September 2011 Special Session Date of enactment:
November 16, 2011
Senate Bill 23 Date of publication*:
December 1, 2011
2011 WISCONSIN ACT 68
An Act to amend 71.09 (11) (d), 71.78 (1m) (a), 71.83 (1) (a) 1., 71.83 (1) (a) 1m., 71.83 (1) (a) 2., 71.83 (1) (a) 3., 71.83 (1) (a) 4., 71.83 (3) (a), 72.06, 73.01 (4) (e) 2., 76.05 (2), 76.14, 76.28 (6) (b), 76.39 (3), 76.645 (2) (intro.), 77.60 (2) (intro.), 77.60 (3), 77.60 (4), 77.61 (5) (a), 77.76 (3), 77.76 (3m), 77.76 (3p), 77.95, 77.982 (2), 77.982 (3), 77.991 (2), 77.9941 (5), 77.9951 (2), 77.9964 (2), 77.9972 (2), 78.68 (3), 78.68 (4), 139.11 (4) (a), 139.25 (3), 139.25 (4), 139.38 (6), 139.82 (6), 227.12 (3), 227.41 (1), 227.41 (3), 227.41 (4), 227.483 (1) and 803.08; and to create 73.015 (3), 73.16, 77.61 (6), 227.12 (4) and 227.41 (5) of the statutes; relating to: various duties of the Department of Revenue, including issuing declaratory judgments, conducting audits and assessments, asserting liability, allowing claims for refunds, awarding the costs of litigation, prohibiting browsing of returns and claims, imposing penalties related to a taxpayer's negligence, requiring the exercise of rule-making authority, and providing a penalty.
The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:
68,1
Section
1. 71.09 (11) (d) of the statutes is amended to read:
71.09 (11) (d) The secretary of revenue determines that the taxpayer retired during the taxable year or during the preceding taxable year after having attained age 62 or becoming disabled and that the underpayment was due to reasonable cause and not due to willful neglect except that this paragraph does not apply upon a showing by the department under s. 73.16 (4).
68,2
Section
2. 71.78 (1m) (a) of the statutes is amended to read:
71.78 (1m) (a) No person, except the person who filed the return or claim, may inspect a return or claim, or any information derived from a return or claim, that is filed under this chapter unless that person does so in performing the duties of his or her position. Violation of this paragraph by a state employee is grounds for dismissal.
68,3
Section
3. 71.83 (1) (a) 1. of the statutes is amended to read:
71.83 (1) (a) 1. `Failure to file.' In case of failure to file any return required under s. 71.03, 71.24, 71.44, or 71.775 on the due date prescribed therefor, including any applicable extension of time for filing, unless it is shown that the failure is due to reasonable cause and not due to willful neglect and upon a showing by the department under s. 73.16 (4), there shall be added to the amount required to be shown as tax on the return 5% of the amount of the tax if the failure is for not more than one month, with an additional 5% for each additional month or fraction thereof during which the failure continues, not exceeding 25% in the aggregate. For purposes of this subdivision, the amount of tax required to be shown on the return shall be reduced by the amount of any part of the tax which is paid on or before the due date prescribed for payment and by the amount of any credit against the tax which may be claimed upon the return.
68,4
Section
4. 71.83 (1) (a) 1m. of the statutes is amended to read:
71.83 (1) (a) 1m. `Failure to file information return.' If a person fails to file a return required under subch. XI by the prescribed due date, including any extension, or files an incorrect or incomplete return, that person may be subject to a penalty of $10 for each violation. A penalty shall be waived if the person shows that a violation is due to reasonable cause and not due to willful neglect except upon a showing by the department under s. 73.16 (4).
