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§ 19195-1. Hearing on Requests for Release Under Section 494.5 of the Business and Professions ...

18 CA ADC § 19195-1Barclays Official California Code of Regulations

Barclays California Code of Regulations

Title 18. Public Revenues

Division 3. Franchise Tax Board

Chapter 2.6. Administration of Franchise and Income Tax

Subchapter 4. Payments and Assessments

Article 9. Public Disclosure of Tax Delinquencies

18 CCR § 19195-1

§ 19195-1. Hearing on Requests for Release Under Section 494.5 of the Business and Professions Code.

Currentness

(a) Applicability of Regulation. This regulation applies to hearings provided by the Franchise Tax Board in connection with requests for release under section 494.5 of the Business and Professions Code.

(b) Right to Request Hearing, Notification of Right, and Limitation on Scope and Effect of Hearing.

(1) Unless the Franchise Tax Board determines to send a release to the appropriate state governmental licensing entity under section 494.5 of the Business and Professions Code without a hearing under this regulation, an applicant or licensee who receives a preliminary notice or preliminary notices under subdivision (e)(2) of section 494.5 of the Business and Professions Code and who has made a request for release to the Franchise Tax Board under section 494.5 of the Business and Professions Code shall have the right to one (1) hearing before a Franchise Tax Board hearing officer related solely to the issue of whether the Franchise Tax Board shall send a release to the appropriate state governmental licensing entity under section 494.5 of the Business and Professions Code. An applicant or licensee who has had a hearing under this regulation related to a request for release shall have the right to a hearing under this regulation related to another request for release only upon a showing of a material change of circumstances.

(2) If an applicant or licensee is entitled to a hearing under subsection (b)(1) and if the Franchise Tax Board has not done so previously, the Franchise Tax Board shall, within five (5) business days after the Franchise Tax Board receives a request for release, send written notification to the applicant or licensee requesting the release of the applicant's or licensee's right to submit a written request for a hearing in accordance with this regulation.

(3) The applicant or licensee shall not be permitted to contest the applicant's or licensee's obligation to pay the outstanding tax obligation through the procedures contained in section 494.5 of the Business and Professions Code or in this regulation.

(4) The decision of the hearing officer, the Taxpayers' Rights Advocate or the Taxpayers' Rights Advocate's designee under this regulation shall be binding on the applicant or licensee and the Franchise Tax Board only in connection with the request for release that was the subject of the hearing and not in connection with any other request for release or any other matter.

(1) Upon receipt of a written request for a hearing in accordance with this regulation, the Franchise Tax Board shall use reasonable diligence to hold a hearing in accordance with this regulation within twenty (20) business days of the Franchise Tax Board's receipt of the request for a hearing. The failure of the Franchise Tax Board to hold a hearing within twenty (20) business days shall not require the Franchise Tax Board to send a release under section 494.5 of the Business and Professions Code, except as required by subdivision (h)(2) of section 494.5 of the Business and Professions Code.

(2) The time, date and place of the hearing under this regulation shall, when possible, be determined by mutual agreement of the applicant or licensee and the Franchise Tax Board. If a mutual agreement cannot be reached as to the time, date and place of the hearing, the Franchise Tax Board shall determine the time, date and place of the hearing and send written notification to the applicant or licensee of that determination.

(3) Hearings shall be held at a Franchise Tax Board office and scheduled Monday through Friday during normal business hours for the office where the hearing is to be held (generally between 8:00 a.m. and 4:30 p.m., local time).

(4) A hearing may be conducted by telephone, videoconferencing or similar means if the applicant or licensee and the Franchise Tax Board mutually consent.

(5) The applicant or licensee may request that the hearing be rescheduled; however, the determination of whether to reschedule the hearing shall be made by the Franchise Tax Board.

(6) An applicant or licensee who does not appear at the scheduled hearing shall be deemed to have waived the right to a hearing under this regulation unless good cause, not within the applicant's or licensee's control, exists for the failure to appear. The hearing officer will determine whether good cause exists. If good cause exists, the hearing shall be rescheduled as soon as practical.

(d) Hearing.

(1) Hearing Officer and Hearing Witnesses.

