Title: Federal Taxation

Summary: Authorizes CFO to reimburse owner of small business attorney fees & costs from IRS Civil Liability Trust Fund; provides for action in court for award of attorney fees & costs, actual damages, & punitive damages when IRS is found to have committed violations; provides third party settlement organizations are required to submit information to DOR only for participating payees in this state; requires OFR to submit annual report to FSC & Legislature.

Full Text:
An act relating to the federal taxation; creating s. 17.45, F.S.; providing definitions; authorizing the Chief Financial Officer to reimburse an owner of a small business attorney fees and costs from the Internal Revenue Service Civil Liability Trust Fund under certain conditions; requiring the Department of Financial Services to certify certain information before such reimbursement; providing that the identi ty of a small business is not affected by certain changes; requiring the department to adopt rules; creating s. 72.042, F.S.; providing for an action in circuit court for an award of attorney fees and costs, actual damages, and punitive damages when the In ternal Revenue Service is found to have committed certain violations; requiring an action brought in circuit court to be filed within a specified period; amending s. 212.134, F.S.; making grammatical changes; providing definitions; providing that certain third party settlement organizations are required to submit certain information to the Department of Revenue only for participating payees in this state if certain conditions are met and subject to certain limitations; requiring certain third party settleme nt organizations to create and maintain certain records; amending s. CS/HB 2023 655.045, F.S.; requiring a report submitted by a financial institution to the Financial Services Commission to include certain information received from the Internal Revenue Service; requ iring the Office of Financial Regulation to submit an annual report to the commission and Legislature by a specified date; providing an effective date. Be It Enacted by the Legislature of the State of Florida: Section 1. Section 17.45, Florida St atutes, is created to read: 17.45 Reimbursement for retaliatory taxation proceedings.-(1) As used in this section, the term: (a) "Domiciled in this state" means authorized to do business in this state and located in this state. (b) "Retaliatory" means any proceeding initiated in part to discriminate against or target a taxpayer on the basis of his or her political affiliation, ideology, or beliefs, as determined by a court of competent jurisdiction. (c) "Small business" means any business entity, regardless of corporate structure, that is domiciled in this state, that employs or fewer employees, and that generated an average annual gross revenue of $4 million or less per year for the preceding years. CS/HB 2023 (d) "Trust fund" means The Internal Rev enue Service Civil Liability Trust Fund created under s. 17.44. (2) Any owner of a small business against which the Internal Revenue Service initiates proceedings in the United States Tax Court may submit an application to the department for reimbursemen tof reasonable attorney fees and costs necessarily incurred in the proceedings, provided that all of the following criteria have been satisfied: (a) The small business owner is the prevailing party in the proceeding before the United States Tax Court. (b) The United States Tax Court determines that the proceedings were retaliatory. (c) The application is accompanied by a copy of the attorney's retainer agreement and fee or billing statements for the entire period of representation in the proceedings before the United States Tax Court. (d) The application and accompanying documentation is submitted to the department within days after receipt of a final order or other pleading concluding the proceedings before the United States Tax Court. (e) The small business owner has not been previously awarded attorney fees or costs related to the proceedings before the United States Tax Court. (3) If the criteria in subsection (2) are met, the department shall certify the amount of the reimbursement and the CS/HB 2023 name of the applicant to the Chief Financial Officer, who shall reimburse the applicant from the trust fund. (4) For purposes of this section, the identity of a small business is not affect ed by a change in name or by a change in personnel. (5) The department shall adopt rules to implement this section. Section 2. Section 72.042, Florida Statutes, is created to read: 72.042 Tax liabilities arising under federal law; jurisdiction of circuit courts.