68,5
Section
5. 71.83 (1) (a) 2. of the statutes is amended to read:
71.83 (1) (a) 2. `Incomplete or incorrect return.' If any person required under this chapter to file an income or franchise tax return files an incomplete or incorrect return, unless it is shown that such filing was due to good cause and not due to neglect and upon a showing by the department under s. 73.16 (4), there shall be added to such person's tax for the taxable year 25% of the amount otherwise payable on any income subsequently discovered or reported. The amount so added shall be assessed, levied and collected in the same manner as additional normal income or franchise taxes, and shall be in addition to any other penalties imposed by this chapter. In this subdivision, "return" includes a separate return filed by a spouse with respect to a taxable year for which a joint return is filed under s. 71.03 (2) (g) to (L) after the filing of that separate return, and a joint return filed by the spouses with respect to a taxable year for which a separate return is filed under s. 71.03 (2) (m) after the filing of that joint return.
68,6
Section
6. 71.83 (1) (a) 3. of the statutes is amended to read:
71.83 (1) (a) 3. `Incomplete or incorrect deposit or withholding report.' If any person required under subch. X to file a deposit report or withholding report files an incomplete or incorrect report, or fails to properly withhold or fails to properly deposit or pay over withheld funds, unless it can be shown that the filing or failure was due to good cause and not due to neglect and upon a showing by the department under s. 73.16 (4), there shall be added to the tax 25% of the amount not reported or not withheld, deposited or paid over. The amount so added shall be assessed, levied and collected in the same manner as additional income or franchise taxes, and shall be in addition to any other penalties imposed in this subchapter. "Person", in this subdivision, includes an officer or employee of a corporation or other responsible person or a member or employee of a partnership or limited liability company or other responsible person who, as such officer, employee, member or other responsible person, is under a duty to perform the act in respect to which the violation occurs.
68,7
Section
7. 71.83 (1) (a) 4. of the statutes is amended to read:
71.83 (1) (a) 4. `Late filing of withholding report.' In case of failure to file any withholding deposit or payment report required under s. 71.65 (3) on the due date prescribed therefor, unless it is shown that the failure is due to reasonable cause and not due to willful neglect upon a showing by the department under s. 73.16 (4), there shall be added to the amount required to be shown as withheld taxes on the report 5% of the amount if the failure is not for more than one month, with an additional 5% for each additional month or fraction thereof during which the failure continues, not exceeding 25% in the aggregate.
68,8
Section
8. 71.83 (3) (a) of the statutes is amended to read:
71.83 (3) (a) If any person required under this chapter to file an income or franchise tax return fails to file a return within the time prescribed by law, or as extended under s. 71.03 (7), 71.24 (7) or 71.44 (3), unless the return is filed under such an extension but the person fails to file a copy of the extension that is granted by or requested of the internal revenue service, the department shall add $50 to the person's tax if the return is filed under subch. I of this chapter or $150 to the person's tax if the return is filed under subch. IV or VII of this chapter. If no tax is assessed against any such person the amount of this fee shall be collected as income or franchise taxes are collected. If any person who is required under s. 71.65 (3) to file a withholding report and deposit withheld taxes fails timely to do so and upon a showing by the department under s. 73.16 (4); unless the person so required dies or the failure is due to a reasonable cause and not due to neglect; the department of revenue shall add $50 to the amount due except that if the person is subject to taxation under subch. IV or VII of this chapter the department shall add $150 to the amount due.
68,9
Section
9. 72.06 of the statutes is amended to read:
72.06 Confidentiality of tax returns. Sections 71.78 (1), (1m), and (4) to (9) and 71.83 (2) (a) 3. and 3m. apply to any information obtained from any person by the department on a death tax return, report, schedule, exhibit or other document or from an audit report pertaining to the tax return.