(A) The Franchise Tax Board shall designate a member of its staff as the hearing officer for the hearing in connection with the request for release under section 494.5 of the Business and Professions Code. The Franchise Tax Board shall not appoint any member of its staff as the hearing officer if that staff member had any prior involvement with respect to the applicant or licensee.

(B) The hearing officer shall have the authority to conduct the hearing and make the determination as to whether the Franchise Tax Board should send a release.

(C) The Franchise Tax Board may designate one or more members of its staff as hearing witnesses for the hearing in connection with a request for release.

(2) Representative.

(A) The applicant or licensee shall have the right to have one representative at the hearing, provided such representative is designated by the applicant or licensee in a written notice signed by the applicant or licensee that is received by the Franchise Tax Board at or prior to the commencement of the hearing.

(B) The representative may be any person of the applicant's or licensee's choosing, including, but not limited to, an attorney, accountant, bookkeeper, employee, consultant or business associate.

(3) Conduct of Hearing.

(A) Purpose of Hearing. The purpose of the hearing is to allow the hearing officer and the applicant or licensee to address the relevant issues raised by the request for release and to develop the factual basis for a decision on the request for release.

(B) Reasonable Accommodations. The Franchise Tax Board shall provide reasonable accommodations to any applicant, licensee, representative or witness who has a disability and requires such accommodations to facilitate the hearing process. An applicant or licensee shall notify the Franchise Tax Board in writing of the need for reasonable accommodations at the same time that the applicant or licensee submits a written request to the Franchise Tax Board for a hearing in accordance with this regulation. Such notification shall specify the accommodations needed.

1. An applicant or licensee who cannot speak or understand English or who can do so only with difficulty shall receive language assistance at the hearing if:

a. The applicant or licensee supplies an interpreter,

b. The applicant or licensee requests in accordance with subsection (d)(3)(C)2. that the Franchise Tax Board supply an interpreter who is a member of the Franchise Tax Board's staff, other than the hearing officer, and one is available, or

c. The applicant or licensee requests in accordance with subsection (d)(3)(C)2. a certified hearing interpreter from the list of such interpreters maintained by the State Personnel Board, and one is available.

2. An applicant or licensee requesting the Franchise Tax Board to supply language assistance services under subsection (d)(3)(C)1.b. or c. shall notify the Franchise Tax Board of the request at the same time as the applicant or licensee submits a written request to the Franchise Tax Board for a hearing in accordance with this regulation. Such notification shall specify the language assistance needed.

3. If the applicant or licensee requests a certified administrative hearing interpreter pursuant to subsection (d)(3)(C)1.c. and one is supplied, the cost of supplying the interpreter shall be paid by the applicant or licensee, unless, upon request of the applicant or licensee, the hearing officer directs the Franchise Tax Board to pay such cost. The hearing officer's decision to direct the Franchise Tax Board to pay such cost shall be based upon an equitable consideration of all the circumstances of the case, such as the ability of the applicant or licensee to pay.

4. A person providing language assistance under subsection (d)(3)(C)1.a. shall not be considered a representative for purposes of subsection (d)(2), unless so designated by the applicant or licensee.

(D) Confidentiality. The hearings under this regulation are part of the administrative process of the Franchise Tax Board and are covered by the confidentiality provisions contained in Article 2 of Chapter 7 of Part 10.2 of the Revenue and Taxation Code.

(E) Attendance of Persons Other Than Applicant, Licensee, Staff of the Franchise Tax Board, Hearing Witnesses of the Franchise Tax Board, and Hearing Officer. No person other than the applicant, licensee, staff of the Franchise Tax Board, hearing witnesses of the Franchise Tax Board and the hearing officer shall be entitled to attend the hearing unless the hearing officer receives:

1. Written notice signed by the applicant or licensee authorizing such person to attend the hearing, and

2. Such person provides the hearing officer with a signed written statement that:

a. Such person shall not record the hearing by means of an audio or video recording or any other means, and

b. Such person shall follow any instructions given by the hearing officer.

(F) Recording Transcript and Records of Hearing.

1. The Franchise Tax Board is not required to record the hearing by means of an audio or video recording or any other means or to prepare a transcript of a hearing under this regulation.

