77-27,119 Income tax; Tax Commissioner; administer and enforce sections; prescribe forms; content; examination of return or report; uniform school district numbering system; audit by Auditor of Public - Nebraska Statutes

77-27,119. Income tax;Tax Commissioner; administer and enforce sections; prescribe forms; content;examination of return or report; uniform school district numbering system;audit by Auditor of Public Accounts or Legislative Auditor; wrongful disclosure;exception; penalty.(1) The Tax Commissioner shalladminister and enforce the income tax imposed by sections 77-2714 to 77-27,135,and he or she is authorized to conduct hearings, to adopt and promulgate suchrules and regulations, and to require such facts and information to be reportedas he or she may deem necessary to enforce the income tax provisions of suchsections, except that such rules, regulations, and reports shall not be inconsistentwith the laws of this state or the laws of the United States. The Tax Commissionermay for enforcement and administrative purposes divide the state into a reasonablenumber of districts in which branch offices may be maintained.(2)(a) The Tax Commissioner may prescribe the form and contentsof any return or other document required to be filed under the income taxprovisions. Such return or other document shall be compatible as to form andcontent with the return or document required by the laws of the United States.The form shall have a place where the taxpayer shall designate the high schooldistrict in which he or she lives and the county in which the high schooldistrict is headquartered. The Tax Commissioner shall adopt and promulgatesuch rules and regulations as may be necessary to insure compliance with thisrequirement.(b) The State Department of Education, with the assistanceand cooperation of the Department of Revenue, shall develop a uniform systemfor numbering all school districts in the state. Such system shall be consistentwith the data processing needs of the Department of Revenue and shall be usedfor the school district identification required by subdivision (a) of thissubsection.(c) The proper filing of an income tax return shall consistof the submission of such form as prescribed by the Tax Commissioner or anexact facsimile thereof with sufficient information provided by the taxpayeron the face of the form from which to compute the actual tax liability. Eachtaxpayer shall include such taxpayer's correct social security number or stateidentification number and the school district identification number of theschool district in which the taxpayer resides on the face of the form. A filingis deemed to occur when the required information is provided.(3) The Tax Commissioner, for the purpose of ascertainingthe correctness of any return or other document required to be filed underthe income tax provisions, for the purpose of determining corporate income,individual income, and withholding tax due, or for the purpose of making anestimate of taxable income of any person, shall have the power to examineor to cause to have examined, by any agent or representative designated byhim or her for that purpose, any books, papers, records, or memoranda bearingupon such matters and may by summons require the attendance of the personresponsible for rendering such return or other document or remitting any tax,or any officer or employee of such person, or the attendance of any otherperson having knowledge in the premises, and may take testimony and requireproof material for his or her information, with power to administer oathsor affirmations to such person or persons.(4) The time and place of examination pursuant to this sectionshall be such time and place as may be fixed by the Tax Commissioner and asare reasonable under the circumstances. In the case of a summons, the datefixed for appearance before the Tax Commissioner shall not be less than twentydays from the time of service of the summons.(5) No taxpayer shall be subjected to unreasonable or unnecessaryexaminations or investigations.(6) Except in accordance with proper judicial order or asotherwise provided by law, it shall be unlawful for the Tax Commissioner,any officer or employee of the Tax Commissioner, any person engaged or retainedby the Tax Commissioner on an independent contract basis, any person who pursuantto this section is permitted to inspect any report or return or to whom acopy, an abstract, or a portion of any report or return is furnished, anyemployee of the State Treasurer or the Department of Administrative Services,or any other person to divulge, make known, or use in any manner the amountof income or any particulars set forth or disclosed in any report or returnrequired except for the purpose of enforcing sections 77-2714 to 77-27,135.The officers charged with the custody of such reports and returns shall notbe required to produce any of them or evidence of anything contained in themin any action or proceeding in any court, except on behalf of the Tax Commissionerin an action or proceeding under the provisions of the tax law to which heor she is a party or on behalf of any party to any action or proceeding undersuch sections when the reports or facts shown thereby are directly involvedin such action or proceeding, in either of which events the court may requirethe production of, and may admit in evidence, so much of such reports or ofthe facts shown thereby as are pertinent to the action or proceeding and nomore. Nothing in this section shall be construed (a) to prohibit the deliveryto a taxpayer, his or her duly authorized representative, or his or her successors,receivers, trustees, personal representatives, administrators, assignees,or guarantors, if directly interested, of a certified copy of any return orreport in connection with his or her tax, (b) to prohibit the publicationof statistics so classified as to prevent the identification of particularreports or returns and the items thereof, (c) to prohibit the inspection bythe Attorney General, other legal representatives of the state, or a countyattorney of the report or return of any taxpayer who brings an action to reviewthe tax based