LRB-3526/6
JK:cmh&jlg:jf
1999 - 2000 LEGISLATURE
March 16, 2000 - Introduced by Senators Clausing, Burke, Risser, Breske, Wirch,
Shibilski
and Robson, cosponsored by Representatives Plouff and Wood.
Referred to Committee on Economic Development, Housing and Government
Operations.
SB480,1,7 1An Act to amend 71.10 (6) (a), 71.10 (6) (b), 71.10 (6m) (a), 71.74 (2) (c), 71.92
2(3) and 73.01 (4) (a); and to create 73.03 (56), 73.13, 73.14 and 73.15 of the
3statutes; relating to: creating a taxpayer bill of rights, filing tax returns and
4paying taxes electronically, paying taxes in instalments, reducing
5nondelinquent taxes, tape-recording in-person interviews with the
6department of revenue, the liability of married persons filing a joint income tax
7return, tax audits and making appropriations.
Analysis by the Legislative Reference Bureau
This bill creates a number of duties for the department of revenue (DOR) with
regard to taxpayers. For example, the bill requires DOR to ensure that its employes
treat members of the public courteously, to ensure that during tax audits its
employes provide a clear and concise statement of an assessment of additional taxes
and to ensure that refunds are issued promptly.
Under the bill, DOR may allow a person who is required to file a return with
DOR or to pay an amount to DOR to file the return electronically or to pay the amount
electronically. Under the bill, if DOR interviews a person regarding a tax matter, the
person may tape-record the interview.
Under current law, any taxpayer may petition DOR to compromise delinquent
income or franchise taxes, including any applicable costs, penalties and interest. The

petition must contain a sworn statement of the taxpayer, and DOR may examine the
taxpayer under oath regarding the matter. If DOR determines that the taxpayer is
unable to pay in full the amount due, based on an examination of the taxpayer's
financial statements and any other information required by DOR, DOR is required
to determine the amount that the taxpayer is able to pay. DOR is then required to
enter an order reducing the taxes, costs, penalties and interest due in accordance
with its determination. The compromise is effective only if it is paid within ten days.
If, within three years of the date of a compromise, DOR determines that the
taxpayer has an income or property sufficient to enable the taxpayer to pay the
remainder of the tax, including costs, penalties and interest, DOR must reopen the
matter and order the payment in full of such taxes, costs, penalties and interest.
Before entering the order, however, DOR must provide the taxpayer with written
notice advising the taxpayer of DOR's intention and fixing a time and place for the
taxpayer to appear if the taxpayer desires a hearing. After entering the order, DOR
is required to make a record of the principal amount of the taxes, and penalties, costs
and interest, that are ordered to be paid and such taxes are immediately due, payable
and subject to interest.
Under the bill, a compromise is effective if it is paid, in a lump sum, within ten
days of the compromise or, a compromise is effective if it is paid according to a
payment schedule agreed to by DOR. Also under the bill, DOR must reopen the
matter within three years of the date of the final payment under a payment schedule
and order full payment from the taxpayer if DOR determines that the taxpayer is
able to pay the remainder of the tax and other costs.
This bill also expands current law so that DOR is authorized to reduce any
taxes, costs, penalties and interest that are due from a taxpayer, regardless of
whether the taxes, costs, penalties and interest are delinquent.
Under current law, spouses that file a joint income tax return are both liable for
the payment of any tax related to that return. However, DOR may relieve a person
of any tax liability related to a joint return, in a manner specified by the Internal
Revenue Code and adopted by this state. Generally, DOR may relieve a person of any
tax liability related to a joint return if the person's spouse did not notify the person
of any tax liability or understatement of taxes related to the joint return. This bill
corrects an outdated reference to the sections of the Internal Revenue Code that
relate to a spouse's tax liability for a joint income tax return.
For further information see the state fiscal estimate, which will be printed as
an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
SB480, s. 1 1Section 1. 71.10 (6) (a) of the statutes is amended to read:
SB480,3,42 71.10 (6) (a) Joint returns. Persons filing a joint return are jointly and severally
3liable for the tax, interest, penalties, fees, additions to tax and additional

1assessments under this chapter applicable to the return. A person shall be relieved
2of liability in regard to a joint return in the manner specified in section 6013 (e) 6015
3(a) to (d) and (f)
of the internal revenue code Internal Revenue Code, notwithstanding
4the amount or percentage of the understatement.
SB480, s. 2 5Section 2. 71.10 (6) (b) of the statutes is amended to read:
SB480,3,166 71.10 (6) (b) Separate returns. A spouse filing a separate return may be
7relieved of liability for the tax, interest, penalties, fees, additions to tax and
8additional assessments under this chapter with regard to unreported marital
9property income
in the manner specified in section 66 (c) of the internal revenue code
10Internal Revenue Code. The department may not apply ch. 766 in assessing a
11taxpayer with respect to marital property income the taxpayer did not report if that
12taxpayer failed to notify the taxpayer's spouse about the amount and nature of the
13income before the due date, including extensions, for filing the return for the taxable
14year in which the income was derived. The department shall include all of that
15marital property income in the gross income of the taxpayer and exclude all of that
16marital property income from the gross income of the taxpayer's spouse.
SB480, s. 3 17Section 3. 71.10 (6m) (a) of the statutes is amended to read:
SB480,4,418 71.10 (6m) (a) A formerly married or remarried person filing a return for a
19period during which the person was married may be relieved of liability for the tax,
20interest, penalties, fees, additions to tax and additional assessments under this
21chapter for unreported marital property income from that period as if the person
22were a spouse under section 66 (c) of the internal revenue code Internal Revenue
23Code
. The department may not apply ch. 766 in assessing the former spouse of the
24person with respect to marital property income that the former spouse did not report
25if that former spouse failed to notify the person about the amount and nature of the

