An Act To Promote Fair and Efficient Resolutions in Tax Disputes
Maine Legislature, Session 125, LD 1371
Committee: Taxation
Sponsors: KNIGHT, TRAHAN, BERRY, BURNS, CHASE, CLARK, FLEMINGS, HARMON, KESCHL, WATERHOUSE
Amends: 36 MRSA §143, 36 MRSA §151, 36 MRSA §151-A, 36 MRSA §151-B, 36 MRSA §151-C, 36 MRSA §191

Legislative Document 
No. 1371 
H.P. 1010 
House of Representatives, March 31, 2011 
An Act To Promote Fair and Efficient Resolutions in Tax Disputes 
Reference to the Committee on Taxation suggested and ordered printed. 
HEATHER J.R. PRIEST 
Clerk 
Presented by Representative KNIGHT of Livermore Falls. 
Cosponsored by Senator TRAHAN of Lincoln and 
Representatives: BERRY of Bowdoinham, BURNS of Whiting, CHASE of Wells, CLARK of 
Easton, FLEMINGS of Bar Harbor, HARMON of Palermo, KESCHL of Belgrade, 
WATERHOUSE of Bridgton. 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1.  36 MRSA §143, first ¶, as amended by PL 1999, c. 708, §7, is further 
amended to read: 
The State Tax Assessor may compromise a tax liability arising under this Title upon 
the grounds of doubt as to liability or doubt as to collectibility, or both.  Upon acceptance 
by the assessor of an offer in compromise, the liability of the taxpayer in question is 
conclusively settled and neither the taxpayer nor the assessor may reopen the case except 
by reason of falsification or concealment of assets by the taxpayer, fraud or mutual 
mistake of a material fact or if, in the opinion of the assessor, justice requires.  The 
decision of the assessor to reject an offer in compromise is not subject to review under 
section 151.  The assessor's authority to compromise a tax liability pursuant to this 
section is separate from and in addition to the assessor's authority to cancel or abate a tax 
liability pursuant to section 142. 
Sec. 2.  36 MRSA §151, as amended by PL 2003, c. 242, §1, is repealed and the 
following enacted in its place: 
§151.  Review of decisions of State Tax Assessor 
1.  Petition for reconsideration.  A person who is subject to an assessment by the 
State Tax Assessor or entitled by law to receive notice of a determination of the assessor 
and who is aggrieved as a result of that action may request in writing, within 30 days after 
receipt of notice of the assessment or the determination, reconsideration by the assessor 
of the assessment or the determination.  If a person receives notice of an assessment and 
does not file a petition for reconsideration within the specified time period, a review is 
not available in Superior Court regardless of whether the taxpayer subsequently makes 
payment and requests a refund. 
2.  Reconsideration by division.  If a petition for reconsideration is filed within the 
specified time period, the assessor shall reconsider the assessment or the determination as 
provided in this subsection. 
A.  Upon receipt by the assessor, all petitions for reconsideration must be forwarded 
for review and response to the division in the bureau from which the determination 
issued. 
B.  Within 90 days of receipt of the petition for reconsideration by the responding 
division, the division shall approve or deny, in whole or in part, the relief requested.  
Prior to rendering its decision and during the 90 days, the division may attempt to 
resolve issues with the petitioner through informal discussion and settlement 
negotiations with the objective of narrowing the issues for an appeals conference or 
court review, and may concede or settle individual issues based on the facts and the 
law, including the hazards of litigation.  By mutual consent of the division and the 
petitioner, the 90 days may be extended for good cause, such as to allow further 
factual investigation or litigation of an issue by that or another taxpayer pending in 
court. 
C.  If the matter between the division and the petitioner is not resolved within the 
90-day period, and any extension thereof, the matter must be forwarded to the appeals 
office. 
D.  A reconsideration by the division is not an adjudicatory proceeding within the 
meaning of that term in the Maine Administrative Procedure Act. 
