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LCPA ANNUAL LIAISON MEETING

Louisiana Department of Revenue Velecial S. Rodman Baton Rouge, LA November 17, 2011. LCPA ANNUAL LIAISON MEETING.

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LCPA ANNUAL LIAISON MEETING

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  1. Louisiana Department of Revenue Velecial S. Rodman Baton Rouge, LA November 17, 2011 LCPA ANNUAL LIAISON MEETING

  2. Revised Statute 47:1604.1 provides that if a taxpayer fails to file a required tax return or files an incorrect return, and the circumstances indicate negligence or disregard of rules and regulations but no intent to defraud, a negligence penalty may be imposed. • The penalty is calculated at 5% of the tax or deficiency found to be due, or $10, whichever is greater. • Negligence penalty can be abated. Waiver request must be submitted in writing. NEGLIGENCE PENALTY

  3. The No Account Number Penalty is a negligence penalty and will be assessed if a taxpayer fails to include the LDR account number or uses a federal id number on the Louisiana Corporation Income and Franchise return. • For the first offense, we are not abating the full amount of the penalty. A portion of the penalty will have to be paid depending on the amount assessed. • If the penalty is $1,000.00 or greater, the penalty is reduced to $250; less than $1000 is reduced to $50; less than $499 is reduced to $25.00. If the penalty is $10.00, the amount is not reduced. • If the penalty is assessed again, the taxpayer will have to pay the full amount due. WHEN IS A NEGLIGENCE PENALTY ASSESSED

  4. A negligence penalty is assessed when multiple returns are filed late. • A negligence penalty is assessed when the incorrect tax form is used to file the Non Resident Professional Athletes form. WHEN IS A NEGLIGENCE PENALTY ASSESSED

  5. LDR has not imposed a post amnesty “supercharged” penalty. POST AMNESTY PENALTY

  6. There is statutory authority to assess an underpayment estimated tax penalty (UET) on corporation income and franchise tax, but currently LDR is not assessing the penalty. • However, a UET is assessed on individual income tax. The penalty can be abated. The waiver request must be submitted in writing. CORPORATE AND INDIVIDUAL UNDERPAYMENT AND PENALTY ASSESSMENTS

  7. R.S. 47:1603 provides that if the failure to file a return or report on time or the failure to timely remit the full amount due is not due to the negligence of the taxpayer, but is due to other causes set forth in written form and considered reasonable, the Secretary may waive the penalty in whole or in part. PENALTY WAIVER PROCEDURES

  8. All penalty waiver requests shall be signed by the taxpayer or his representative . If the combined penalties for a tax period exceed one hundred ($100.00) dollars, all of the facts alleged as a basis for reasonable cause must be fully disclosed in an affidavit sworn before a notary public in the presence of two witnesses and accompanied by any supporting documentation. PENALTY WAIVER PROCEDURES

  9. In lieu of an affidavit, the taxpayer may submit a Request for Waiver of Penalties for Delinquency Form (R-20128) signed by the taxpayer, or in the case of a corporation, by an officer of the corporation. • Each waiver request submitted by the taxpayer will be considered on an individual basis. The reason(s) submitted should be detailed and any supporting documentation should be submitted along with the request. PENALTY WAIVER PROCEDURES

  10. Before a penalty waiver can be considered, the taxpayer must be current in filing all tax returns and all tax and interest must be paid. • All tax periods not being considered for waiver, all taxes, interest, penalties and fees administered by the Department of Revenue must be paid. PENALTY WAIVER PROCEDURES

  11. When the penalty exceeds $5,000, the waiver must be approved by the Board of Tax Appeals. • Upon the written recommendation from the division or regional director, the penalty waiver request shall be evaluated by the appropriate Assistant Secretary and forwarded to the Secretary or Deputy Secretary for approval. • If a waiver is approved, the request will be forwarded to the Board of Tax Appeals (BTA) with a recommendation that the penalty be waived. PENALTY WAIVER PROCEDURES

  12. After a waiver request has been approved by the BTA, it is returned to LDR for processing. • The appropriate adjustments will be made to the account and an approval letter will be mailed to the taxpayer or representative. • If the waiver request is denied, the penalty waiver does not have to be forwarded to BTA. A denial letter will be mailed to the taxpayer or representative. PENALTY WAIVER PROCEDURES