1income before the due date, including extensions, for filing the return for the taxable
2year during which the income was derived. The department shall include all of that
3marital property income in the gross income of the former spouse and exclude all of
4that marital property income from the gross income of the person.
SB480, s. 4 5Section 4. 71.74 (2) (c) of the statutes is amended to read:
SB480,4,136 71.74 (2) (c) If it appears upon such an investigation under par. (b) that a person
7has been over or under assessed, or that no assessment has been made when one
8should have been made, the department shall make a correct assessment in the
9manner provided in this chapter. If the department determines, by using an income
10reconstruction method, that a person has been under assessed or that no assessment
11has been made when one should have been made, the department shall corroborate
12the results of the income reconstruction method with at least one other income
13reconstruction method.
SB480, s. 5 14Section 5. 71.92 (3) of the statutes is amended to read:
SB480,5,2015 71.92 (3) Any taxpayer may petition the department of revenue to compromise
16his or her delinquent income or franchise taxes including the costs, penalties and
17interest. Such The petition shall set forth a sworn statement of the taxpayer and
18shall be in such a form as that the department shall prescribe prescribes and the
19department may examine the petitioner under oath concerning the matter. If the
20department finds that the taxpayer is unable to pay the taxes, costs, penalties and
21interest in full it shall determine the amount the taxpayer is able to pay and shall
22enter an order reducing such taxes, costs, penalties and interest in accordance with
23such the determination. Such The order shall provide that such the compromise
24shall be, if paid in a lump sum, is effective only if paid within 10 days, or the order
25shall provide that the compromise is effective if paid according to a payment schedule

1agreed to by the department
. The department or its collection agents upon receipt
2of such the order shall accept payment in accordance with the order. Upon payment
3of the total amount due under the order, the department shall credit the unpaid
4portion of the principal amount of such taxes and make appropriate record of the
5unpaid amount of penalties, costs, and interest accrued to the date of such the order.
6If within 3 years of the date of such the compromise order or the date of a final
7payment under a payment schedule, whichever is later,
the department shall
8ascertains
ascertains that the taxpayer has an income or property sufficient to
9enable the taxpayer to pay the remainder of the tax including costs, penalty and
10interest the department shall reopen said the matter and order the payment in full
11of such taxes, costs, penalties and interest. Before the entry of such the order a notice
12shall be given to the taxpayer in writing advising of the intention of the department
13of revenue to reopen such the matter and fixing a time and place for the appearance
14of the taxpayer if the taxpayer desires a hearing. Upon entry of such the order the
15department of revenue shall make an appropriate record of the principal amount of
16such the taxes, penalties, costs and interest ordered to be paid and such taxes shall
17be immediately due and payable and shall thereafter be subject to the interest
18provided by s. 71.82 (2), and the department shall immediately proceed to collect the
19same together with the unpaid portion of penalty, costs, and interest accrued to the
20date of the compromise order.
SB480, s. 6 21Section 6. 73.01 (4) (a) of the statutes is amended to read:
SB480,6,1222 73.01 (4) (a) Subject to the provisions for judicial review contained in s. 73.015,
23the commission shall be the final authority for the hearing and determination of all
24questions of law and fact arising under sub. (5) and s. 72.86 (4), 1985 stats., and ss.
2570.11 (21), 70.38 (4) (a), 70.397, 70.64 and, 70.995 (8) and 73.13, s. 76.38 (12) (a), 1993