68,10
Section
10. 73.01 (4) (e) 2. of the statutes is amended to read:
73.01 (4) (e) 2. Except for hearings on ss. 341.405 and 341.45, the department of revenue may choose not to appeal and to nonacquiesce in the decision or order by sending a notice of nonacquiescence to the clerk of the commission, to the legislative reference bureau for publication in the Wisconsin administrative register and to the taxpayer or the taxpayer's representative before the time expires for seeking a review of the decision or order under s. 73.015. The effect of this action is that, although the decision or order is binding on the parties for the instant case and the decision or order may be cited by the commission and the courts, the commission's conclusions of law, the rationale and construction of statutes in the instant case are not binding upon or required to be followed by the department of revenue in other cases.
68,11
Section
11. 73.015 (3) of the statutes is created to read:
73.015 (3) Except for decisions and orders in small claims matters, as defined in s. 73.01 (1) (b), a conclusion of law or other holding in any decision or order of the tax appeals commission may be cited by the commission or the courts as authority unless that conclusion of law or holding has been reversed, overruled, or vacated on the merits on appeal or by a subsequent decision or order of the commission.
68,12
Section
12. 73.16 of the statutes is created to read:
73.16 General provision. (1) Definitions. In this section:
(a) "Commonly controlled group" has the meaning given in s. 71.255 (1) (c).
(b) "Department" means the department of revenue.
(c) "Person who is a party to the determination" means a person who requests a determination for that person's benefit, files a claim for a refund, or is assessed by the department, but not including any of the following:
1. A person who, on behalf of another person, requests a determination or a claim for a refund or appeals a determination.
2. A shareholder of a tax-option corporation, a member of a limited liability company, or a partner of a partnership, unless such an individual is named or identified in the determination, claim for a refund, or assessment.
3. An anonymous person who requests a determination.
(d) "Published" means prepared and issued for public distribution and does not include guidance on a private matter or issue.
(e) "Written guidance" means a written statement made by an employee of the department acting in an official capacity regarding a Wisconsin tax question to the person or the person's representative.
(2) Relying on published guidance. (a) Except as provided in par. (b), in the course of any determination, or in the course of any proceeding appealing any determination, the department shall not take a position that is contrary to any rule promulgated by the department that was in effect during the period related to the determination or that is contrary to any guidance published by the department prior to that period and not subsequently retracted, altered, or amended by the department or the legislature or by a final and conclusive decision of the tax appeals commission or courts.
(am) Except as provided in par. (c), in the course of any determination, or in the course of any proceeding appealing a determination, the department shall not take a position that is contrary to any written guidance that was provided to a person who is a party to the determination or the appeal of the determination regarding the same facts as in the determination and not subsequently retracted, altered, or amended by the department or the legislature or by a final and conclusive decision of the tax appeals commission or courts.
(b) The department may retroactively apply any rule change that is related to implementing a legislative act or a final and conclusive decision of the tax appeals commission or the courts to take effect no earlier than the act's effective date or the date on which the decision became final and conclusive, unless otherwise prescribed by the legislature, tax appeals commission, or court, and only if the department submits the rule's scope statement to the governor for approval under s. 227.135 (2) no later than 18 months after the latter of the legislative act's publication date, effective date, or initial applicability date, or the date on which the decision becomes final and conclusive. A retroactive application of a rule change not described under this paragraph shall be subject to approval under s. 227.185.
(c) With regard to any position taken by the department in any matter described under par. (am), if the department retracts, alters, or amends previously published or previously issued written guidance for any purpose other than to implement a legislative act or final and conclusive decision of the tax appeals commission or courts, the department shall apply the retraction, alteration, or amendment prospectively only, unless the change is to a taxpayer's benefit, in which case, the department shall apply the retraction, alteration, or amendment retroactively. A retroactive change in any previously published or previously issued written guidance related to implementing a legislative act or final and conclusive decision of the tax appeals commission or courts may take effect no earlier than the act's effective date or the date on which the decision became final and conclusive unless otherwise prescribed by the legislature or ordered by the courts.
