Exhibit [1.3] 32-1 (08/19/98)
Agreement on Coordination of Tax Administration
| SECTION 1. Introduction |
|
| 1.1 This agreement provides the basis
for
coordination of Federal and State tax administration. The parties to this
agreement will explore and adopt mutually acceptable techniques and modes
of exchange most beneficial to improved tax administration with the least
possible interruption of their respective operating routines and with strict
adherence to laws, regulations, and rules for protecting the confidentiality
of exchanged information. |
|
| 1.2 This agreement may be supplemented
by
an implementing agreement, prescribing the nature, quantity and mechanics
for the continuous exchange of tax information, including criteria and
tolerance
for selection of tax returns and return information as well as
other cooperative
activities. If an implementing agreement has been approved,
subsections preceded
by asterisks(*) will have corresponding provisions
in the implementing agreement
which should be consulted for more detailed
information about specific working
arrangements and operational procedures
for the exchange of tax information
authorized by this agreement. All provisions
contained in implementing agreements
must be consistent with the terms
and conditions in this agreement. In any
situation where a conflict arises
between the provisions of this agreement
and the implementing agreement,
the terms of this agreement will govern. |
|
| SECTION 2. Definitions |
|
| For purposes of this agreement, the following
definitions apply: |
|
| 2.1 Agency. The term "Agency"
means (Name of State agency,
body or commission) |
|
| 2.2 IRS. The term "IRS"
means the Internal Revenue Service, U.S. Department of Treasury. |
|
| 2.3 State Audit Agency. The term "State Audit Agency"
is defined in the same manner as provided
in section 6103(d)(2)(B) of
the Code. State Audit Agency means (Name of State agency, body or commission) |
|
| 2.4 State. The term "State"
means the (Name of State, Commonwealth,
etc.) |
|
*2.5 Agency Representative. The term
"Agency Representative"
means an Agency officer or employee
designated in writing by the head
of the Agency, to the District Director(s)
at _____
_____
and
the Service Center Director at _____
_____
, as an individual who is to inspect or receive Federal
returns or Federal
return information on behalf of the Agency as provided
by section 6103(d)
of the Code, but only so long as the duties and employment
of such officer
or employee require access to Federal returns and Federal
return information
for purposes of State tax administration. |
|
*2.6 IRS Representative. The term
"IRS Representative"
means an officer or employee of
the IRS who has been designated in writing
to the head of the Agency by the
District Director(s) at _____
_____
, or the Service Center Director at _____
_____
, as an individual who is to inspect or receive State
returns or State
return information on behalf of IRS, but only so long as
the duties and
employment of such officer or employee require access to State
returns
and return information for the purpose of Federal tax administration. |
|
| 2.7 Federal Return. The term "Federal Return"
is defined in the same manner as provided in
section 6103(b)(1) of the
Code. |
|
| 2.8 Federal Return Information. The
term "Federal Return Information"
is defined in the same
manner as provided in section 6103(b)(2) of the
Code. However, "Federal Return Information"
does not include that information in the
hands of the State which is
obtained by means wholly from sources independent
from the IRS. |
|
| 2.9 State Return. The term "State Return"
means any tax or information return, declaration
of estimated tax, or
claim for refund required by or provided for or permitted
under the provisions
of the internal revenue laws, or related statutes, of
the State, and any
amendment or supplement thereto, including supporting schedules,
attachments,
or lists which are supplemental to or part of, the return so
filed. |
|
| 2.10 State Return Information. The
term "State Return Information"
means a taxpayer's identity,
the nature, source, or amount of his/her
income, payments, receipts, deductions,
exemptions, credits, assets, liabilities,
net worth, tax liability, tax withheld,
deficiencies, over assessments,
or tax payments whether the taxpayer's State
return was, is being, or will
be examined or subject to other investigation
or processing, or any other
data received by, recorded by, prepared by, furnished
to, or collected
by the Agency with respect to a State return or with respect
to the determination
of the existence, or possible existence, of liability
(or the amount thereof)
of any person under the internal revenue laws, or
related statutes, of
the State, for any tax, penalty, interest, fine, forfeiture,
or other imposition,
or offense. |
|
| 2.11 Inspection. The term "Inspection"
means any examination of a return or return information. |
|
| 2.12 Disclosure. The term "Disclosure"
means the making known to any person in any manner whatever
a return or
return information. |
|
| 2.13 State Tax Administration. The
term "State Tax Administration" |
|
|
|
(a) |
means: |
|
|
|
(i) |
the administration, management, conduct, direction,