1stats., ss. 76.39 (4) (c), 76.48 (6), 76.91, 77.26 (3), 77.59 (6) (b), 78.01, 78.22, 78.40,
278.555, 139.02, 139.03, 139.06, 139.31, 139.315, 139.33, 139.76 and 139.78, subch.
3XIV of ch. 71 and subch. VII of ch. 77. Whenever with respect to a pending appeal
4there is filed with the commission a stipulation signed by the department of revenue
5and the adverse party, under s. 73.03 (25), agreeing to an affirmance, modification
6or reversal of the department's position with respect to some or all of the issues raised
7in the appeal, the commission shall enter an order affirming or modifying in whole
8or in part, or canceling the assessment appealed from, or allowing in whole or in part
9or denying the petitioner's refund claim, as the case may be, pursuant to and in
10accordance with the stipulation filed. No responsibility shall devolve upon the
11commission, respecting the signing of an order of dismissal as to any pending appeal
12settled by the department without the approval of the commission.
SB480, s. 7 13Section 7. 73.03 (56) of the statutes is created to read:
SB480,6,1514 73.03 (56) (a) To ensure that its employes treat members of the public
15courteously.
SB480,6,1616 (b) To distribute to the public information about the state's tax laws.
SB480,6,1717 (c) To provide employes to assist members of the public in filing state tax forms.
SB480,6,1918 (d) To ensure that its employes treat members of the public fairly during tax
19audits. During an audit, an employe shall do all of the following:
SB480,6,2120 1. Give the taxpayer a clear and concise explanation of an assessment of any
21additional taxes.
SB480,6,2322 2. Give the taxpayer a clear and concise explanation of a denial or reduction
23of any refund or credit that has been claimed by the taxpayer.
SB480,7,3
13. Allow the taxpayer to consult with an attorney or an accountant or to
2postpone an interview or an audit so that the taxpayer may consult an attorney or
3an accountant.
SB480,7,54 (e) To provide for reasonable tax collection arrangements for taxpayers with an
5outstanding tax liability.
SB480, s. 8 6Section 8. 73.13 of the statutes is created to read:
SB480,7,7 773.13 Reducing nondelinquent taxes. (1) In this section:
SB480,7,88 (a) "Department" means the department of revenue.
SB480,7,109 (b) "Tax" means an amount that is owed to this state under s. 66.75 (1m) (f) 3.
10or ch. 71, 72, 76, 77, 78 or 139, and that is not delinquent.
SB480,7,17 11(2) (a) A taxpayer may petition the department to reduce the taxpayer's taxes,
12including the costs, penalties and interest related to the taxpayer's taxes. The
13petition shall set forth a sworn statement of the taxpayer and shall be in a form that
14the department prescribes. The department may examine the taxpayer under oath
15about the petition and may require the taxpayer to provide the department with
16financial statements and any other information requested by the department that
17is related to the petition.
SB480,8,318 (b) If the department determines that the taxpayer is unable to pay the taxes,
19costs, penalties and interest in full, the department shall determine the amount that
20the taxpayer is able to pay and shall enter an order reducing the taxes in accordance
21with the department's determination. The order shall provide that the order is
22effective only if the reduced taxes are paid either within 10 days from the date on
23which the order is issued or according to a payment schedule agreed to by the
24department. The department or its collection agents, upon receipt of the order, shall
25accept payment in accordance with the order. Upon payment of the reduced taxes,

1the department shall credit the unpaid portion of the principal amount of the taxes
2and record the unpaid amount of costs, penalties, and interest accrued to the date
3of the order.
SB480,8,224 (c) If within 3 years of the date of the order under par. (b) the department
5ascertains that the taxpayer has an income or owns property sufficient to enable the
6taxpayer to pay the unpaid portion of the principal amount of the taxes due,
7including the costs, penalties and interest recorded under par. (b), the department
8shall reopen the order under par. (b) and order the taxpayer to pay in full the unpaid
9portion of the principal amount of the taxes due, including the costs, penalties and
10interest recorded under par. (b). Before the entry of the order for payment, the
11department shall send a written notice to the taxpayer, by certified mail, advising
12the taxpayer of the department's intention to reopen the order under par. (b) and
13fixing a time and place for the appearance of the taxpayer, if the taxpayer desires a
14hearing. If the department determines that the taxpayer is able to pay the unpaid
15portion of the principal amount of the taxes due, including the costs, penalties and
16interest recorded under par. (b), the department shall enter the order for payment
17in full. The unpaid portion of the principal amount of the taxes due, including the
18costs, penalties and interest recorded under par. (b), shall be due and payable
19immediately upon entry of the order for payment in full and shall thereafter be
20subject to the interest under s. 71.82 (2), as that subsection applies to delinquent
21income and franchise taxes under s. 71.82, and to the delinquent account fee under
22s. 73.03 (33m).
SB480,8,2423 (d) A taxpayer may appeal a decision under this subsection to the tax appeals
24commission under s. 73.01.
SB480, s. 9 25Section 9. 73.14 of the statutes is created to read:
SB480,9,6
173.14 Electronic filing. The department of revenue may allow a person who
2is required to file a return or a report with the department or to pay an amount to
3the department to file the return or the report electronically or to pay the amount
4electronically. If the department allows a person to remit taxes electronically that
5are due monthly, the person shall submit the returns related to the taxes on or before
6the last day of the month after the month in which the taxes are due.
SB480, s. 10 7Section 10. 73.15 of the statutes is created to read:
SB480,9,11 873.15 Tape recording. A taxpayer may tape-record any in-person interview
9of the taxpayer that is conducted by an employe of the department of revenue about
10the assessment or collection of taxes, if the taxpayer informs the employe, before the
11interview, that the taxpayer is tape-recording the interview.
SB480,9,1212 (End)
Loading...
Loading...