thereon, against whom an action or proceeding for collectionof tax has been instituted, or against whom an action, proceeding, or prosecutionfor failure to comply with the Nebraska Revenue Act of 1967 is being consideredor has been commenced, (d) to prohibit furnishing to the Nebraska Workers'Compensation Court the names, addresses, and identification numbers of employers,and such information shall be furnished on request of the court, (e) to prohibitthe disclosure of information and records to a collection agency contractingwith the Tax Commissioner pursuant to sections 77-377.01 to 77-377.04, (f)to prohibit the disclosure of information pursuant to section 77-27,195, 77-4110,or 77-5731, (g) to prohibit the disclosure to the Public Employees RetirementBoard of the addresses of individuals who are members of the retirement systemsadministered by the board, and such information shall be furnished to theboard solely for purposes of its administration of the retirement systemsupon written request, which request shall include the name and social securitynumber of each individual for whom an address is requested, (h) toprohibit the disclosure of information to the Department of Labor necessaryfor the administration of the Employment Security Law, the Contractor RegistrationAct, or the Employee Classification Act, (i) to prohibit the disclosureto the Department of Motor Vehicles of tax return information pertaining toindividuals, corporations, and businesses determined by the Department ofMotor Vehicles to be delinquent in the payment of amounts due under agreementspursuant to the International Fuel Tax Agreement Act, and such disclosureshall be strictly limited to information necessary for the administrationof the act, or (j) to prohibit the disclosure under section 42-358.08, 43-512.06,or 43-3327 to any court-appointed individuals, the county attorney, any authorizedattorney, or the Department of Health and Human Services of an absent parent'saddress, social security number, amount of income, health insurance information,and employer's name and address for the exclusive purpose of establishingand collecting child, spousal, or medical support. Information so obtainedshall be used for no other purpose. Any person who violates this subsectionshall be guilty of a felony and shall upon conviction thereof be fined notless than one hundred dollars nor more than five hundred dollars, or be imprisonednot more than five years, or be both so fined and imprisoned, in the discretionof the court and shall be assessed the costs of prosecution. If the offenderis an officer or employee of the state, he or she shall be dismissed fromoffice and be ineligible to hold any public office in this state for a periodof two years thereafter.(7) Reports and returns required to be filed under incometax provisions of sections 77-2714 to 77-27,135 shall be preserved until theTax Commissioner orders them to be destroyed.(8) Notwithstanding the provisions of subsection (6) of thissection, the Tax Commissioner may permit the Secretary of the Treasury ofthe United States or his or her delegates or the proper officer of any stateimposing an income tax, or the authorized representative of either such officer,to inspect the income tax returns of any taxpayer or may furnish to such officeror his or her authorized representative an abstract of the return of incomeof any taxpayer or supply him or her with information concerning an item ofincome contained in any return or disclosed by the report of any investigationof the income or return of income of any taxpayer, but such permission shallbe granted only if the statutes of the United States or of such other state,as the case may be, grant substantially similar privileges to the Tax Commissionerof this state as the officer charged with the administration of the incometax imposed by sections 77-2714 to 77-27,135.(9) Notwithstanding the provisions of subsection (6) of thissection, the Tax Commissioner may permit the Postal Inspector of the UnitedStates Postal Service or his or her delegates to inspect the reports or returnsof any person filed pursuant to the Nebraska Revenue Act of 1967 when informationon the reports or returns is relevant to any action or proceeding institutedor being considered by the United States Postal Service against such personfor the fraudulent use of the mails to carry and deliver false and fraudulenttax returns to the Tax Commissioner with the intent to defraud the State ofNebraska or to evade the payment of Nebraska state taxes.(10)(a) Notwithstanding the provisions of subsection (6)of this section, the Tax Commissioner shall, upon written request by the Auditorof Public Accounts or the Legislative Performance Audit Committee, make taxreturns and tax return information open to inspection by or disclosure toofficers and employees of the Auditor of Public Accounts or Legislative PerformanceAudit Section employees for the purpose of and to the extent necessary inmaking an audit of the Department of Revenue pursuant to section 50-1205 or 84-304. The Auditor of Public Accounts or Legislative Performance Audit Sectionshall statistically and randomly select the tax returns and tax return informationto be audited based upon a computer tape provided by the Department of Revenuewhich contains only total population documents without specific identificationof taxpayers. The Tax Commissioner shall have the authority to approve thestatistical sampling method used by the Auditor of Public Accounts or LegislativePerformance Audit Section. Confidential tax returns and tax return informationshall be audited only upon the premises of the Department of Revenue. Allaudit workpapers pertaining to the audit of the Department of Revenue shallbe stored in a secure place in the Department of Revenue.(b) No officer or employee of the Auditor of Public Accountsor Legislative Performance Audit Section employee shall disclose to any person,other than another officer or employee of the Auditor of Public Accounts orLegislative Performance Audit Section employee whose official duties requiresuch disclosure or as provided in subsections (2) and (3) of section 50-1213,any return or return information described in the Nebraska Revenue Act of1967 in a form which can be associated with or otherwise identify, directlyor indirectly, a particular taxpayer.