and supervision of
the execution and application of the revenue laws, or related
statutes
of the State, and |
|
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|
(ii) |
the development and formulation of State tax policy
relating to existing
or proposed internal revenue laws, or related statutes,
of the State, and |
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|
(b) |
includes assessment, collection, enforcement, litigation,
and statistical
gathering functions under such laws or statutes. |
|
| 2.14 Code. The term "Code"
means the Internal Revenue Code of 1986, as amended. |
| SECTION 3. Disclosure of Federal
Returns and Federal Return Information |
|
3.1 Pursuant to the laws of the State,
the
Agency is charged with the responsibility for the administration of State
taxes imposed on (specify)
_________________________________________________________
_________________________________________________________
_____
. Federal returns and Federal return information
(whether
originals, paper copy, photocopy, microfilm, magnetic media, or any
other
form) received from IRS will be used for the purpose of, and only to
the
extent necessary in, State tax administration. |
|
3.2 This agreement constitutes the
requisite
authorization pursuant to section 6103(d)(1) of the Code for IRS
to disclose
to, and permit inspection by, an Agency Representative of Federal
returns
and Federal return information relating to taxes imposed by chapter(s)
_________________________________________________________
(only those which are applicable from chapters
1, 2, 6, 11, 12, 21, 23,
24,
_________________________________________________________
31,
32, 44, 45, 51, 52 and 36(D) of the Code)
|
|
| *3.3 Upon the occurrence of any change
in
employment, duties, or relevant matters affecting an Agency Representative's
right of access to Federal returns and Federal return information or status
as Agency Representative, the head of the Agency shall promptly advise
in
writing the District Director(s) at _____
and
the Service Center Director at _____
that such
individual is no longer an Agency representative. |
|
| 3.4 An Agency representative to whom
a Federal
return or Federal return information has been disclosed, may thereafter
disclose such return or return information: |
|
|
|
(a) to another employee of the Agency for
the purpose
of and only to the extent necessary in the administration of the
State
tax laws for the Agency is responsible; |
|
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|
(b) to a person described in section 6103(n)
of the
Code or to any officer or employee of such person, solely for the purpose
of State tax administration and in a manner consistent with applicable
regulations,
published rules or written communications, however pursuant
to Treasury Regulation
301.6103(n)-1, whenever Federal tax returns
and return information are
to be disclosed to a person described in section
6103(n), the above named
State agency will notify the IRS prior to the
execution of any agreement to
disclose to such person, but in no event
less than 45 days prior to the disclosure
of that information to the person. |
|
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|
(c) to a legal representative of the Agency
personally
and directly engaged in, an for use in, preparation for a civil
or criminal
proceeding (or investigation which may result in a proceeding)
before a
State administrative body, grand jury, or court in a matter involving
State
tax administration, if the returns and return information satisfy one
or
more of the criteria established in section 6103(h)(2)(A), (B) or (C). |
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(d) to an officer or employee of the State
audit agency
for the purpose of and only to the extent necessary in making
an audit
of the State tax agency. |
|
| 3.5 A Federal return or Federal return
information
may be disclosed in a judicial or administrative proceeding pertaining
to State tax administration, but only if the same criteria established
in
section 6103(h)(4)(A), (B) or (C) are met. |
|
| 3.6 Notwithstanding any other provision
of
this section, IRS will not disclose a Federal return or Federal return
information under this section if such disclosure would identify a confidential
informant or seriously impair a Federal civil or criminal tax investigation.
The Agency agrees that neither it nor its legal representatives will make
any further use or disclosure of a Federal return or Federal return information
disclosed to an Agency Representative by IRS if IRS notifies the head of
the
Agency in writing that such further use or disclosure would identify
a confidential
informant or seriously impair a Federal civil or criminal
tax investigation.
The Agency further agrees that prior to the disclosure
of any Federal return
or Federal return information in a State judicial
proceeding or to any party
other than the taxpayer or his/her designee
in a State administrative proceeding
as provided by paragraph 3.5 of this
agreement, the head or legal representative
of the Agency will notify in
writing the Service Center or District Director,
from whom the return or
return information was received, of the intention
to make such disclosure.