2. The Franchise Tax Board is not required to maintain a record of the documents submitted or statements made during the course of a hearing after the applicant's or licensee's entitlement to a release has been decided.

3. No one other than the Franchise Tax Board shall have the right to record the hearing by means of an audio or video recording or any other means.

(G) Witnesses and Documentary Evidence. At a hearing, the applicant or licensee may present witnesses and/or offer documentary evidence in support of the applicant's or licensee's request that the Franchise Tax Board send a release under section 494.5 of the Business and Professions Code and to rebut evidence of the Franchise Tax Board.

1. Witnesses.

a. Oral testimony will be evaluated by the hearing officer in making a decision on the request for release.

b. Oral testimony will be under oath.

c. The applicant or licensee and the Franchise Tax Board shall exchange a list of the names of witnesses who will be present at the hearing so that such lists are received at least five (5) business days prior to the hearing.

d. The hearing officer may limit the testimony of witnesses if and when the hearing officer determines testimony to be repetitious, redundant, or irrelevant.

e. The Franchise Tax Board is not required to compel witnesses to appear at a hearing.

2. Documentary Evidence.

a. Documentary evidence will be evaluated by the hearing officer in making a decision on the request for release.

b. Documentary evidence will be submitted under penalty of perjury.

c. The applicant or licensee and the Franchise Tax Board shall exchange a copy of any documentary evidence to be offered in support of their positions so that such documentary evidence is received at least five (5) business days prior to the hearing.

d. The Franchise Tax Board is not required to compel production of documents at a hearing.

(H) Termination of Hearing. The hearing officer shall have the authority to terminate a hearing. Grounds for terminating a hearing include, but are not limited to:

1. The applicant or licensee or the applicant's or licensee's representative persists in making repetitious or irrelevant statements, or

2. The applicant or licensee, the applicant's or licensee's representative, or any other individual permitted to be at the hearing by the applicant or licensee behaves in a disruptive manner or does not follow the hearing officer's instructions.

(e) Decision.

(1) In reaching a decision, the hearing officer shall consider the following:

(A) Any documents or other evidence, including, but not limited to, any financial statements, submitted by or on behalf of the Franchise Tax Board in accordance with this regulation,

(B) Any documents or other evidence, including, but not limited to, any financial statements, submitted by or on behalf of the applicant or licensee in accordance with this regulation,

(C) Whether the applicant or licensee has submitted the information and documentation related to assets, income or expenses or any other information or documentation requested by the Franchise Tax Board for the purposes of making the determination of whether the applicant or licensee is unable to pay the outstanding tax obligation due to a current financial hardship under subdivision (h)(3) of section 494.5 of the Business and Professions Code in the form requested by the Franchise Tax Board and under penalty of perjury,

(D) Whether the applicant or licensee has acted with diligence in responding to notices from the applicable state governmental licensing entity and the Franchise Tax Board as required by subdivision (i) of section 494.5 of the Business and Professions Code,

(E) Any argument made by the applicant or licensee, the applicant's or licensee's representative or the Franchise Tax Board, and

(F) The hearing officer's experience, technical competence and specialized knowledge.

(2) In determining whether the applicant or licensee is entitled to a release under section 494.5 of the Business and Professions Code, the hearing officer shall apply Regulation section 19195-2.

(3) Within five (5) business days of the completion of the hearing, the hearing officer shall decide whether the applicant or licensee is entitled to a release under section 494.5 of the Business and Professions Code.

(A) If the hearing officer decides that the applicant or licensee is entitled to a release under section 494.5 of the Business and Professions Code, the Franchise Tax Board shall immediately send a release to the applicant or licensee and the applicable governmental licensing entity.

(B) If the hearing officer decides that the applicant or licensee is not entitled to a release under section 494.5 of the Business and Professions Code, the Franchise Tax Board shall, within five (5) business days of the completion of the hearing, send a written notification to the applicant or licensee that:

1. Informs the applicant or licensee that the hearing officer has decided that the applicant or licensee is not entitled to a release, and

2. Provides the applicant or licensee with the hearing officer's written decision that the applicant or licensee is not entitled to a release. The decision shall be based on the items described in subsection (e)(1) and shall include a statement of the factual and legal basis of the decision related to whether the applicant or licensee is entitled to a release under section 494.5 of the Business and Professions Code and the names of all persons in attendance at the hearing. If the decision is based substantially on the credibility of one or more witnesses, the decision shall identify any specific evidence of the observed demeanor, manner or attitude of the witnesses that supports the determination, and

3. Informs the applicant or licensee of the right to request reconsideration of the hearing officer's decision under this regulation and the procedure for requesting reconsideration, and

4. Informs the applicant or licensee of the right to request review of the hearing officer's decision by the Taxpayers' Rights Advocate or the Taxpayers' Rights Advocate's designee under this regulation and the procedure for requesting review.

(4) If a hearing is provided, the Franchise Tax Board shall be deemed to have completed its release review and to have sent notice of its findings to the applicant or licensee as required by subdivisions (h)(2) of section 494.5 of the Business and Professions Code once the Franchise Tax Board has either sent:

(A) A release to the applicant or licensee and the applicable governmental licensing entity, or

(B) The notification as required by subsection (e)(3)(B) to the applicant or licensee.

(f) Request for Reconsideration by Hearing Officer.

(1) The applicant or licensee has the right to submit one (1) written request that the hearing officer reconsider the hearing officer's decision that the applicant or licensee is not entitled to a release, provided:

(A) The applicant or licensee submits the request so that it is received by the Franchise Tax Board within ten (10) business days of the date the applicant or licensee receives the notification under subsection (e)(3)(B), and

(B) The applicant or licensee has not and does not request a review of the hearing officer's decision by the Taxpayers' Rights Advocate or the Taxpayers' Rights Advocate's designee under this regulation prior to the time the hearing officer makes a decision related to the request for reconsideration by the applicant or licensee.

(2) Within seven (7) business days of the Franchise Tax Board's receipt of the request for reconsideration, the hearing officer shall decide whether the applicant or licensee is entitled to a release based on the items described in subsection (e)(1), the information and argument included in the request for reconsideration, and any documents and information relevant to the matter that are under the control of the Franchise Tax Board.

(B) If the hearing officer decides that the applicant or licensee is not entitled to a release under section 494.5 of the Business and Professions Code, the Franchise Tax Board shall immediately send a written notification to the applicant or licensee that:

1. Notifies the applicant or licensee that the hearing officer has decided that the applicant or licensee is not entitled to a release, and

2. Notifies the applicant or licensee of the right to request review of the hearing officer's decision by the Taxpayers' Rights Advocate or the Taxpayers' Rights Advocate's designee and the procedure for requesting such review.

(3) The applicant or licensee shall not have a right to a hearing in connection with a request for reconsideration under this subsection (f).

(g) Request for Review by Taxpayers' Rights Advocate.

(1) The applicant or licensee has the right to submit one (1) written request for review of the hearing officer's decision that the applicant or licensee is not entitled to a release to the Taxpayers' Rights Advocate or the Taxpayers' Rights Advocate's designee, provided:

(A) The applicant or licensee submits the request so that it is received by the Franchise Tax Board on or before the later of:

1. Ten (10) business days after the date the applicant or licensee receives the notification under subsection (e)(3)(B), and

2. Ten (10) business days after the date the applicant or licensee receives notification from the Franchise Tax Board under subsection (f)(2)(B), if the applicant or licensee has submitted a request for reconsideration that complies with subsection (f)(1)(A) and (B), and

(B) If the applicant or licensee has submitted a request for reconsideration that complies with subsections (f)(1)(A) and (B), the applicant or licensee has received notification under subsection (f)(2)(B).

(2) If an applicant or licensee submits a request for review by the Taxpayers' Rights Advocate or the Taxpayers' Rights Advocate's designee prior to receiving notification from the Franchise Tax Board under subsection (f)(2)(B), the applicant or licensee waives the right to a decision on reconsideration by the hearing officer under subsection (f)(2).

(3) Within seven (7) business days of the Taxpayers' Rights Advocate's receipt of a request that complies with subsections (g)(1)(A) and (B), the Taxpayers' Rights Advocate or the Taxpayers' Rights Advocate's designee shall decide whether the applicant or licensee is entitled to a release based on the items described in subsection (e)(1), the decision of the hearing officer, the information and argument included in the request for review and any documents and information relevant to the matter that are under the control of the Franchise Tax Board.