(c) Any person who violates the provisions of this subsectionshall be guilty of a Class IV felony and, in the discretion of the court,may be assessed the costs of prosecution. The guilty officer or employee shallbe dismissed from employment and be ineligible to hold any position of employmentwith the State of Nebraska for a period of two years thereafter. For purposesof this subsection, officer or employee shall include a former officer oremployee of the Auditor of Public Accounts or former Legislative PerformanceAudit Section employee.(11) For purposes of subsections (10) through (13) of thissection:(a) Tax returns shall mean any tax or information returnor claim for refund required by, provided for, or permitted under sections 77-2714 to 77-27,135 which is filed with the Tax Commissioner by, on behalfof, or with respect to any person and any amendment or supplement thereto,including supporting schedules, attachments, or lists which are supplementalto or part of the filed return;(b) Return information shall mean:(i) A taxpayer's identification number and (A) the nature,source, or amount of his or her income, payments, receipts, deductions, exemptions,credits, assets, liabilities, net worth, tax liability, tax withheld, deficiencies,overassessments, or tax payments, whether the taxpayer's return was, is being,or will be examined or subject to other investigation or processing or (B)any other data received by, recorded by, prepared by, furnished to, or collectedby the Tax Commissioner with respect to a return or the determination of theexistence or possible existence of liability or the amount of liability ofany person for any tax, penalty, interest, fine, forfeiture, or other impositionor offense; and(ii) Any part of any written determination or any backgroundfile document relating to such written determination; and(c) Disclosures shall mean the making known to any personin any manner a return or return information.(12) The Auditor of Public Accounts or the Legislative Auditorof the Legislative Performance Audit Section shall (a) notify the Tax Commissionerin writing thirty days prior to the beginning of an audit of his or her intentto conduct an audit, (b) provide an audit plan, and (c) provide a list ofthe tax returns and tax return information identified for inspection duringthe audit.(13) The Auditor of Public Accounts or the Legislative PerformanceAudit Section shall, as a condition for receiving tax returns and tax returninformation: (a) Subject employees involved in the audit to the same confidentialinformation safeguards and disclosure procedures as required of Departmentof Revenue employees; (b) establish and maintain a permanent system of standardizedrecords with respect to any request for tax returns or tax return information,the reason for such request, and the date of such request and any disclosureof the tax return or tax return information; (c) establish and maintain asecure area or place in the Department of Revenue in which the tax returns,tax return information, or audit workpapers shall be stored; (d) restrictaccess to the tax returns or tax return information only to persons whoseduties or responsibilities require access; (e) provide such other safeguardsas the Tax Commissioner determines to be necessary or appropriate to protectthe confidentiality of the tax returns or tax return information; (f) providea report to the Tax Commissioner which describes the procedures establishedand utilized by the Auditor of Public Accounts or Legislative PerformanceAudit Section for insuring the confidentiality of tax returns, tax returninformation, and audit workpapers; and (g) upon completion of use of suchreturns or tax return information, return to the Tax Commissioner such returnsor tax return information, along with any copies.(14) The Tax Commissioner may permit other tax officialsof this state to inspect the tax returns and reports filed under sections 77-2714 to 77-27,135, but such inspection shall be permitted only for purposesof enforcing a tax law and only to the extent and under the conditions prescribedby the rules and regulations of the Tax Commissioner.(15) The Tax Commissioner shall compile the school districtinformation required by subsection (2) of this section. Insofar as it is possible,such compilation shall include, but not be limited to, the total adjustedgross income of each school district in the state. The Tax Commissioner shalladopt and promulgate such rules and regulations as may be necessary to insurethat such compilation does not violate the confidentiality of any individualincome tax return nor conflict with any other provisions of state or federallaw. SourceLaws 1967, c. 487, § 119, p. 1628; Laws 1969, c. 694, § 1, p. 2689; Laws 1971, LB 527, § 1; Laws 1971, LB 571, § 1; Laws 1973, LB 526, § 6; Laws 1979, LB 302, § 1; Laws 1981, LB 170, § 7; Laws 1984, LB 962, § 32; Laws 1985, LB 273, § 68; Laws 1985, LB 344, § 8; Laws 1985, LB 345, § 1; Laws 1989, LB 611, § 3; Laws 1990, LB 431, § 1; Laws 1991, LB 549, § 22; Laws 1993, LB 46, § 17; Laws 1993, LB 345, § 72; Laws 1997, LB 129, § 2; Laws 1997, LB 720, § 23; Laws 1997, LB 806, § 3; Laws 2002, LB 989, § 19; Laws 2005, LB 216, § 18; Laws 2005, LB 312, § 15; Laws 2006, LB 588, § 9; Laws 2006, LB 956, § 11; Laws 2008, LB915, § 6; Laws 2010, LB563, § 15; Laws 2010, LB879, § 17.Note: The Revisor of Statutes has pursuant to section 49-769 correlated LB563, section 15, with LB879, section 17, to reflect all amendments.Note: Changes made by LB563 became effective July 15, 2010. Changes made by LB879 became operative July 15, 2010. Cross ReferencesContractor Registration Act, see section 48-2101.Employee Classification Act, see section 48-2901.Employment Security Law, see section 48-601.International Fuel Tax Agreement Act, see section 66-1401. AnnotationsNebraska Revenue Act of 1967 was not an unlawful delegation of legislative power to the United States. Anderson v. Tiemann, 182 Neb. 393, 155 N.W.2d 322 (1967).