Sec. 3.  36 MRSA §151-A, sub-§3 is enacted to read: 
3.  Notice provided to attorney.  A taxpayer does not have notice of a determination 
or other action by the assessor if the assessor has been presented with a valid power of 
attorney and does not comply with that taxpayer’s requests that the assessor communicate 
with the person designated by the taxpayer as attorney in accordance with the taxpayer’s 
specifications, including by sending all notices and other correspondence with the 
taxpayer to the attorney in lieu of or in addition to sending such correspondence to the 
taxpayer, until such time as the person’s attorney receives actual notice of such 
determination or other action. 
Sec. 4.  36 MRSA §151-B is enacted to read: 
§151-B.  Independent Appeals Office 
1.  Office established.  There is established within the bureau the Independent 
Appeals Office, referred to in this chapter as "the appeals office." 
2.  Composition of appeals office; Chief Appeals Officer.  The appeals office 
consists of the Chief Appeals Officer, at least one administrative staff person and other 
appeals officers as designated by the Chief Appeals Officer. 
3.  Appointment.  The Chief Appeals Officer must be appointed by the assessor and 
shall manage the work of the appeals office, including designating an appeals officer to 
preside over each matter forwarded to the appeals office pursuant to section 151, 
subsection 2, paragraph C.  Each appeals officer must be a citizen of the United States 
and must have substantial knowledge of the tax laws. 
4.  Appeals.  An appeal of a decision arising from a petition for reconsideration filed 
pursuant to section 151, subsection 1 must be conducted pursuant to this subsection. 
A.  If requested by the petitioner in the petition for reconsideration, the appeals office 
shall hold an appeals conference to receive additional information and to hear 
arguments regarding the protested assessment or determination.  The petitioner shall 
pay a processing fee of $100 for each petition that proceeds to an appeals conference, 
except that this fee is waived if the total amount in controversy is less than $5,000 or 
when good cause, as determined by the Chief Appeals Officer, for waiver is shown. 
The appeals office shall provide the petitioner with at least 10 working days' notice of 
the date, time and place of the appeals conference.  The appeals conference may be 
held with fewer than 10 working days' notice if a mutually convenient time and place 
can be arranged. 
B.  An appeals officer shall preside over the appeals conference.  The appeals officer 
has all the authority of the assessor with respect to the conduct of proceedings of the 
appeals conference, including, but not limited to, the power to question any person 
who testifies and to direct the course of the appeal. 
C.  If the petitioner does not include a request for an appeals conference in the 
petition, the appeals officer shall determine the matter based on written submissions 
by the petitioner and the division within the bureau making the original 
determination. 
D.  Both the petitioner and the responding division may submit the following to the 
appeals officer whether or not an appeals conference has been requested:  written 
testimony in the form of an affidavit; documentary evidence; and written legal 
argument or written factual argument, or both.  In addition, if an appeals conference 
is held, both the petitioner and the responding division may present oral testimony or 
oral legal argument, or both.  The appeals officer need not observe the rules of 
evidence observed by courts, but shall observe the rules of privilege recognized by 
law.  If the appeals officer considers it appropriate, the appeals officer may encourage 
the petitioner and the responding division to resolve disputed issues through 
settlement or stipulation.  The appeals officer may limit the issues to be heard or vary 
any procedure adopted for the conduct of the appeals conference if the parties agree 
to that limitation. 
E.  Except when otherwise provided by law, the petitioner has the burden of proving, 
by a preponderance of the evidence, that the assessor has erred in applying or 
interpreting the relevant law. 
F.  The appeals officer shall exercise independent judgment.  The appeals officer may 
not have any ex parte communications with any person, including the petitioner, the 
responding division, the assessor or any other employee of the bureau except those 
employees in the appeals office; however, the appeals officer may have ex parte 
communication limited to questions that involve ministerial or administrative matters 
that do not address the substance of the issues or position taken by the petitioner or 
the responding division. 
G.  The appeals officer shall render a decision based upon the evidence and argument 
presented to the appeals officer by parties to the proceeding.  The decision must be in 
written form and must state findings of fact and conclusions of law.  The decision of 
the appeals officer is deemed the assessor's determination on reconsideration and is 
not subject to review or revision by the assessor or any employee of the bureau 
outside of the appeals office.  Notice of the final decision or order to the petitioner 
must be made in accordance with section 111, subsection 2.  Notice of the final 
decision or order must be made to the responding division via the state interoffice 
mail system. 