(4) Negligence determinations. The department shall not impose a penalty on a taxpayer under ss. 71.09 (11) (d), 71.83 (1) (a) 1. to 4. and (3) (a), 76.05 (2), 76.14, 76.28 (6) (b), 76.39 (3), 76.645 (2), 77.60 (2) (intro.), (3), and (4), 78.68 (3) and (4), and 139.25 (3) and (4), unless the department shows that the taxpayer's action or inaction was due to the taxpayer's willful neglect and not to reasonable cause.
(5) Applicability. Except as provided in sub. (4), notwithstanding any other provision of law, this section applies to all taxes and fees administered by the department.
68,13
Section
13. 76.05 (2) of the statutes is amended to read:
76.05 (2) No Upon a showing by the department under s. 73.16 (4), no company shall be allowed in any action or proceeding to question the amount or valuation of its property as assessed by the department unless such company shall have made and filed with the department a full and complete report of the facts and information prescribed by s. 76.04 and called for by the department thereunder, provided that the refusal or neglect of such company to file the report in time may on application of the company and for good cause shown be excused by the department on condition that such. If the department has not made a showing under s. 73.16 (4), the company shall make a full and complete report of all facts and information mentioned in said s. 76.04 within 15 days after notice by mail of the amount of the assessment of the property of such company, and shall appear before the department at a time designated by it and make a full disclosure of all property liable to assessment and taxation under this subchapter and show the full value of such property to the satisfaction of the department.
68,14
Section
14. 76.14 of the statutes is amended to read:
76.14 Remedies for nonpayment of taxes. All taxes levied under this subchapter upon the property of any company defined in s. 76.02, which are not paid at the time provided by law, shall thereupon become delinquent and bear interest at the rate of 1.5% per month until actually paid. The neglect Upon a showing by the department under s. 73.16 (4), the failure of any such company to pay the taxes and interest so required of the company within 60 days after the entry of final judgment dismissing in whole or in part any action of the company to restrain or set aside a tax, or the neglect failure of the company within 60 days after the entry of final judgment in favor of the state for the taxes and interest to pay the judgment shall be cause for forfeiture of all the rights, privileges and franchises granted by special charter or obtained under general laws, by or under which the company is organized and its business is operated. The attorney general upon such neglect the showing by the department under s. 73.16 (4) shall proceed by action to have forfeiture of such rights, privileges and franchises of the company duly declared. Any such company, at any time before the final judgment for forfeiture of such rights, privileges and franchises is rendered, may be permitted upon good cause shown, absent a showing by the department under s. 73.16 (4), to pay the taxes, interest and the costs of the action upon special application to the court in which the action is pending upon such terms as the court directs.
68,15
Section
15. 76.28 (6) (b) of the statutes is amended to read:
76.28 (6) (b) If any light, heat and power company that is required under this section to file a report fails to file a report within the time prescribed by law or as extended under sub. (7), unless it is shown that the failure is due to reasonable cause and not due to willful neglect and upon a showing by the department under s. 73.16 (4), there shall be added to the amount required to be shown as license fees on the report 5% of the amount of such fees if the failure is for not more than one month, with an additional 5% for each additional month or fraction thereof during which the failure continues, not exceeding 25% in the aggregate.
68,16
Section
16. 76.39 (3) of the statutes is amended to read:
76.39 (3) Every railroad company operating in this state shall file annually with the department, on or before April 15, on a form prepared by the department, a true and accurate statement of all rentals paid to each car line company during the previous calendar year and shall remit to the department the amount of the tax required to be withheld under sub. (2). Every car line company, which during the previous calendar year has received gross earnings in this state from a source other than a railroad company operating in this state, shall, on or before April 15, on a form prepared by the department, file with the department a true and accurate statement of such gross earnings in this state and the name of the company from which received and shall remit to the department the amount of the tax imposed under sub. (2) on such gross earnings in this state. The payment dates provided for in sub. (3a) shall apply. Upon written request received by the department before April 15, the department may grant an extension of not to exceed 30 days for the filing of the report and the payment of the taxes levied in this section. If any railroad company or car line company fails to file such report when due, or as extended by the department, unless it is shown that the failure is due to reasonable cause and not due to willful neglect and upon a showing by the department under s. 73.16 (4), there shall be added to the amount required to be shown as gross earnings tax on the report 5% of the amount thereof if the failure is for not more than one month, with an additional 5% for each additional month or fraction thereof during which the failure continues, not exceeding 25% in the aggregate. If any railroad company or car line company fails to pay all taxes due within the time prescribed or as extended by the department, the unpaid taxes shall be delinquent, and shall be subject to interest under sub. (4). All taxes, late filing fees, penalties and interest shall be deposited in the general fund.
