AN ACT Relating to
confidentiality of certain information of the department of revenue; amending
RCW 82.32.330; providing an effective date; and declaring an emergency.
BE IT ENACTED BY THE
LEGISLATURE OF THE STATE OF WASHINGTON:
Sec. 1. RCW 82.32.330 and 1991 c
330 s 1 are each amended to read as follows:
(1) For purposes of
this section:
(a)
"Disclose" means to make known to any person in any manner whatever a
return or tax information;
(b) "Return"
means a tax or information return or claim for refund required by, or provided
for or permitted under, the laws of this state which is filed with the
department of revenue by, on behalf of, or with respect to a person, and any
amendment or supplement thereto, including supporting schedules, attachments,
or lists that are supplemental to, or part of, the return so filed;
(c) "Tax
information" means (i) a taxpayer's identity, (ii) the nature, source, or
amount of the taxpayer's income, payments, receipts, deductions, exemptions,
credits, assets, liabilities, net worth, tax liability deficiencies,
overassessments, or tax payments, whether taken from the taxpayer's books and
records or any other source, (iii) whether the taxpayer's return was, is being,
or will be examined or subject to other investigation or processing, (iv) a
part of a written determination that is not designated as a precedent and
disclosed pursuant to RCW 82.32.410, or a background file document relating to
a written determination, and (v) other data received by, recorded by, prepared
by, furnished to, or collected by the department of revenue with respect to the
determination of the existence, or possible existence, of liability, or the
amount thereof, of a person under the laws of this state for a tax, penalty,
interest, fine, forfeiture, or other imposition, or offense: PROVIDED, That
data, material, or documents that do not disclose information related to a
specific or identifiable taxpayer do not constitute tax information under this
section. Except as provided by RCW 82.32.410, nothing in this chapter shall
require any person possessing data, material, or documents made confidential
and privileged by this section to delete information from such data, material,
or documents so as to permit its disclosure;
(d) "State
agency" means every Washington state office, department, division, bureau,
board, commission, or other state agency; ((and))
(e) "Taxpayer
identity" means the taxpayer's name, address, telephone number,
registration number, or any combination thereof, or any other information
disclosing the identity of the taxpayer; and
(f)
"Department" means the department of revenue or its officer, agent,
employee, or representative.
(2) Returns and tax
information shall be confidential and privileged, and except as authorized by
this section, neither the department of revenue ((nor any officer, employee,
agent, or representative thereof)) nor any other person may disclose any
return or tax information.
(3) The foregoing,
however, shall not prohibit the department of revenue ((or an officer,
employee, agent, or representative thereof)) from:
(a) Disclosing such
return or tax information in a civil or criminal judicial proceeding or an
administrative proceeding:
(i) In respect of any
tax imposed under the laws of this state if the taxpayer or its officer or
other person liable under Title 82 RCW is a party in the proceeding; or
(ii) In which the
taxpayer about whom such return or tax information is sought and another state
agency are adverse parties in the proceeding;
(b) Disclosing, subject
to such requirements and conditions as the director shall prescribe by rules
adopted pursuant to chapter 34.05 RCW, such return or tax information regarding
a taxpayer to such taxpayer or to such person or persons as that taxpayer may
designate in a request for, or consent to, such disclosure, or to any other
person, at the taxpayer's request, to the extent necessary to comply with a
request for information or assistance made by the taxpayer to such other
person: PROVIDED, That tax information not received from the taxpayer shall
not be so disclosed if the director determines that such disclosure would
compromise any investigation or litigation by any federal, state, or local
government agency in connection with the civil or criminal liability of the
taxpayer or another person, or that such disclosure would identify a
confidential informant, or that such disclosure is contrary to any
agreement entered into by the department that provides for the reciprocal
exchange of information with other government agencies which agreement requires
confidentiality with respect to such information unless such information is
required to be disclosed to the taxpayer by the order of any court;
(c) Disclosing the name
of a taxpayer with a deficiency greater than five thousand dollars and against
whom a warrant under RCW 82.32.210 has been either issued or ((failed
[filed])) filed and remains outstanding for a period of at least ten
working days. The department shall not be required to disclose any information
under this subsection if a taxpayer: (i) Has been issued a tax assessment;
(ii) has been issued a warrant that has not been filed; and (iii) has entered a
deferred payment arrangement with the department of revenue and is making
payments upon such deficiency that will fully satisfy the indebtedness within
twelve months;
(d) Disclosing the name
of a taxpayer with a deficiency greater than five thousand dollars and against
whom a warrant under RCW 82.32.210 has been filed with a court of record and
remains outstanding;
(e) Publishing
statistics so classified as to prevent the identification of particular returns
or reports or items thereof;
(f) Disclosing such
return or tax information, for official purposes only, to the governor or
attorney general, or to any state agency, or to any committee or subcommittee
of the legislature dealing with matters of taxation, revenue, trade, commerce,