No officer, employee or legal representative shall
so disclose a Federal
return or Federal return information in such State judicial
or administrative
proceeding if the Service Center or District Director or
other IRS official,
within 30 days following receipt of such written notice,
informs the head
or legal representative of the Agency that such disclosure
would identify
a confidential informant or seriously impair a Federal civil
or criminal
tax investigation. |
|
| 3.7 Additionally, the Agency agrees
that it
will notify the IRS when, during an audit of the Agency by the State
Audit
Agency, Federal returns and Federal return information are disclosed
to
the State Audit Agency and such information is made part of the State Audit
Agency's work papers. |
|
| SECTION 4. Disclosure of State
Returns and Return Information |
|
| 4.1 This agreement constitutes the
requisite
authorization for the Agency to disclose to, and permit inspection
by,
IRS Representatives of State returns and State return information for
the
purpose of, and only to the extent necessary in the administration of
the
internal revenue laws, or related statutes, of the United States. Any
State
returns and State return information so disclosed to, or inspected by
an
IRS Representative become, in the hands of IRS, "taxpayer
return information"
as defined by section 6103(b)(3) of the Code and
may be redisclosed by
IRS only to such persons, for such purposes, and under
such conditions
as may be prescribed by the Code. |
|
| 4.2 Nothing in this agreement shall
be construed
as authority for the Agency to disclose State returns and State
return
information where such disclosure would be contrary to State law. |
|
*4.3 Upon the occurrence of any change
in
employment duties, or other relevant matters affecting an IRS representative's
right of access to State returns and State return information or status
as
an IRS Representative, the District Director(s) at _____
and the Service Center Director at
_____
, shall promptly advise the Agency in writing that such individual
is
no longer an IRS Representative. |
| SECTION 5. Other Cooperative Activities |
|
| *5.1 Subject to the restrictions and
other
provisions of this agreement and the availability of enforcement resources,
the Agency and IRS will develop cooperative return selection and examination
programs with the objective of avoiding unnecessary duplication of Federal
and State audit coverage. |
|
| *5.2 Information other than Federal
or State
returns and return information, which the Agency and IRS may deem
to be
relevant or useful to the administration of State and Federal tax laws,
may be exchanged pursuant to arrangements made by the Agency and IRS. |
|
| *5.3 In addition to the exchange of
tax and
other information, the Agency and IRS will, to the extent feasible,
extend
to each other assistance in other tax administration matters. This
may
include such activities as taxpayer assistance, stocking tax forms for
the public, training of personnel, special statistical studies and compilations
of data, development and improvement of tax administration systems and
procedures,
and such other activities as may improve tax administration. |
|
| SECTION 6. Safeguards and Other
Requirements |
|
| 6.1 As an express condition for the
inspection
and disclosure of Federal returns and Federal return information,
the Agency
agrees to comply with the safeguards and requirements prescribed
by section
6103(p)(4) of the Code and any implementation of such safeguards
and requirements
as may be provided by regulations and published procedures
including: |
|
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|
(a) furnishing an annual report to the IRS
describing
the procedures established and utilized by the agency for ensuring
the
confidentiality of such returns and return information; |
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(b) permitting IRS to review the extent
to which the
Agency is complying with the requirements of this paragraph;
and |
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(c) informing in writing all Agency Representatives
and other persons to or by whom disclosure or inspection of Federal returns
or Federal return information is authorized of the criminal penalties and
civil liability provided by sections 7213 and 7431 of the Code for a disclosure
of such returns and return information which is unauthorized by the Code. |
|
| 6.2 To the extent consistent with
Federal
law IRS will accord State returns and State return information confidentiality
safeguards comparable to those required of the Agency pursuant to this
agreement. |
|
| 6.3 Processing of Federal returns
and Federal
return information received by the Agency from IRS in the form
of microfilms,
photo-impressions, magnetic media or other format (including
reformatting
or reproduction, or conversion to magnetic media, punch cards,
or hard
copy printout) and transmission and storage of such Federal returns
or
Federal return information by or on behalf of the Agency may be performed
by either Agency owned and/or operated computer facilities, or State shared
facilities or by any other person described in section 6103(n) of the Code.