68,17
Section
17. 76.645 (2) (intro.) of the statutes is amended to read:
76.645 (2) Negligence. (intro.) An insurer that fails to pay an amount due, or file a return required, under s. 76.64, unless the insurer shows that the failure is due to reasonable cause and not due to willful neglect and upon a showing by the department of revenue under s. 73.16 (4), is liable for the greater of the following amounts:
68,18
Section
18. 77.60 (2) (intro.) of the statutes is amended to read:
77.60 (2) (intro.) Delinquent Upon a showing by the department under s. 73.16 (4), delinquent sales and use tax returns shall be subject to a $20 late filing fee unless the return was not timely filed because of the death of the person required to file or unless the return was not timely filed due to good cause and not due to neglect. The fee shall not apply if the department has failed to issue a seller's permit or a use tax registration within 30 days of the receipt of an application for a seller's permit or use tax registration accompanied by the fee established under s. 73.03 (50), if the person does not hold a valid certificate under s. 73.03 (50), and the security required under s. 77.61 (2) has not been placed with the department. Delinquent sales and use taxes shall bear interest at the rate of 1.5% per month until paid. The taxes imposed by this subchapter shall become delinquent if not paid:
68,19
Section
19. 77.60 (3) of the statutes is amended to read:
77.60 (3) If due to neglect an incorrect return is filed, and upon a showing by the department under s. 73.16 (4), the entire tax finally determined shall be subject to a penalty of 25%, or 50% in the case of returns under s. 77.61 (1) (c), of the tax exclusive of interest or other penalty. A person filing an incorrect return shall have the burden of proving that the error or errors were due to good cause and not due to neglect.
68,20
Section
20. 77.60 (4) of the statutes is amended to read:
77.60 (4) In case of failure to file any return required under authority of s. 77.58 by the due date, determined with regard to any extension of time for filing, unless it is shown that such failure was due to reasonable cause and not due to neglect and upon a showing by the department under s. 73.16 (4), there shall be added to the amount required to be shown as tax on such return 5% of the amount of such tax if the failure is not for more than one month, with an additional 5% for each additional month or fraction thereof during which such failure continues, not exceeding 25% in the aggregate. For purposes of this subsection, the amount of tax required to be shown on the return shall be reduced by the amount of any part of the tax which is paid on or before the due date prescribed for payment of the tax and by the amount of any credit against the tax which may be claimed upon the return.
68,21
Section
21. 77.61 (5) (a) of the statutes is amended to read:
77.61 (5) (a) It is unlawful for the department or any person having an administrative duty under this subchapter to make known in any manner whatever the business affairs, operations or information obtained by an investigation of records and equipment of any retailer or any other person visited or examined in the discharge of official duty, or the amount or source of income, profits, losses, expenditures, or any particular thereof, set forth or disclosed in any return, or to permit any return or copy thereof to be seen or examined by any person. This paragraph does not prohibit the department of revenue from publishing statistics classified so as not to disclose the identity of particular returns or reports and the items thereof. This paragraph does not prohibit employees or agents of the department of revenue from offering or submitting information obtained by investigation or any return or any schedule, exhibit or writing pertaining to a return or any copy of, or information derived from, any of those documents as evidence into the record of any contested matter involving the department in proceedings or litigation on state tax matters if that evidence has reasonable probative value. This paragraph does not prohibit employees or agents of the department of revenue from informing a buyer or seller who has filed a claim for a refund that a refund has been paid to a seller or buyer with respect to the same transaction.
