Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2021
Sales And Use Tax Law
CHAPTER 8. ADMINISTRATION
Article 3. The California Taxpayers' Bill of Rights*
7093.5. Settlement authority. (a) It is the intent of the Legislature that the State Board of Equalization, its staff, and the Attorney General pursue settlements as authorized under this section with respect to civil tax matters in dispute that are the subject of protests, appeals, or refund claims, consistent with a reasonable evaluation of the costs and risks associated with litigation of these matters.
(b) (1) Except as provided in paragraph (3) and subject to paragraph (2), the executive director or chief counsel, if authorized by the executive director, of the board may recommend to the State Board of Equalization, itself, a settlement of any civil tax matter in dispute.
(2) No recommendation of settlement shall be submitted to the board, itself, unless and until that recommendation has been submitted by the executive director or chief counsel to the Attorney General. Within 30 days of receiving that recommendation, the Attorney General shall review the recommendation and advise in writing the executive director or chief counsel of the board of his or her conclusions as to whether the recommendation is reasonable from an overall perspective. The executive director or chief counsel shall, with each recommendation of settlement submitted to the board, itself, also submit the Attorney General's written conclusions obtained pursuant to this paragraph.
(3) A settlement of any civil tax matter in 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 executive director and chief counsel, jointly. The executive director shall notify the board, itself, of any settlement approved pursuant to this paragraph.
(c) Whenever a reduction of tax or penalties or total tax and penalties in settlement in excess of five hundred dollars ($500) is approved pursuant to this section, there shall be placed on file, for at least one year, in the office of the executive director of the board a public record with respect to that settlement. The public record shall include all of the following information:
(1) The name or names of the taxpayers who are parties to the settlement.
(2) The total amount in dispute.
(3) The amount agreed to pursuant to the settlement.
(4) A summary of the reasons why the settlement is in the best interests of the State of California.
(5) For any settlement approved by the board, itself, 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) The members of the State Board of Equalization shall not participate in the settlement of tax matters pursuant to this section, except as provided in subdivision (e).
(e) (1) Any recommendation for settlement shall be approved or disapproved by the board, itself, within 45 days of the submission of that recommendation to the board. Any recommendation for settlement that is not either approved or disapproved by the board within 45 days of the submission of that recommendation shall be deemed approved. Upon approval of a recommendation for settlement, the matter shall be referred back to the executive director or chief counsel in accordance with the decision of the board.
(2) Disapproval of a recommendation for settlement shall be made only by a majority vote of the board. Where the board disapproves a recommendation for settlement, the matter shall be remanded to board staff for further negotiation, and may be resubmitted to the board, in the same manner and subject to the same requirements as the initial submission, at the discretion of the executive director or chief counsel.
(f) 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.
(g) Any proceedings undertaken by the board itself pursuant 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 considered or entered into pursuant to this section shall constitute confidential tax information for purposes of Section 7056.
(h) This section shall apply only to civil tax matters in dispute on or after the effective date of the act adding this subdivision.
(i) The Legislature finds that it is essential for fiscal purposes that the settlement program authorized by this section be expeditiously implemented. Accordingly, Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code shall not apply to any determination, rule, notice, or guideline established or issued by the board in implementing and administering the settlement program authorized by this section.
History—Added by Stats. 1992, Ch. 708, in effect September 15, 1992. Stats. 1993, Ch. 75, in effect June 30, 1993, and Ch. 155, in effect July 19, 1993, substituted "1993" for "1992" and "1994" twice for "1993" in subdivision (f). Stats. 1993, Ch. 868, in effect January 1, 1994, substituted "January 1, 1994" for "July 1, 1993" and added second paragraph in subdivision (f). Stats. 1994, Ch. 138, in effect July 7, 1994, added new subdivision (a); renumbered former paragraph (1) of subdivision (a) as paragraph (1) of subdivision (b), deleted "In addition to the authority provided by Section 7093 and" after "(1)" and substituted "Subject" for "subject" after "(1)", therein; deleted former paragraph (3) of subdivision (a) which read, "The members of the board shall not participate in the settlement of these tax matters, except as provided in subdivision (c)."; relettered former subdivision (b) as (c) and added "settlement in" after "tax in" therein; substituted "in dispute" for "involved" in paragraph (2) and substituted "agreed to" for "payable or refundable" in paragraph (3) of subdivision (c); added new subdivision (d); relettered former subdivisions (c), (d), (e), (f), and (g) as (e), (f), (g), (h), and (i), respectively; substituted "(c)" for "(b)" after "subdivision" in subdivision (g); and substituted "in dispute … subdivision" for "disputes existing on January 1, 1994, with respect to which recommendations for settlement, pursuant to paragraph (2) of subdivision (a), are first submitted to the Attorney General no later than June 30, 1994, and are first submitted to the board no later than September 15, 1994. With respect to civil tax matter disputes that did not exist on September 1, 1993, but that existed on January 1, 1994, this section shall apply only to determinations issued during that interval and to payments made pursuant to those determinations." after "tax matter" in subdivision (h). Stats. 2000, Ch. 923 (AB 2894), in effect January 1, 2001, substituted "Except as provided … subject" for "Subject" in subparagraph (1), added "itself," after "to the board," in the first and third sentences of subparagraph (2), and added subparagraph (3) in subdivision (b); added "or penalties … and penalties" after "reduction of tax" in subdivision (c); substituted "For any … itself, the" for "The" in subparagraph (5) of subdivision (c); added ", itself" after "by the board" in the second sentence of subparagraph (1) of subdivision (e); added "considered or" after "any settlement" in the second sentence of subdivision (g); and substituted "matters" for "matter" after "civil tax" in subdivision (h). Stats. 2003, Ch. 605 (SB 1060), in effect January 1, 2004, added ", for at least one year," after "placed on file" in subdivision (c).
* Article 3 was added by Stats. 1988, Ch. 1574, in effect January 1, 1989.