131.081 Rules applicable to the administration of all taxes under jurisdiction of Department of Revenue. - Kentucky Statutes

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131.081 Rules applicable to the administration of all taxes under jurisdiction of Department of Revenue. The following rules, principles, or requirements shall apply in the administration of all
taxes subject to the jurisdiction of the Department of Revenue.
(1) The department shall develop and implement a Kentucky tax education and information program directed at new taxpayers, taxpayer and industry groups, and
department employees to enhance the understanding of and compliance with
Kentucky tax laws, including the application of new tax legislation to taxpayer
activities and areas of recurrent taxpayer noncompliance or inconsistency of
administration. (2) The department shall publish brief statements in simple and nontechnical language which explain procedures, remedies, and the rights and obligations of taxpayers and
the department. These statements shall be provided to taxpayers with the initial
notice of audit; each original notice of tax due; each denial or reduction of a refund
or credit claimed by a taxpayer; each denial, cancellation, or revocation of any
license, permit, or other required authorization applied for or held by a taxpayer;
and, if practical and appropriate, in informational publications by the department
distributed to the public. (3) Taxpayers shall have the right to be assisted or represented by an attorney, accountant, or other person in any conference, hearing, or other matter before the
department. The taxpayer shall be informed of this right prior to conduct of any
conference or hearing. (4) The department shall perform audits and conduct conferences and hearings only at reasonable times and places. (5) Taxpayers shall have the right to make audio recordings of any conference with or hearing by the department. The department may make similar audio recordings if
prior written notice is given to the taxpayer or if the taxpayer records the conference
or hearing. The taxpayer shall be entitled to a copy of this department recording or a
transcript as provided in KRS 61.874. (6) If any taxpayer's failure to submit a timely return or payment to the department is due to the taxpayer's reasonable reliance on written advice from the department, the
taxpayer shall be relieved of any penalty or interest with respect thereto, provided
the taxpayer requested the advice in writing from the department and the specific
facts and circumstances of the activity or transaction were fully described in the
taxpayer's request, the department did not subsequently rescind or modify the advice
in writing, and there were no subsequent changes in applicable laws or regulations
or a final decision of a court which rendered the department's earlier written advice
no longer valid. (7) Taxpayers shall have the right to receive a copy of any audit of the department by the Auditor of Public Accounts relating to the department's compliance with the
provisions of KRS 131.041 to 131.081. (8) The department shall include with each notice of tax due a clear and concise description of the basis and amount of any tax, penalty, and interest assessed against the taxpayer, and copies of the agent's audit workpapers and the agent's written
narrative setting forth the grounds upon which the assessment is made. Taxpayers
shall be similarly notified regarding the denial or reduction of any refund or credit
claim filed by a taxpayer. (9) Taxpayers shall have the right to an installment payment agreement for the payment of delinquent taxes, penalties, and interest owed, provided the taxpayer requests the
agreement in writing clearly demonstrating his inability to pay in full and that the
agreement will facilitate collection by the department of the amounts owed. The
department may modify or terminate an installment payment agreement if it
determines the taxpayer has not complied with the terms of the agreement; the
taxpayers' financial condition has sufficiently changed; the taxpayer fails to provide
any requested financial condition update information; the taxpayer gave false or
misleading information in securing the agreement; or the taxpayer fails to timely
report and pay any other tax due the Commonwealth. The department shall give
written notice to the taxpayer at least thirty (30) days prior to modifying or
terminating an installment payment agreement unless the department has reason to
believe that collection of the amounts owed will be jeopardized in whole or in part
by delay. (10) The department shall not knowingly authorize, require, or conduct any investigation or surveillance of any person for nontax administration related purposes, except
internal security related investigations involving Department of Revenue personnel. (11) In addition to the circumstances under which an extension of time for filing reports or returns may be granted pursuant to KRS 131.170, taxpayers shall be entitled to
the same extension of the due date of any comparable Kentucky tax report or return
for which the taxpayer has secured a written extension from the Internal Revenue
Service provided the taxpayer notifies the department in writing and provides a
copy of the extension at the time and in the manner which the department may
require. (12) The department shall bear the cost or, if paid by the taxpayer, reimburse the taxpayer for recording or bank charges as the direct result of any erroneous lien or
levy by the department, provided the erroneous lien or levy was caused by
department error and, prior to issuance of the erroneous lien or levy, the taxpayer
timely responded to all contacts by the department and provided information or
documentation sufficient to establish his or her position. When the department
releases any erroneous lien or levy, notice of the fact shall be mailed to the taxpayer
and, if requested by the taxpayer, a copy of the release, together with an
explanation, shall be mailed to the major credit reporting companies located in the
county where it was filed. (13) The department shall not evaluate individual officers or employees on the basis of taxes assessed or collected or impose or suggest tax assessment or collection quotas
or goals. (14) Taxpayers shall have the right to bring an action for damages against the Commonwealth to the Board of Claims for actual and direct monetary damages
sustained by the taxpayer as a result of willful, reckless, and intentional disregard by department employees of the rights of taxpayers as set out in KRS 131.041 to
131.081 or in the tax laws administered by the department. In the awarding of
damages pursuant to this subsection, the board shall take into consideration the
negligence or omissions, if any, on the part of the taxpayer which contributed to the
damages. If any proceeding brought by a taxpayer is ruled frivolous by the board,
the department shall be reimbursed by the taxpayer for its costs in defending the
action. (15) Taxpayers shall have the right to privacy with regard to the information provided on their Kentucky tax returns and reports, including any attached information or
documents. Except as provided in KRS 131.190, no information pertaining to the
returns, reports, or the affairs of a person's business shall be divulged by the
department to any person or be intentionally and without authorization inspected by
any present or former commissioner or employee of the Department of Revenue,
member of a county board of assessment appeals, property valuation administrator
or employee, or any other person. Effective: July 12, 2006
History: Amended 2006 Ky. Acts ch. 251, sec. 2, effective July 12, 2006. -- Amended 2005 Ky. Acts ch. 85, sec. 111, effective June 20, 2005. -- Amended 2000 Ky. Acts
ch. 503, sec. 1, effective July 14, 2000. -- Amended 1998 Ky. Acts ch. 134, sec. 2,
effective July 15, 1998. -- Amended 1994 Ky. Acts ch. 508, sec. 43, effective July
15, 1994.