the control of industry or the professions;
(g) Permitting the
department of revenue's records to be audited and examined by the proper state
officer, his or her agents and employees;
(h) Disclosing any such
return or tax information to the proper officer of the internal revenue service
of the United States, the Canadian government or provincial governments of
Canada, or to the proper officer of the tax department of any state or city or
town or county, for official purposes, but only if the statutes of the United
States, Canada or its provincial governments, or of such other state or city or
town or county, as the case may be, grants substantially similar privileges to
the proper officers of this state; ((or))
(i) Disclosing any such
return or tax information to the Department of Justice, the Bureau of Alcohol,
Tobacco and Firearms of the Department of the Treasury, the Department of
Defense, the United States customs service, the coast guard of the United
States, and the United States department of transportation, or any authorized
representative thereof, for official purposes;
(j) Publishing or
otherwise disclosing the text of a written determination designated by the
director as a precedent pursuant to RCW 82.32.410; ((or))
(k) Disclosing, in a
manner that is not associated with other tax information, the taxpayer name, entity
type, business address, mailing address, revenue tax registration numbers,
standard industrial classification code of a taxpayer, and the dates of opening
and closing of business. This subsection shall not be construed as giving
authority to the department to give, sell, or provide access to any list of
taxpayers for any commercial purpose; or
(1) Disclosing such
return or tax information that is also maintained by another Washington state
or local governmental agency as a public record available for inspection and
copying under the provisions of chapter 42.17 RCW or is a document maintained
by a court of record not otherwise prohibited from disclosure.
(4) (a) The
department may disclose return or taxpayer information to a person under
investigation or during any court or administrative proceeding against a person
under investigation as provided in this subsection (4). The disclosure must be
in connection with the department's official duties relating to an audit,
collection activity, or a civil or criminal investigation. The disclosure may
occur only when the person under investigation and the person in possession of
data, materials, or documents are parties to the return or tax information to
be disclosed. The department may disclose return or tax information such as
invoices, contracts, bills, statements, resale or exemption certificates, or
checks. However, the department may not disclose general ledgers, sales or
cash receipt journals, check registers, accounts receivable/payable ledgers,
general journals, financial statements, expert's workpapers, income tax
returns, state tax returns, tax return workpapers, or other similar data,
materials, or documents.
(b) Before
disclosure of any tax return or tax information under this subsection (4), the
department shall, through written correspondence, inform the person in
possession of the data, materials, or documents to be disclosed. The correspondence
shall clearly identify the data, materials, or documents to be disclosed. The
department may not disclose any tax return or tax information under this
subsection (4) until the time period allowed in (c) of this subsection has
expired or until the court has ruled on any challenge brought under (c) of this
subsection.
(c) The person in
possession of the data, materials, or documents to be disclosed by the
department has twenty days from the receipt of the written request required
under (b) of this subsection to petition the superior court of the county in
which the petitioner resides for injunctive relief. The court shall limit or
deny the request of the department if the court determines that:
(i) The data,
materials, or documents sought for disclosure are cumulative or duplicative, or
are obtainable from some other source that is more convenient, less burdensome,
or less expensive;
(ii) The production
of the data, materials, or documents sought would be unduly burdensome or
expensive, taking into account the needs of the department, the amount in
controversy, limitations on the petitioner's resources, and the importance of
the issues at stake; or
(iii) The data,
materials, or documents sought for disclosure contain trade secret information
that, if disclosed, could harm the petitioner.
(d) The department
shall reimburse reasonable expenses for the production of data, materials, or
documents incurred by the person in possession of the data, materials, or
documents to be disclosed.
(e) Requesting
information under (b) of this subsection that may indicate that a taxpayer is
under investigation does not constitute a disclosure of tax return or tax
information under this section.
(5) Any person
acquiring knowledge of any return or tax information in the course of his or
her employment with the department of revenue and any person acquiring
knowledge of any return or tax information as provided under subsection (3)
(f), (g), (h), or (i) of this section, who discloses any such return or tax
information to another person not entitled to knowledge of such return or tax
information under the provisions of this section, shall upon conviction be
punished by a fine not exceeding one thousand dollars and, if the person guilty
of such violation is an officer or employee of the state, such person shall
forfeit such office or employment and shall be incapable of holding any public
office or employment in this state for a period of two years thereafter.
NEW SECTION. Sec.
2. This act is necessary for
the immediate preservation of the public peace, health, or safety, or support
of the state government and its existing public institutions, and shall take
effect July 1, 1995.