In those cases where such facilities used by the State Agency are shared
with
other State agencies or operated by any other person described by
section
6103(n) of the Code, the Agency will ensure the confidentiality
of the Federal
returns and Federal return information provided to such
shared facility or
person. As part of this responsibility the terms of
any contract or agreement
between the Agency and a shared computer facility
or other person to whom
Federal return or Federal return information is
or may be disclosed for a
purpose described in this subsection, will provide,
or will be amended to
provide, that such person, and officers and employees
of the person, will
comply with the applicable safeguard conditions contained
in regulations,
published rules or procedures, or written communications. |
|
| 6.4 Because some taxpayers may be
unaware
that Agency tax officials are authorized under Federal law to obtain
Federal
returns and Federal return information for State tax administration
purposes,
the Agency will publicize, in a manner satisfactory to IRS, that
such returns
or return information were obtained pursuant to specific authority
granted
by the Code. Similar publicity will be provided by IRS, if requested
by
the Agency, for State tax information furnished IRS pursuant to State law. |
|
| SECTION 7. Limitations |
|
| 7.1 Pursuant to the provisions of
section
6103(p)(2) of the Code, and of State law, if any, IRS and the Agency
may
charge each other a reasonable fee for furnishing returns and return information
under the terms of this agreement. IRS and the Agency may agree not to
charge
each other for the costs of routine reproduction of returns and
return information
mutually exchanged. |
|
| 7.2 Under no circumstances will the
Agency
permit any Federal return or Federal return information to be inspected
by, or disclosed to an individual who is the chief executive officer of
the
State or any person other than one described in section 3 of this agreement. |
|
| 7.3 Notwithstanding any other provision
of
this agreement, IRS will not disclose or make known in any manner whatever
to any person described in section 3 of this agreement-- |
|
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(a) any original, copy, abstract of any
return, payment,
or registration made pursuant to chapter 35 of the Code (relating
to taxes
on wagering); |
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(b) any record required for making any such
return,
payment, or registration made or required pursuant to chapter 35 which
IRS is permitted by the taxpayer to examine or which is produced pursuant
to section 7602 of the Code (relating to the examination of books and witnesses); |
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(c) any information obtained by the exploitation
of
any such return, payment, registration, or record made or required pursuant
to chapter 35. |
|
| 7.4 Notwithstanding any other provision
of
this agreement, IRS will not disclose or make known in any manner to any
person described in section 3 of this agreement information which was obtained
pursuant to a tax convention between the United States and a foreign government. |
|
| SECTION 8. Officials to Contact
for Obtaining Information |
|
| 8.1 Requests by the Agency for Federal
returns
or Federal return information should be made to the officials named
in
the implementing agreement or to the officials below if an implementing
agreement has not been executed. |
|
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|
(a) Requests by the Agency for Federal return
information
in magnetic media mode should be made to the District Director
at (leave blank if implementing agreement
used)
who will be coordinating the requests with Headquarters. |
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|
(b) Requests for physical inspection or
copying of Federal
returns, or requests for audit abstracts and reports pertaining
to such
returns, showing addresses within the State should be made to the
Director,
Internal Revenue Service Center, (address,
leave blank if implementing agreement used)
who will be
response for making the proper arrangements for inspection
or copying. |
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(c) Requests by the head of the Agency or
up to two
of his/her designees for Federal returns of taxpayers or Federal
return
information relating to taxpayers showing addresses outside the State
should
be made to the District Director at (address,
leave blank if implementing agreement used)
. |
|
| 8.2 Requests by authorized officers
and employees
of the IRS for inspection or copying of State returns and State
return
information should be made to the officials named in the implementing
agreement
supplementing this agreement, or to the (title
of agency officials)
if an implementing agreement has not been executed. |
|
| SECTION 9. Termination or Modification
of Agreement |
|
| 9.1 The provisions of the agreement
are subject
to provisions of the Code, implementing regulations, published
procedures,
and to the provisions of State statutes and regulations. This
agreement
may be terminated or modified at the discretion of IRS or the Agency
due
to changes in Federal or State statutes and regulations or whenever in
the administration of Federal or State laws that action seems appropriate. |
|
| 9.2 Any unauthorized use or disclosure
of
Federal returns or Federal return information furnished pursuant to this
agreement or inadequate procedures for safeguarding the confidentiality
of
such returns and return information, also constitutes grounds for termination
of this agreement and the exchange of information there under, subject
to
the rights of administrative appeal as provided by regulations prescribed
by section 6103(p)(7) of the Code. |
|
| 9.3 Notwithstanding any other provision
of
this agreement, no Federal return or Federal return information shall be
disclosed after December 31, 1978, by IRS to any person described in section
3 of this agreement if the requirements of section 6103(p)(8) of this Code
are not met. |
| APPROVED: |
|
| _____ |
_____ |
| (signature) |
Commissioner of Internal Revenue |
| _____ |
|
| (title of agency official) |
|
| Signed at _____ |
Signed at Washington, DC, this |
| this _____
day of _____
, 19 _____
. |
_____
day
of _____
, 19 _____
. |