68,22
Section
22. 77.61 (6) of the statutes is created to read:
77.61 (6) (a) No person, except the person who filed the return or claim, may inspect a return or claim, or any information derived from a return or claim, that is filed under this subchapter unless that person does so in performing the duties of his or her position. Violation of this paragraph by a state employee is grounds for dismissal.
(b) If any person is charged with a violation of par. (a), the secretary of revenue shall notify each taxpayer whose return or claim was improperly inspected by that person.
(c) Any person who is notified under par. (b) may bring an action for damages in regard to the inspection.
(d) Any person who violates par. (a) shall upon conviction be fined not less than $100 nor more than $500 or imprisoned for not less than one month nor more than 6 months or both.
68,23
Section
23. 77.76 (3) of the statutes is amended to read:
77.76 (3) From the appropriation under s. 20.835 (4) (g) the department shall distribute 98.25% of the county taxes reported for each enacting county, minus the county portion of the retailers' discounts, to the county and shall indicate the taxes reported by each taxpayer, no later than 75 days following the last day of the calendar quarter in which such amounts were reported. In this subsection, the "county portion of the retailers' discount" is the amount determined by multiplying the total retailers' discount by a fraction the numerator of which is the gross county sales and use taxes payable and the denominator of which is the sum of the gross state and county sales and use taxes payable. The county taxes distributed shall be increased or decreased to reflect subsequent refunds, audit adjustments and all other adjustments of the county taxes previously distributed. Interest paid on refunds of county sales and use taxes shall be paid from the appropriation under s. 20.835 (4) (g) at the rate paid by this state under s. 77.60 (1) (a). The county may retain the amount it receives or it may distribute all or a portion of the amount it receives to the towns, villages, cities and school districts in the county. Any county receiving a report under this subsection is subject to the duties of confidentiality to which the department of revenue is subject under s. 77.61 (5) and (6).
68,24
Section
24. 77.76 (3m) of the statutes is amended to read:
77.76 (3m) From the appropriation under s. 20.835 (4) (gb) the department, for the first 2 years of collection, shall distribute 97% of the taxes reported for each local professional baseball park district that has imposed taxes under this subchapter, minus the district portion of the retailers' discounts, to the local professional baseball park district no later than the end of the 3rd month following the end of the calendar quarter in which such amounts were reported. From the appropriation under s. 20.835 (4) (gb) the department, after the first 2 years of collection, shall distribute 98.5% of the taxes reported for each local professional baseball park district that has imposed taxes under this subchapter, minus the district portion of the retailers' discount, to the local professional baseball park district no later than the end of the 3rd month following the end of the calendar quarter in which such amounts were reported. At the time of distribution the department shall indicate the taxes reported by each taxpayer. In this subsection, the " district portion of the retailers' discount" is the amount determined by multiplying the total retailers' discount by a fraction the numerator of which is the gross local professional baseball park district sales and use taxes payable and the denominator of which is the sum of the gross state and local professional baseball park district sales and use taxes payable. The local professional baseball park district taxes distributed shall be increased or decreased to reflect subsequent refunds, audit adjustments and all other adjustments of the local professional baseball park district taxes previously distributed. Interest paid on refunds of local professional baseball park district sales and use taxes shall be paid from the appropriation under s. 20.835 (4) (gb) at the rate paid by this state under s. 77.60 (1) (a). Any local professional baseball park district receiving a report under this subsection is subject to the duties of confidentiality to which the department of revenue is subject under s. 77.61 (5) and (6).
68,25
Section
25. 77.76 (3p) of the statutes is amended to read:
