AN
ACT Relating to sharing confidential tax information with the United States
department of agriculture for the limited purpose of investigating food stamp
fraud by retailers; and amending RCW 82.32.330.
BE IT
ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
Sec.
1. RCW
82.32.330 and 1996 c 184 s 5 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;
(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 other
person may disclose any return or tax information.
(3)
The foregoing, however, shall not prohibit the department of revenue 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 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 a peace officer as defined in
RCW 9A.04.110 or county prosecuting attorney, for official purposes. The
disclosure may be made only in response to a search warrant, subpoena, or other
court order, unless the disclosure is for the purpose of criminal tax
enforcement. A peace officer or county prosecuting attorney who receives the
return or tax information may disclose that return or tax information only for
use in the investigation and a related court proceeding, or in the court
proceeding for which the return or tax information originally was sought;
(i)
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;
(j)
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;
(k)
Publishing or otherwise disclosing the text of a written determination
designated by the director as a precedent pursuant to RCW 82.32.410;
(l)
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))
(m)
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; or
(n)
Disclosing such return or tax information to the United States department of
agriculture for the limited purpose of investigating food stamp fraud by
retailers.
(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), (i), ((or)) (j), or (n) 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, is guilty of a misdemeanor. 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.
