Tuesday, February 3, 2009

New Tax Commission policy on settlements

Posted By on Tue, Feb 3, 2009 at 4:16 PM

The Idaho State Tax Commission has beefed up its own internal rules for handling tax bill settlement agreements in the wake of a continuing non-scandal. Or semi-scandal.

As the Legislature waits on a full report of the Tax Commission's secret deal-making with companies that owe back taxes, tax commissioners met with their staff at a recent open meeting to approve a new internal policy.

citydesk was there, the only member of the public in the room, except for Senate Local Government and Taxation Committee Chairman Brent Hill, who is a CPA. So we were at a distinct disadvantage.

The new policy, written by Tax Commission attorney Ted Spangler and two other colleagues, lays out two overarching goals in deciding tax protests: to protect the taxpayer's rights and to resolve the differences between the taxpayer and the agency staff on the tax bill.

"It's not a mistake the order that they are listed in; we deliberately put the taxpayers rights to a fair and impartial review as the first one," Spangler told the commissioners.

Scroll down to read the new policy.

Last summer, one of the commission's senior auditors filed a whistleblower report alleging that commissioners regularly settle with out-of-state companies without any legal basis for lowering the tax amount.

The report led to a series of reviews of the settlement procedure, each of which exonerated the commissioners. A governor's review included several recommendations to the tax commission, including beefing up its policies.

One of the clarifications in the new policy is that on settlements exceeding $50,000, two commissioners are required to sign off. While this has been in writing for some time, it is not always followed.

Copies of two prior Tax Commission settlement policies show that in past years, three commissioners were required to review large settlements, and were able to file their concerns with the settlement, but that was changed in February 2008.

The legislative tax committees are still waiting to see a final report detailing each of the commission's settlements in the past year, a report that commission chairman Royce Chigbrow said is almost complete.

"We will address all of the points in the Gentry [report]," Chigbrow said, referring to the governor's review of the commission's settlement procedures. "This is only the start of our report to the Idaho Legislature."

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