  13. Jeopardy warrants are issued by LDR under the provision of Title 47:1566. • If the department finds that a taxpayer may depart from the state or remove any property subject to any tax , a Jeopardy warrant and lien can be issued. • The request must be received in writing and approved by the director of the Collection Division. JEOPARDY ASSESSMENTS

  14. Most requests are from our Criminal Investigation Division and our Regional Offices. • When the tax dollars are considered to be in jeopardy, the issuance of a Jeopardy Tax assessment and lien receives top priority. JEOPARDY ASSESSMENTS

  15. LDR receives clearance requests daily by fax from Secretary of State. LDR personnel research the entire account to verify all returns have been filed and there are no outstanding balances. • Taxpayer must be current in filing and all outstanding liabilities must be paid in full to receive a Secretary of State Clearance. The corporation returns must be filed through the date the taxpayer withdraws from Secretary of State. SECRETARY OF STATE CLEARANCES

  16. Before a clearance is issued on an LLC, all members are checked to make sure they have no outstanding liabilities or delinquent returns to be filed. • If the account has no balances and all returns have been filed, a clearance letter is faxed to the Secretary of State. • If the account has outstanding liabilities and returns need to be filed, we contact the taxpayer to advise what needs to be done. SECRETARY OF STATE CLEARANCES

  17. Tax Period/bill item must be in seizable status (warrant) at least 75 days prior to assignment to collection agency. • Once assigned, the taxpayer needs to contact the collection agency to make full payment or to enter into an installment agreement. • Attorney General’s (AG) – collection fee is 15% • Diversified Collection Services’ (DCS)- collection fee is 18.5% • AG and DCS collection fees are not waivable. PROCEDURES FOR HANDLING 3RD PARTY COLLECTIONS

  18. If the taxpayer fails to contact the collection agency to make payment arrangements, a bank levy or wage garnishment may be prepared. • There are temporary personnel whose sole function is to prepare bank levies and wage garnishments on delinquent accounts. PROCEDURES FOR HANDLING 3RD PARTY COLLECTIONS

  19. Attorney General 1885 North 3rd Street, Suite 5012 Baton Rouge, LA 70802 225-326-6650 or 1-800-423-2129, option 2 • Andrea Zuniga DCS (Diversified Collection Services, Inc.) 333 North Canyons Pkwy., Suite 100 Livermore, CA 94551 1-800-866-5317 ext. 3702 3rd Party Contact Information

  20. If there is a tax period with an existing liability and a tax period(s) with an existing refund and /or credit, the overpayment will be applied to the oldest liability. • Cross period offsets are applied to tax, penalty and then interest. • Cross period offsets don’t occur until after the due date of the destination period. PROCEDURES FOR HANDLING LDR OFFSETS

  21. Currently, we are not automatically offsetting credits on the following taxes: • Severance • Withholding • Tobacco • IFTA PROCEDURES FOR HANDLING LDR OFFSETS

  22. Self Assessment • Return filed with no errors • No Remittance or only partial remittance included • A 30 Day bill is issued; it progresses to a warrant. • A Statement of Account (SOFA) - notification the liability is in seizable status. The SOFA contains a summary of all outstanding tax periods in a billing stage. • Notice of Intent to Offset and/or suspend licenses. This letter is sent to individual income tax filers by certified mail. BILLING NOTICES

  23. Proposed Assessment • No return filed but identified to be due such as the Federal/State match for individual income tax • Returns filed with errors, audit assessments, RARs, CP2000s and returns adjusted by an LDR employee • 30 Day Notice (Proposed Assessment) • 60 Day Notice (Formal Assessment) – This notice is sent by certified mail. • Warrant or seizable status BILLING NOTICES

  24. Statement of Account (SOFA)-notification the liability is in seizable status. The SOFA contains a summary of all outstanding tax periods in a billing stage. • Notice of Intent to Offset and/or Suspend Licenses. This letter is sent to individual income tax filers by certified mail. BILLING NOTICES

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