Senate Bill No. 290
(By Senator Bowman)
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[Introduced January 23, 2002; referred to the Committee
on Finance.]
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A BILL to amend and reenact section five-d, article ten, chapter
eleven of the code of West Virginia, one thousand nine
hundred thirty-one, as amended, relating to specifying
information to be provided to local governments and tax
returns and return information obtained from the tax
commissioner pursuant to an exchange of information
agreement or otherwise pursuant to the provisions of
subsections (d) through (n) ,inclusive, of said section
which is in the possession of any officer, employee, agent
or representative of any local or municipal governmental
entity or other governmental subdivision is subject to the
confidentiality and disclosure restrictions set forth in
said article; and specifying that unlawful disclosure of
such information by any officer, employee or agent of any local, municipal or governmental subdivision is subject to
the sanctions set forth in said article.
Be it enacted by the Legislature of West Virginia:
That section five-d, article ten, chapter eleven of the code
of West Virginia, one thousand nine hundred thirty-one, as
amended, be amended and reenacted to read as follows:
ARTICLE 10. PROCEDURE AND ADMINISTRATION.
§11-10-5d. Confidentiality and disclosure of returns and return
information.
(a) General rule.-- Except when required in an official
investigation by the tax commissioner into the amount of tax due
under any article administered under this article or in any
proceeding in which the tax commissioner is a party before a
court of competent jurisdiction to collect or ascertain the
amount of such tax and except as provided in subsections (d)
through (n) of this section, it shall be unlawful for any
officer, or employee or agent of this state or of any county,
municipality or governmental subdivision to divulge or make
known in any manner the tax return, or any part thereof, of any
person or disclose information concerning the personal affairs
of any individual or the business of any single firm or
corporation, or disclose the amount of income, or any
particulars set forth or disclosed in any report, declaration or return required to be filed with the tax commissioner by any
article of this chapter imposing any tax administered under this
article or by any rule or regulation of the tax commissioner
issued thereunder, or disclosed in any audit or investigation
conducted under this article. For purposes of this article, tax
returns and return information obtained from the tax
commissioner pursuant to an exchange of information agreement or
otherwise pursuant to the provisions of subsections (d) through
(n) of this section which is in the possession of any officer,
employee, agent or representative of any local or municipal
governmental entity or other governmental subdivision is subject
to the confidentiality and disclosure restrictions set forth in
this article: Provided, That such officers, employees or agents
may disclose the information in an official investigation, by a
local or municipal governmental authority or agency charged with
the duty and responsibility to administer the tax laws of the
jurisdiction, into the amount of tax due under any lawful local
or municipal tax administered by that authority or agency, or in
any proceeding in which the local or municipal governmental
subdivision, authority or agency is a party before a court of
competent jurisdiction to collect or ascertain the amount of the
tax. Unlawful disclosure of the information by any officer,
employee or agent of any local, municipal or governmental subdivision is subject to the sanctions set forth in this
article.
(b) Definitions.-- For purposes of this section:
(1) Background file document. The term "background file
document," with respect to a written determination, includes the
request for that written determination, any written material
submitted in support of the request and any communication
(written or otherwise) between the state tax department and any
person outside the state tax department in connection with the
written determination received before issuance of the written
determination.
(2) Disclosure.-- The term "disclosure" means the making
known to any person in any manner whatsoever a return or return
information.
(3) Inspection.-- The terms "inspection" and "inspected"
means any examination of a return or return information.
(4) Return.-- The term "return" means any tax or information
return or report, declaration of estimated tax, claim or
petition for refund or credit or petition for reassessment that
is required by, or provided for, or permitted under the
provisions of this article (or any article of this chapter
administered under this article) which is filed with the tax
commissioner by, on behalf of, or with respect to any person, and any amendment or supplement thereto, including supporting
schedules, attachments or lists which are supplemental to, or
part of, the return so filed.
(5) Return information.-- The term "return information"
means:
(A) A taxpayer's identity; the nature, source or amount of
his or her income, payments, receipts, deductions, exemptions,
credits, assets, liabilities, net worth, tax liability, tax
withheld, deficiencies, overassessments or tax payments, whether
the taxpayer's return was, is being, or will be examined or
subject to other investigation or processing, or any other data
received by, recorded by, prepared by, furnished to or collected
by the tax commissioner with respect to a return or with respect
to the determination of the existence, or possible existence, of
liability (or the amount thereof) or by any person under the
provisions of this article (or any article of this chapter
administered under this article) for any tax, additions to tax,
penalty, interest, fine, forfeiture or other imposition or
offense; and
(B) Any part of any written determination or any background
file document relating to such written determination. "Return
information" does not include, however, data in a form which
cannot be associated with, or otherwise identify, directly or indirectly, a particular taxpayer. Nothing in the preceding
sentence, or in any other provision of this code, shall be
construed to require the disclosure of standards used or to be
used for the selection of returns for examination or data used
or to be used for determining such standards.