H.  The appeal proceeding, with or without the appeals conference, is not an 
adjudicatory proceeding within the meaning of that term in the Maine Administrative 
Procedure Act. 
5.  Denial of appeal.  If the requested appeal involves a denial or deemed denial of a 
refund claim, a refund claim with respect to which a conference has been requested under 
section 5280 or an assessment that is paid in full or part and the appeals office fails to 
mail to the petitioner a decision on the appeal within 9 months after the petition for 
reconsideration was filed, the petitioner may elect but is not obligated to deem the appeal 
denied.  The petitioner elects to deem the appeal denied by filing in Superior Court a 
petition for review of the deemed denial.  The deemed denial constitutes final agency 
action and is subject to court review as provided in subsection 6.  The petitioner may not 
make the deemed denial election after either the appeals officer's decision has been 
received by the petitioner or the expiration of 9 years following the filing of the 
reconsideration petition, whichever occurs first.  Notwithstanding any other provision of 
law, a claim for credit or refund of any tax imposed under this Title is deemed denied 10 
years after it was filed if the claim has not previously been allowed or denied as final 
agency action.  A deemed denial constitutes final agency action. 
6.  Review by court.  The decision of the appeals officer on the petition for appeal 
constitutes the assessor's final determination and final agency action, which is subject to 
review by the Superior Court in accordance with the Maine Administrative Procedure 
Act, except that Title 5, sections 11006 and 11007 do not apply.  Upon petition filed by 
either the taxpayer or the assessor, the Superior Court shall conduct a de novo hearing 
and make a de novo determination of the merits of the case.  Either the taxpayer or the 
assessor may raise on appeal in Superior Court any facts, arguments or issues that relate 
to the assessor's decision on the petition for reconsideration, regardless of whether the 
facts, arguments or issues were raised during the reconsideration proceeding being 
appealed, as long as the facts, arguments or issues are not barred by any other provision 
of law.  The Superior Court shall make its own determination as to all questions of fact or 
law, regardless of whether the questions of fact or law were raised during the petition for 
reconsideration proceeding.  The Superior Court shall enter such orders and decrees as 
the case may require.  The burden of proof is on the taxpayer, except as otherwise 
provided by law. 
Sec. 5.  36 MRSA §151-C is enacted to read: 
§151-C.  Taxpayer advocate 
1.  Appointment.  The assessor shall appoint the taxpayer advocate. 
2.  Duties and responsibilities.  The duties and responsibilities of the taxpayer 
advocate are to: 
A.  Assist taxpayers in resolving problems with the bureau; 
B.  Identify areas in which taxpayers have problems in dealings with the bureau; 
C.  Propose changes in the administrative practices of the bureau to mitigate 
problems identified under paragraph B; and 
D.  Identify legislative changes that may be appropriate to mitigate problems 
identified under paragraph B. 
3.  Annual report.  Beginning in 2012, the taxpayer advocate shall prepare and 
submit by August 1st an annual report of activities of the taxpayer advocate to the 
Governor, the assessor and the joint standing committee of the Legislature having 
jurisdiction over taxation matters. 
4.  Investigation.  The taxpayer advocate may investigate complaints affecting 
taxpayers generally or any particular taxpayer or group of taxpayers and, when 
appropriate, make recommendations to the assessor with respect to these complaints.  The 
assessor shall provide a formal response to all recommendations submitted to the assessor 
by the taxpayer advocate within 3 months after submission to the assessor. 
5.  Response.  The assessor shall establish procedures to provide for a formal 
response to all recommendations submitted to the assessor by the taxpayer advocate. 