(A) If the Taxpayers' Rights Advocate or the Taxpayers' Rights Advocate's designee decides that the applicant or licensee is entitled to a release under section 494.5 of the Business and Professions Code, the Franchise Tax Board shall immediately send a release to licensee or applicant and the applicable governmental licensing entity.

(B) If the Taxpayers' Rights Advocate or the Taxpayers' Rights Advocate's designee decides that the applicant or licensee is not entitled to a release under section 494.5 of the Business and Professions Code, the Taxpayers' Rights Advocate or the Taxpayers' Rights Advocate's designee shall immediately send a written notification to the applicant or licensee that the Taxpayers' Rights Advocate or the Taxpayers' Rights Advocate's designee has decided that the applicant or licensee is not entitled to a release.

(4) The applicant or licensee shall not have a right to a hearing in connection with a request for review under this subsection (g).

(h) Resolution Outside Hearing Process.

At any time, an applicant or licensee may discuss with the collector assigned to the applicant's or licensee's account the resolution of the request for release and resolve the request for release.

(i) Other Requests for Release.

Even if an applicant or licensee is not entitled to a hearing under this regulation, the Franchise Tax Board shall consider and respond to any request for release received from an applicant or licensee, provided that, in the case of multiple requests for release in connection with the same preliminary notice or preliminary notices, such request is based on a material change of circumstances.

(j) Notifications, Notices and Requests.

(1) Notifications and Notices to Applicant or Licensee. All notifications and notices to the applicant or licensee under this regulation shall be mailed by first-class mail to the address of the applicant or licensee on the request for a release or, in the absence of such address, to the last known address of the applicant or licensee pursuant to section 18416 of the Revenue and Taxation Code, unless the applicant or licensee notifies the Franchise Tax Board in a writing signed by the applicant or licensee of an alternative address. If the applicant or licensee notifies the Franchise Tax Board in a writing signed by the applicant or licensee of an alternative address, all future notices to the applicant or licensee under this regulation shall be mailed by first-class mail to that address. In addition to sending notices and notifications by first-class mail, all notifications and notices to the applicant or licensee under this regulation may be sent by facsimile or encrypted email, if the applicant or licensee requests in writing that the Franchise Tax Board send notifications and notices to the applicant or licensee by facsimile or encrypted email and provides sufficient instructions to do so.

(2) Notifications, Notices and Requests to Franchise Tax Board. All notifications, notices and requests to the Franchise Tax Board under this regulation shall be mailed by first-class mail to the address and unit that the Franchise Tax Board shall designate by FTB Notice. In addition to sending notifications, notices and requests by first-class mail, all notifications, notices and requests may also be sent by facsimile or email, if such method is described in the FTB Notice.

(k) Applicable Date of Regulation. This regulation shall apply to any request for release under section 494.5 of the Business and Professions Code received by the Franchise Tax Board on or after the effective date of this regulation.

Credits

Note: Authority cited: Section 494.5, Business and Professions Code; and Section 19503, Revenue and Taxation Code. Reference: Section 494.5, Business and Professions Code; Section 19195, Revenue and Taxation Code; and Sections 11435.20 and 11435.25, Government Code.

History

1. New article 9 (sections 19195-1 and 19195-2) and section filed 11-17-2016 as an emergency; operative 11-17-2016 (Register 2016, No. 47). A Certificate of Compliance must be transmitted to OAL by 5-16-2017 or emergency language will be repealed by operation of law on the following day.

2. Editorial correction of Note (Register 2017, No. 21).

3. Certificate of Compliance as to 11-17-2016 order, including amendment of subsections (e)(3)(B), (g)(1)(A)2. and (k), transmitted to OAL 4-20-2017 and filed 5-24-2017; amendments operative 5-24-2017 pursuant to Government Code section 11343.4(b)(3) (Register 2017, No. 21).

This database is current through 5/10/24 Register 2024, No. 19.

Cal. Admin. Code tit. 18, § 19195-1, 18 CA ADC § 19195-1

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