2009 - 2010 LEGISLATURE
July 8, 2009 - Introduced by Representatives Sherman, Berceau, Jorgensen,
Nerison, Schneider, Toles, Turner, A. Williams
and Dexter, cosponsored by
Senators Taylor, Grothman, Lehman, Miller and Schultz. Referred to
Committee on State Affairs and Homeland Security.
AB343,1,4 1An Act to amend 71.83 (1) (a) 1., 71.83 (1) (a) 1m., 71.83 (1) (a) 2., 71.83 (1) (a)
23. and 71.83 (1) (a) 4.; and to create 71.09 (11) (e) of the statutes; relating to:
3expanding the secretary of revenue's authority to waive or reduce interest or
4penalties.
Analysis by the Legislative Reference Bureau
Under current law, if an individual, fiduciary, or trust underpays its estimated
tax, the state imposes interest at the rate of 12 percent per year on the amount of the
underpayment, unless one of a number of exceptions apply. The exceptions include
a determination by the secretary of revenue that it is not equitable to impose the
interest, due to casualty, disaster, or other unusual circumstances. Another
exception applies to an individual who had no income or alternative minimum tax
liability for the preceding 12-month taxable year and who was a full-time Wisconsin
resident during that period.
This bill creates another exception. Under the bill, no interest on an
underpayment is due if the secretary of revenue determines that, in the interest of
fairness, no interest should be imposed.
Under current law, certain persons are required to pay civil penalties for
offenses such as failing to file an income or income and franchise tax return by the
statutorily required due date, for failure to file an information return, for filing an
incomplete or incorrect return, for filing an incomplete or incorrect deposit or
withholding report, and for the late filing of a withholding report.

Under this bill the secretary of revenue is authorized to exercise his or her
discretion, in the interest of fairness, to waive or reduce the penalty that would
otherwise be imposed under such circumstances.
For further information see the state fiscal estimate, which will be printed as
an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB343, s. 1 1Section 1. 71.09 (11) (e) of the statutes is created to read:
AB343,2,32 71.09 (11) (e) The secretary of revenue determines that in the interest of
3fairness, no interest should be imposed.
AB343, s. 2 4Section 2. 71.83 (1) (a) 1. of the statutes is amended to read:
AB343,2,175 71.83 (1) (a) 1. `Failure to file.' In case of failure to file any return required
6under s. 71.03, 71.24, 71.44, or 71.775 on the prescribed due date prescribed therefor,
7including any applicable extension of time for filing, unless it is shown that the
8failure is due to reasonable cause and not due to willful neglect, there shall be added
9to the amount required to be shown as tax on the return 5% of the amount of the tax
10if the failure is for not more than one month, with an additional 5% for each
11additional month or fraction thereof during which the failure continues, not
12exceeding 25% in the aggregate. In the interest of fairness, the secretary of revenue
13may exercise his or her discretion to waive or reduce the penalty that would
14otherwise be imposed under this subdivision.
For purposes of this subdivision, the
15amount of tax required to be shown on the return shall be reduced by the amount of
16any part of the tax which is paid on or before the due date prescribed for payment and
17by the amount of any credit against the tax which may be claimed upon the return.
AB343, s. 3 18Section 3. 71.83 (1) (a) 1m. of the statutes is amended to read:
AB343,3,7
171.83 (1) (a) 1m. `Failure to file information return.' If a person fails to file a
2return required under subch. XI by the prescribed due date, including any extension,
3or files an incorrect or incomplete return, that person may be subject to a penalty of
4$10 for each violation. A penalty shall be waived if the person shows that a violation
5is due to reasonable cause and not due to willful neglect. In the interest of fairness,
6the secretary of revenue may exercise his or her discretion to waive or reduce the
7penalty that would otherwise be imposed under this subdivision.
AB343, s. 4 8Section 4. 71.83 (1) (a) 2. of the statutes is amended to read:
AB343,3,229 71.83 (1) (a) 2. `Incomplete or incorrect return.' If any person required under
10this chapter to file an income or franchise tax return files an incomplete or incorrect
11return, unless it is shown that such filing was due to good cause and not due to
12neglect, there shall be added to such person's tax for the taxable year 25% of the
13amount otherwise payable on any income subsequently discovered or reported. The
14amount so added shall be assessed, levied and collected in the same manner as
15additional normal income or franchise taxes, and shall be in addition to any other
16penalties imposed by this chapter. In the interest of fairness, the secretary of
17revenue may exercise his or her discretion to waive or reduce the penalty that would
18otherwise be imposed under this subdivision.
In this subdivision, "return" includes
19a separate return filed by a spouse with respect to a taxable year for which a joint
20return is filed under s. 71.03 (2) (g) to (L) after the filing of that separate return, and
21a joint return filed by the spouses with respect to a taxable year for which a separate
22return is filed under s. 71.03 (2) (m) after the filing of that joint return.
AB343, s. 5 23Section 5. 71.83 (1) (a) 3. of the statutes is amended to read:
AB343,4,1324 71.83 (1) (a) 3. `Incomplete or incorrect deposit or withholding report.' If any
25person required under subch. X to file a deposit report or withholding report files an

1incomplete or incorrect report, or fails to properly withhold or fails to properly
2deposit or pay over withheld funds, unless it can be shown that the filing or failure
3was due to good cause and not due to neglect, there shall be added to the tax 25% of
4the amount not reported or not withheld, deposited or paid over. The amount so
5added shall be assessed, levied and collected in the same manner as additional
6income or franchise taxes, and shall be in addition to any other penalties imposed in
7this subchapter. In the interest of fairness, the secretary of revenue may exercise his
8or her discretion to waive or reduce the penalty that would otherwise be imposed
9under this subdivision.
"Person", in this subdivision, includes an officer or employee
10of a corporation or other responsible person or a member or employee of a partnership
11or limited liability company or other responsible person who, as such officer,
12employee, member or other responsible person, is under a duty to perform the act in
13respect to which the violation occurs.
AB343, s. 6 14Section 6. 71.83 (1) (a) 4. of the statutes is amended to read:
AB343,4,2415 71.83 (1) (a) 4. `Late filing of withholding report.' In case of failure to file any
16withholding deposit or payment report required under s. 71.65 (3) on the prescribed
17due date prescribed therefor, unless it is shown that the failure is due to reasonable
18cause and not due to willful neglect, there shall be added to the amount required to
19be shown as withheld taxes on the report 5% of the amount if the failure is not for
20more than one month, with an additional 5% for each additional month or fraction
21thereof during which the failure continues, not exceeding 25% in the aggregate. In
22the interest of fairness, the secretary of revenue may exercise his or her discretion
23to waive or reduce the penalty that would otherwise be imposed under this
24subdivision.
AB343, s. 7 25Section 7. Initial applicability.
AB343,5,2
1(1) This act first applies to the finding, determination, or exercise of discretion
2made by the secretary of revenue on the effective date of this subsection.
AB343,5,33 (End)
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