(6) Tax administration.-- The term "tax administration"
means:
(A) The administration, management, conduct, direction and
supervision of the execution and application of the tax laws or
related statutes of this state and the development and
formulation of state and local tax policy relating to existing
or proposed state and local tax laws, and related statutes of
this state; and
(B) Includes assessment, collection, enforcement,
litigation, publication and statistical gathering functions
under the laws of this state and of local governments.
(7) Taxpayer identity.-- The term "taxpayer identity"
means the name of a person with respect to whom a return is
filed, his or her mailing address, his or her taxpayer
identifying number or a combination thereof.
(8) Taxpayer return information.-- The term "taxpayer
return information" means return information as defined in
subdivision (5) of this subsection which is filed with, or furnished to, the tax commissioner by or on behalf of the
taxpayer to whom such return information relates.
(9) Written determination.-- The term "written
determination" means a ruling, determination letter, technical
advice memorandum or letter or administrative decision issued by
the tax commissioner.
(c) Criminal penalty.-- Any officer, or employee or agent
(or former officer, or employee or agent) of this state or of
any county, municipality or governmental subdivision who
violates this section shall be guilty of a misdemeanor, and,
upon conviction thereof, shall be fined not more than one
thousand dollars or imprisoned for not more than one year, or
both, together with costs of prosecution.
(d) Disclosure to designee of taxpayer. Any person
protected by the provisions of this article may, in writing,
waive the secrecy provisions of this section for such purpose
and such period as he shall therein state. The tax commissioner
may, subject to such requirements and conditions as he or she
may prescribe, thereupon release to designated recipients such
taxpayer's return or other particulars filed under the
provisions of the tax articles administered under the provisions
of this article, but only to the extent necessary to comply with
a request for information or assistance made by the taxpayer to such other person. However, return information shall not be
disclosed to such person or persons if the tax commissioner
determines that such disclosure would seriously impair
administration of this state's tax laws.
(e) Disclosure of returns and return information for use in
criminal investigations.
(1) In general.-- Except as provided in subdivision (3) of
this subsection, any return or return information with respect
to any specified taxable period or periods shall, pursuant to
and upon the grant of an ex parte order by a federal district
court judge, federal magistrate or circuit court judge of this
state, under subdivision (2) of this subsection, be open (but
only to the extent necessary as provided in such order) to
inspection by, or disclosure to, officers and employees of any
federal agency, or of any agency of this state, who personally
and directly engaged in:
(A) Preparation for any judicial or administrative
proceeding pertaining to the enforcement of a specifically
designated state or federal criminal statute to which this
state, the United States or such agency is or may be a party;
(B) Any investigation which may result in such a proceeding;
or
(C) Any state or federal grand jury proceeding pertaining to enforcement of such a criminal statute to which this state,
the United States or such agency is or may be a party.
Such inspection or disclosure shall be solely for the use
of such officers and employees in such preparation,
investigation, or grand jury proceeding.
(2) Application of order.-- Any United States attorney, any
special prosecutor appointed under Section 593 of Title 28,
United States Code, or any attorney in charge of a United States
justice department criminal division organized crime strike
force established pursuant to Section 510 of Title 28, United
States Code, may authorize an application to a circuit court
judge or magistrate, as appropriate, for the order referred to
in subdivision (1) of this subsection. Any prosecuting attorney
of this state may authorize an application to a circuit court
judge of this state for the order referred to in subdivision (1)
of this subsection. Upon such the application, such the judge
or magistrate may grant such order if he determines on the basis
of the facts submitted by the applicant that:
(A) There is reasonable cause to believe, based upon
information believed to be reliable, that a specific criminal
act has been committed;
(B) There is reasonable cause to believe that the return or
return information is or may be relevant to a matter relating to the commission of such act; and
(C) The return or return information is sought exclusively
for use in a state or federal criminal investigation or
proceeding concerning such act, and the information sought to be
disclosed cannot reasonably be obtained, under the
circumstances, from another source.
(3) The tax commissioner shall may not disclose any return
or return information under subdivision (1) of this subsection
if he determines and certifies to the court that such the
disclosure would identify a confidential informant or seriously
impair a civil or criminal tax investigation.
(f) Disclosure to person having a material interest.-- The
tax commissioner may, pursuant to legislative regulations
promulgated by him or her, and upon such terms as he or she may
require, disclose a return or return information to a person
having a material interest therein: Provided, That such
disclosure shall only be made if the tax commissioner
determines, in his or her discretion, that such the disclosure
would not seriously impair administration of this state's tax
laws.
(g) Statistical use.-- This section shall not be construed
to prohibit the publication or release of statistics so
classified as to prevent the identification of particular returns and the items thereof.
(h) Disclosure of amount of outstanding lien.-- If notice
of lien has been recorded pursuant to section twelve of this
article, the amount of the outstanding obligation secured by
such lien may be disclosed to any person who furnishes written
evidence satisfactory to the tax commissioner that such person
has a right in the property subject to such the lien or intends
to obtain a right in such property.
