 213.015(18), (20), 213.21, 213.24(3), 215.34(2) FS.

IF REQUESTED IN WRITING AND NOT DEEMED UNNECESSARY BY THE AGENCY HEAD, A RULE DEVELOPMENT WORKSHOP WILL BE HELD AT THE DATE, TIME AND PLACE SHOWN BELOW:

DATE AND TIME: August 8, 2012, 9:00 a.m.

PLACE: 2450 Shumard Oak Boulevard, Building One, Room 1220, Tallahassee, Florida

Pursuant to the provisions of the Americans with Disabilities Act, any person requiring special accommodations to participate in this workshop/meeting is asked to advise the agency at least 48 hours before the workshop/meeting by contacting: Tammy Miller at [phone]. If you are hearing or speech impaired, please contact the agency using the Florida Relay Service, 1(800)955- 8771 (TDD) or 1(800)955-8770 (Voice).

THE PERSON TO BE CONTACTED REGARDING THE PROPOSED RULE DEVELOPMENT AND A COPY OF THE PRELIMINARY DRAFT, IF AVAILABLE, IS: Janet Young, Tax Law Specialist, Technical Assistance and Dispute Resolution, Department of Revenue, P. O. Box 7443, Tallahassee, Florida 32314-7443, telephone [phone]

THE PRELIMINARY TEXT OF THE PROPOSED RULE DEVELOPMENT IS PUBLISHED ON THE DEPARTMENT’S INTERNET SITE AT: myflorida.com/dor/rules.