Sec. 6.  36 MRSA §191, sub-§2, ¶PP, as corrected by RR 2009, c. 2, §107, is 
amended to read: 
PP.  The disclosure to the Department of Conservation of information contained on 
the commercial forestry excise tax return filed pursuant to section 2726, such as the 
landowner name, address and acreage, to facilitate the administration of chapter 367; 
and 
Sec. 7.  36 MRSA §191, sub-§2, ¶QQ, as reallocated by RR 2009, c. 2, §108, is 
amended to read: 
QQ.  The disclosure of registration, reporting and payment information to the 
Department of Agriculture, Food and Rural Resources necessary for the 
administration of Title 32, chapter 28.; 
Sec. 8.  36 MRSA §191, sub-§2, ¶RR is enacted to read: 
RR.  The production in court on behalf of the assessor or any other party to an action 
or proceeding under this Title, or the production pursuant to a discovery request 
under the Maine Rules of Civil Procedure or a request under the freedom of access 
laws, of any reconsideration decision or other document setting forth or discussing 
the assessor's practice, interpretation of law or application of the law to particular 
facts, in redacted format so as not to reveal information from which the taxpayer may 
be identified.  A person requesting the production of any such document shall pay the 
costs associated with the redacting of information from which the taxpayer or other 
interested party may be identified; and 
Sec. 9.  36 MRSA §191, sub-§2, ¶SS is enacted to read: 
SS.  The disclosure by the assessor to the taxpayer advocate under section 151-C of 
information related to a petition for reconsideration filed by a taxpayer pursuant to 
section 151.  The taxpayer advocate is prohibited from disclosing information 
obtained pursuant to this paragraph other than to the particular taxpayer to whom the 
information pertains. 
Sec. 10.  Creation of Independent Appeals Office; elimination of appellate 
division; transition provisions.  The following provisions govern the transition of the 
appellate division within the Department of Administrative and Financial Services, 
Bureau of Revenue Services to the Independent Appeals Office within the Department of 
Administrative and Financial Services, Bureau of Revenue Services. 
1.  The appellate division is eliminated and the Independent Appeals Office is created 
as of July 1, 2012. 
2.  The State Tax Assessor shall appoint the qualified appeals officers and designate 
the Chief Appeals Officer pursuant to the Maine Revised Statutes, Title 36, section 151-B 
no later than July 1, 2012.  The number of appeals officers appointed must be the same 
number as reconsideration hearing officer positions in the appellate division authorized as 
of July 1, 2011.  The appeals officers have the same rate of compensation as the former 
reconsideration hearing officers. 
3. To the extent not inconsistent with the provisions of Title 36, section 151-B, all 
existing rules, regulations and procedures in effect, in operation or adopted in or by the 
appellate division are hereby declared in effect and continue in effect until rescinded, 
revised or amended by the proper authority. 
4.  To the extent not inconsistent with the provisions of Title 36, section 151-B, all 
existing contracts, agreements and compacts currently in effect in the appellate division 
continue in effect. 
5.  All records, property and equipment previously belonging to or allocated for the 
use of the appellate division become part of the property of the Independent Appeals 
Office. 
6.  All existing forms, licenses, letterheads and similar items bearing the name of or 
referring to "the appellate division" may be used by the Independent Appeals Office until 
existing supplies of those items are exhausted. 
7.  Any funds appropriated for use by the appellate division must be transferred for 
use by the Independent Appeals Office. 
Sec. 11.  Creation of taxpayer advocate; elimination of taxpayer advocate 
in Bureau of Revenue Services; transition provisions.  The following provisions 
govern the creation of the position of the taxpayer advocate and the elimination of the 
taxpayer advocate position within the Department of Administrative and Financial 
Services, Bureau of Revenue Services. 
1.  The assessor shall appoint the taxpayer advocate pursuant to the Maine Revised 
Statutes, Title 36, section 151-C no later than July 1, 2012.  The level of compensation 
for the taxpayer advocate must be the same as for the former taxpayer advocate in the 
bureau. 
2.  To the extent not inconsistent with the provisions of Title 36, section 151-C, all 
existing rules, regulations and procedures in effect, in operation or adopted in or by the 
taxpayer advocate in the bureau are hereby declared in effect and continue in effect until 
rescinded, revised or amended by the proper authority. 
3.  To the extent not inconsistent with the provisions of Title 36, section 151-C, all 
existing contracts, agreements and compacts currently in effect for the taxpayer advocate 
in the bureau continue in effect. 
4.  All records, property and equipment previously belonging to or allocated for the 
use of the taxpayer advocate in the bureau become part of the property of the independent 
taxpayer advocate. 
5.  Any funds appropriated for use by the taxpayer advocate in the bureau must be 
transferred for use by the independent taxpayer advocate. 