(i) Reciprocal exchange.-- The tax commissioner may,
pursuant to written agreement, permit the proper officer of the
United States, or the District of Columbia or any other state,
or any political subdivision of this state, or his authorized
representative, who is charged by law with responsibility for
administration of a similar tax, to inspect reports,
declarations or returns filed with the tax commissioner or may
furnish to such officer or representative a copy of any such
document, provided such any other jurisdiction grants
substantially similar privileges to the tax commissioner or to
the attorney general of this state. Such The disclosure shall
be only for the purpose of, and only to the extent necessary in,
the administration of tax laws: Provided, That such the
information shall may not be disclosed to the extent that the
tax commissioner determines that such disclosure would identify a confidential informant or seriously impair any civil or
criminal tax investigation.
(j) Inspection of business and occupation tax returns by
Exchange with municipalities. The tax commissioner shall, upon
the written request of the mayor or governing body of any West
Virginia municipality having a business and occupation tax or
privilege tax, allow the duly authorized agent of such the
municipality to inspect and make copies of the state business
and occupation tax return filed by taxpayers of such the
municipality and any other state tax returns (including, but not
limited to, consumers sales and services tax return information
and health care provider tax return information) as may be
reasonably requested by the municipality. Such inspection or
copying shall include disclosure to the authorized agent of the
municipality for tax administration purposes of all available
return information from files of the tax department relating to
taxpayers who transact business within the municipality. only
be for the purposes of securing information for municipal tax
purposes and shall only be allowed if such municipality allows
the tax commissioner the right to inspect or make copies of the
municipal business and occupation tax returns of such
municipality.
(k) Release of administrative decisions.-- The tax commissioner shall release to the public his administrative
decisions, or a summary thereof: Provided, That unless the
taxpayer appeals the administrative decision to circuit court or
waives in writing his rights to confidentiality, any identifying
characteristics or facts about the taxpayer shall be omitted or
modified to such an extent so as to not disclose the name or
identity of the taxpayer.
(l) Release of taxpayer information.--
(1) If the tax commissioner believes that enforcement of the
tax laws administered under this article will be facilitated and
enhanced thereby, he shall disclose, upon request, the names and
address of persons:
(A) Who have a current business registration certificate.
(B) Who are licensed employment agencies.
(C) Who are licensed collection agencies.
(D) Who are licensed to sell drug paraphernalia.
(E) Who are distributors of gasoline or special fuel.
(F) Who are contractors.
(G) Who are transient vendors.
(H) Who are authorized by law to issue a sales or use tax
exemption certificate.
(I) Who are required by law to collect sales or use taxes.
(J) Who are foreign vendors authorized to collect use tax.
(K) Whose business registration certificate has been
suspended or canceled or not renewed by the tax commissioner.
(L) Against whom a tax lien has been recorded under section
twelve of this article (including any particulars stated in the
recorded lien.
(M) Against whom criminal warrants have been issued for a
criminal violation of this state's tax laws.
(N) Who have been convicted of a criminal violation of this
state's tax laws.
(m) Disclosure of return information to child support
enforcement division.--
(1) State return information.--The tax commissioner may,
upon written request, disclose to the child support enforcement
division created by article two, chapter forty-eight-a of this
code:
(A) Available return information from the master files of
the tax department relating to the social security account
number, address, filing status, amounts and nature of income and
the number of dependents reported on any return filed by, or
with respect to, any individual with respect to whom child
support obligations are sought to be enforced; and
(B) Available state return information reflected on any
state return filed by, or with respect to any individual described in paragraph (A) of this subdivision, relating to the
amount of such the individual's gross income, but only if such
information is not reasonably available from any other source.
(2) Restrictions on disclosure.-- The tax commissioner
shall disclose return information under subdivision (1) of this
subsection only for purposes of, and to the extent necessary in,
collecting child support obligations from, and locating
individuals owing such obligations.
(n) Disclosure of names and addresses for purposes of jury
selection.--
The tax commissioner shall, at the written request of a
circuit court or the chief judge thereof, provide to the circuit
court within thirty calendar days a list of the names and
addresses of individuals residing in the county or counties
comprising the circuit who have filed a state personal income
tax return for the preceding tax year. The list provided shall
set forth names and addresses only. The request shall be
limited to counties within the jurisdiction of the requesting
court.
The court, upon receiving the list or lists, shall direct
the jury commission of the appropriate county to merge the names
and addresses with other lists used in compiling a master list
of residents of the county from which prospective jurors are to be chosen. Immediately after the master list is compiled, the
jury commission shall cause the list provided by the tax
commissioner and all copies thereof to be destroyed and shall
certify to the circuit court and to the tax commissioner that
the lists have been destroyed.
Note: The purpose of this bill is to extend the confidentiality
and nondisclosure protections of tax information, as set forth in
section 11-10-5d of the West Virginia Code, to specifically cover such
information in the possession of local and municipal governments and
agencies and to clarify the scope of information shared with
municipalities.
Strike-throughs indicate language that would be stricken
from the present law, and underscoring indicates new language
that would be added.
This bill is recommended by the Joint Standing Committee on
Government Organization for passage during the 2002 Regular
Session.