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Business Taxes Law Guide—Revision 2024
Use Fuel Tax Law
Revenue and Taxation Code
Division 2. Other Taxes
Part 3. Use Fuel Tax
Chapter 7. Administration.
Article 2. The California Taxpayers' Bill of Rights1
Section 9271
9271. Settlement of disputed tax liabilities. [Repealed by Stats. 1995, Ch. 497, in effect January 1, 1996.]
9271. Settlement authority. (a) It is the intent of the Legislature that the department, 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 (2), no recommendation of settlement shall be submitted to the director for approval unless and until that recommendation has been submitted by the chief counsel to the Attorney General. Within 30 days of receiving that recommendation, the Attorney General shall review the recommendation and advise the chief counsel, in writing, of their conclusions as to whether the recommendation is reasonable from an overall perspective. The chief counsel shall, with each recommendation of settlement submitted to the director, also submit the Attorney General's written conclusions obtained pursuant to this paragraph.
(2) (A) 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 eleven thousand five hundred dollars ($11,500), may be approved by the director.
(B) Beginning on July 1, 2029, and each fifth fiscal year thereafter, the department shall adjust the amount specified in subparagraph (A) by increasing that amount by a percentage amount equal to the increase in the California Consumer Price Index, as calculated by the Department of Finance, with the resulting amount rounded to the nearest one hundred dollars ($100). The first adjustment pursuant to this subparagraph shall be a percentage amount equal to the increase in the California Consumer Price Index from January 1, 2024, to January 1, 2029. Subsequent fifth fiscal year adjustments shall cover subsequent five-year periods. The incremental change shall be added to the previously adjusted amount.
(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 director 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) (A) For any settlement approved by the director, except those settlements approved pursuant to paragraph (2) of subdivision (b), the Attorney General's conclusion as to whether the recommendation of settlement was reasonable from an overall perspective.
(B) 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 director 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 director within 45 days of the submission of that recommendation to the director. Any recommendation for settlement that is not either approved or disapproved by the director within 45 days of the submission of that recommendation shall be deemed approved.
(2)Where the director disapproves a recommendation for settlement, at the discretion of the director and chief counsel, the matter shall be remanded to staff for further negotiation, and may be resubmitted to the director, in the same manner and subject to the same requirements as the initial submission.
(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) 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 9255.
(h) 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 department in implementing and administering the settlement program authorized by this section.
(i) The amendments made to this section by the act adding this subdivision shall apply to any settlements approved on or after January 1, 2024.
History—Stats. 1995, Ch. 497, in effect January 1, 1996. Stats. 2003, Ch. 605 (SB 1060), effective January 1, 2004, added ",for at least one year," after "there shall be placed on file" in the first sentence of subdivision (c). Stats. 2006, Ch. 364 (AB 3076), in effect January 1, 2007, substituted "Except as provided in paragraph (3) and subject" for "Subject" before "to paragraph (2)" in paragraph (1) of, added ",itself," after "submitted to the board" in the first and third sentences of paragraph (2) of, and added paragraph (3) to subdivision (b); added ", or penalties, or total tax and penalties" after "a reduction of tax" in the first paragraph of and substituted "For any settlement approved by the board, itself, the" for "The" before "Attorney General's conclusion" in the first sentence of paragraph (5) of subdivision (c); added ",itself," after "disapproved by the board" in the second sentence of subdivision (e)(1); and added "considered or" after "any settlement" in the second sentence of subdivision (g). Amended by Stats. 2023, ch. 511 (SB 889), effective January 1, 2024, substituted "director" for "board" and "board, itself," throughout; substituted "department" for "State Board of Equalization" after Legislature that the" in subdivision (a); repealed paragraph (1) of subdivision (b); renumbered former paragraph (2) of subdivision (b) as paragraph (1) of the same subdivision; substituted "Except as … no" for "No" in the beginning of paragraph (1) of subdivision (b); substituted "director for approval" for "board, itself," after "submitted to the" and deleted "executive director or" after "submitted by the" in the first sentence of paragraph (1) of subdivision (b); substituted "the chief counsel … of their" for ", in writing … of his or her" after "recommendation and advise" in the second sentence of paragraph (1) of subdivision (b); deleted "executive director or" after "The" in the beginning of the last sentence of paragraph (1) of subdivision (b); renumbered former paragraph (3) of subdivision (b) as subparagraph (2)(A) of subdivision (b); substituted "eleven thousand … ($11,500)" for "five thousand … ($5,000)" after does not exceed in subparagraph (2)(A) of subdivision (b); substituted "director" for "executive director … jointly" after "approved by the" and repealed the last sentence in subparagraph (2)(A) of subdivision (b); added subparagraph (2)(B) to subdivision (b); substituted "director" for "executive director of the board" after "in the office of the" in the first sentence of subdivision (c); redesignated the first and second sentences of paragraph (5) of subdivision (c) as subparagraphs (5)(A) and (5)(B) of the same subdivision, respectively; substituted "director, except … of subdivision (b)," for "board, itself," after "approved by the" in subparagraph (5)(A) of subdivision (c); substituted "director" for "member of … Equalization" after "The" in subdivision (d); repealed the last sentence of paragraph (1) of subdivision (e); repealed the first sentence of paragraph (2) of subdivision (e); added "at the discretion … chief counsel," after "recommendation for settlement" and deleted "board" after "shall be remanded to" and ", at the discretion … chief counsel" after "as the initial subdivision" in paragraph (2) of subdivision (e); repealed former first sentence of subdivision (g); repealed former subdivision (h); relettered former subdivision (i) as subdivision (h); substituted "department" for "board" after "issued by the" in subdivision (h); and added subdivision (i).
1 Article 2 was added by Stats. 1992, Ch. 438, in effect January 1, 1993.