Sec. 12.  Review and revision of cross-references.  The Department of 
Administrative and Financial Services, Bureau of Revenue Services shall review the 
provisions of the Maine Revised Statutes that permit a taxpayer to appeal an assessment 
made by or decision of the State Tax Assessor.  The bureau shall submit emergency 
legislation by January 15, 2012 to the Joint Standing Committee on Taxation to ensure 
that those provisions comply with the petition for reconsideration and appeals process as 
amended in this legislation and to provide procedures to transition cases pending in the 
appellate division to the Independent Appeals Office as established in the Maine Revised 
Statutes, Title 36, section 151-B.  The committee shall submit legislation to the Second 
Regular Session of the 125th Legislature related to the recommendations of the bureau. 
Sec. 13.  Effective date.  Except for that section that requires the Department of 
Administrative and Financial Services, Bureau of Revenue Services to submit legislation 
correcting cross-references, this Act takes effect July 1, 2012, except that the assessor is 
authorized to appoint the qualified appeals officers and designate the Chief Appeals 
Officer pursuant to the Maine Revised Statutes, Title 36, section 151-B and the taxpayer 
advocate pursuant to Title 36, section 151-C prior to July 1, 2012 as long as those 
appointments do not take effect until July 1, 2012. 
SUMMARY 
This bill eliminates the current appellate division within the Department of 
Administrative and Financial Services, Bureau of Revenue Services and replaces it with 
the Independent Appeals Office.  The bill changes provisions relating to the position of 
taxpayer advocate in the bureau.  The funds used to support existing positions that are 
eliminated are transferred to support the newly created positions. 
The bill amends the procedure for administrative appeals resulting from assessments 
and other determinations of the State Tax Assessor by: 
1.  Providing a 90-day period within which the division that issued the determination 
and the taxpayer may attempt to settle disputed issues before a reconsideration conference 
is scheduled.  Currently, after receipt of an assessment, the taxpayer has 30 days in which 
to seek reconsideration, after which the taxpayer may have little or no opportunity to 
discuss the issue with the auditors for purposes of settling issues.  This 90-day period is 
intended to allow the taxpayer and auditors to obtain a better understanding of their 
respective positions and to informally share information for purposes of attempting to 
settle issues before incurring substantial costs of developing a case for administrative or 
judicial review; and 
2.  Establishing a process for the Independent Appeals Office to hear and decide 
reconsideration requests, which are currently decided by the appellate division of the 
Bureau of Revenue Services but are subject to review and input by the State Tax 
Assessor, and by other members of the Bureau of Revenue Services, including the 
division of the Bureau of Revenue Services that issued the assessment.  Pursuant to this 
bill, appeals officers are not permitted ex parte communications with other employees of 
the Bureau of Revenue Services or the petitioner.  Any additional costs of the 
Independent Appeals Office may be funded by the $100 fee paid by the petitioner for 
appeals conferences. 
The taxpayer advocate established in the bill is modeled after the Taxpayer Advocate 
Service offered by the Federal Government to assist taxpayers in relation to the federal 
Internal Revenue Service.  The taxpayer advocate assists taxpayers in relation to the 
Bureau of Revenue Services, identifies issues and suggests solutions to the Bureau of 
Revenue Services and reports on the taxpayer advocate's activities to the joint standing 
committee of the Legislature having jurisdiction over taxation matters in order to provide 
information to assist the Legislature in determining whether additional legislation is 
needed to improve the operations of the Bureau of Revenue Services. 
The bill also provides that when the State Tax Assessor has failed to comply with the 
taxpayer's requests that a representative with a valid power of attorney authorized to 
receive communications addressed to the taxpayer be notified of a determination, then the 
taxpayer is considered to have not received notice of a determination until such time as 
the representative receives notice. 
The bill also preserves the confidentiality of taxpayer information by allowing 
taxpayers and others, upon specific request, to obtain copies of reconsideration decisions 
with identifying information eliminated.  The costs of eliminating identifying information 
must be paid by the person making the request.  The State Tax Assessor is also permitted 
to provide the Taxpayer Advocate access to information necessary to assist taxpayers. 
The bill provides transition provisions and an effective date of July 1, 2012.