-(1) If, in connection with the collection of federal taxes concerning a taxpayer domiciled in this state, an action is brought in a federal district court of competent jurisdiction against any officer or employee of the Internal Revenue Service, or any independent contractor employed by the Internal Revenue Service, for a violation of: (a) Title VI of the Civil Rights Act of 1964; (b) Title VII of the Civil Rights Act of 1964; (c) Title of the Internal Revenue Code of 1986, as amended; (d) The First Amendment to the United States Constitution; (e) The Fourth Amendment to the United States Constitution; or (f) The Fifth Amendment to the United States Constitution, CS/HB 2023 the taxpayer may bring an action in circuit court pursuant to subsection (2) or subsection (3). (2) In any action brought in a federal district court of competent jurisdiction pursuant to paragraph (1)(a), paragraph (1)(b), or paragraph (1)(c), upon a finding by the federal district court that a violation has occur red, the circuit court may award: (a) Actual damages sustained by the taxpayer, which, but for the actions of the Internal Revenue Service, would not have been sustained. (b) Attorney fees and costs. (3) In any action brought in a federal district co urt of competent jurisdiction pursuant to paragraph (1)(d), paragraph (1)(e), or paragraph (1)(f), upon a finding by the federal district court that a violation has occurred, the circuit court may award: (a) Actual damages sustained by the taxpayer, whic h, but for the actions of the Internal Revenue Service, would not have been sustained. (b) Punitive damages, provided that the provisions of s. 768.72 are met. (c) Attorney fees and costs. (4) Notwithstanding any other provision of law, an action filed in circuit court pursuant to this section must be filed CS/HB 2023 within years after the date the cause of action accrues. Section 3. Subsections (1) through (4) of section 212.134, Florida Statutes, are renumbered as subsections (2) through (5), respective ly, present subsections (1) and (2) are amended, and new subsections (1) and (6) are added to that section, to read: 212.134 Information returns relating to payment-card and third party third-party network transactions.-(1) For purposes of this sectio n, the term: (a) "Participating payee" has the same meaning as in s. 6050W of the Internal Revenue Code. (b) "Payment settlement entity" has the same meaning as in s. 6050W of the Internal Revenue Code. (c) "Return" or "information return" means IRS Form 1099-K required under s. 6050W of the Internal Revenue Code. (d) "Third party network transactions" has the same meaning as in s. 6050W of the Internal Revenue Code. (e) "Third party settlement organization" has the same meaning as in s. 6050W of the Internal Revenue Code. (2)(1) For each year in which a payment settlement entity, an electronic payment facilitator, or other third party contracted with the payment settlement entity to make payments to settle reportable payment transactions on beh alf of the payment settlement entity must file a return pursuant to s. 6050W of the Internal Revenue Code, for participating payees with an address in this state, the entity, the facilitator, or CS/HB 2023 the third party must submit the information in the return to the department by the 30th day after filing the federal return. The format of the information returns required must be either a copy of such information returns or a copy of how such information return would have been filed had this section applied at the federal level returns related to participating payees with an address in the state.For purposes of complying with this section, a third party settlement organization must submit the information in the return to the department only for participating payees with an address in this state whose aggregate third party network transactions for goods and services exceed $600 For purposes of this subsection, the term "payment settlement entity" has the same meaning as provided in s. 6050W of the Internal Revenue Co de. (3)(2) All returns reports submitted to the department under this section must be in an electronic format. (6) A third party settlement organization participating in a third party network transaction involving a participating payee with an address in this state must create and maintain records that clearly identify whether a transaction is a transaction for goods or services, or both, if such information is available at the time of the third party network transaction. The information in the return submitted to the department under subsection (2) for such entities must be limited to transactions for goods and services as supported by the records under this CS/HB 2023 subsection. Section 4. Subsections (3) and (4) of section 655.045, Florida Statutes, are re numbered as subsections (4) and (5), respectively, subsection (2) is amended, and a new subsection (3) is added to that section, to read: 655.045 Examinations, reports, and internal audits; penalty.-(2)(a) Each state financial institution, subsidiary, or service corporation shall submit a report, at least four times each calendar year, as of such dates as the commission or office determines. The report must include:1. The number of inquiries, requests, summons, subpoenas, or other requests for info rmation or records received from the Internal Revenue Service concerning any account holder domiciled in this state. 2. Such other information as the commission by rule requires for that type of institution. (b)(a) The office shall levy an administrati ve fine of up to $100 per day for each day the report is past due, unless it is excused for good cause. (c)(b) For an intentional late filing of the report, the office shall levy an administrative fine of up to $1,000 per day for each day the report is past due. (3) By January of each year, the office shall submit a report that contains the information from the quarterly reports CS/HB 2023 required under subsection (2) to the commission, the President of the Senate, and the Speaker of the House of Representativ es. Section 5. This act shall take effect July 1, 2023.