42-2101. Private taxpayer rulings; request; revocation or modification; taxpayer information ruling; definitions

A. The department may issue private taxpayer rulings to taxpayers and potential taxpayers on request. Each request shall be in writing and shall:

1. State the name, address and, if applicable, taxpayer identifying number of the taxpayer or potential taxpayer who requests the ruling.

2. Describe all facts that are relevant to the requested ruling.

3. State whether, to the best knowledge of the taxpayer or potential taxpayer, the issue or related issues are being considered by the department in connection with an active audit, protest or appeal that involves the taxpayer or potential taxpayer and whether the same request has been or is being submitted to another taxing authority for a ruling.

4. Be signed by the taxpayer or potential taxpayer who makes the request or by an authorized representative of the taxpayer or potential taxpayer.

B. A taxpayer ruling request that complies with subsection A, paragraphs 2 and 3 of this section and that is signed by a representative of a taxpayer or potential taxpayer shall be considered a request for a taxpayer information ruling instead of a private taxpayer ruling.

C. A private taxpayer ruling or taxpayer information ruling may be revoked or modified by either:

1. A change or clarification in the law that was applicable at the time the ruling was issued, including changes or clarifications caused by legislation, adopted administrative rules and court decisions.

2. Actual written notice by the department to the last known address of the taxpayer or potential taxpayer of the revocation or modification of the private taxpayer ruling or taxpayer information ruling if the taxpayer identifying information has been disclosed to the department pursuant to subsection E of this section. If taxpayer identifying information has not been disclosed, written notice by the department to the last known address of the taxpayer representative who requested the ruling constitutes notice to the taxpayer or potential taxpayer.

D. With respect to the taxpayer or prospective taxpayer to whom the private taxpayer ruling was issued, the revocation or modification of a private taxpayer ruling shall not be applied retroactively to tax periods or tax years before the effective date of the revocation or modification, and the department shall not assess any penalty or tax attributable to erroneous advice that it furnished to the taxpayer or potential taxpayer in the private taxpayer ruling if:

1. The taxpayer reasonably relied on the private taxpayer ruling.

2. The penalty or tax did not result either from a failure by the taxpayer to provide adequate or accurate information or from a change in the information.

E. Subsection D of this section applies to a taxpayer information ruling if the taxpayer or potential taxpayer provides its name, address, identifying number, if applicable, and authorization pursuant to section 42-2003, subsection A, paragraph 1 for the representative of the taxpayer or potential taxpayer before the date the department publishes the ruling.  The department shall notify the representative of the taxpayer or potential taxpayer of the proposed publication date.  If the director has determined that the taxpayer information ruling should not be published pursuant to subsection M of this section, subsection D of this section applies if the taxpayer or potential taxpayer provides the identifying information before the date specified by the department on issuing the taxpayer information ruling to the representative. If the taxpayer or potential taxpayer does not provide the department with the identifying information and representative authorization before the proposed publication date, or for an unpublished ruling, the date specified by the department, the taxpayer information ruling is not binding on the department for the purpose of abating interest, penalty or tax.

F. A private taxpayer ruling or taxpayer information ruling may not be relied on, cited or introduced into evidence in any proceeding by a taxpayer other than the taxpayer who has received the private taxpayer ruling.

G. A taxpayer may apply for an administrative hearing to determine the propriety of a retroactive application of a revoked or modified private taxpayer ruling by filing a written petition with the department pursuant to section 42-1251 within forty-five days after receiving written notice of the department's intent to retroactively apply a revoked or modified private taxpayer ruling. This subsection applies to a taxpayer information ruling if the taxpayer has disclosed the taxpayer's identifying information pursuant to subsection E of this section.

H. A private taxpayer ruling or taxpayer information ruling constitutes the department's interpretation of the law or rules only as they apply to the taxpayer making, and the particular facts contained in, the request.

I. A private taxpayer ruling or taxpayer information ruling may be issued only if no tax has accrued with respect to the transactions, events or facts contained in the request. The department may issue a private taxpayer ruling or taxpayer information ruling addressing a taxpayer's ongoing business activities, except that the ruling applies only to transactions that occur or tax liabilities that accrue from and after the date the taxpayer receives the ruling.

J. Within thirty days after receiving a written request pursuant to subsection A of this section, the department shall meet with the requestor to discuss the facts and circumstances pertaining to the request, at a time and place designated by the department, unless the requestor waives this meeting. The department shall issue private taxpayer rulings or taxpayer information rulings within ninety days after receiving the written request, unless the department and the requestor agree to delay the ruling. If the ruling is expected to be delayed, the department shall notify the requestor of the basis for the proposed delay and the proposed date of issuance.  Pursuant to subsection A of this section, the department may decline to issue a ruling, and this subsection does not require the department to issue a ruling. If the department declines to issue a ruling, the department shall issue appropriate written assistance or advice that explains the reason the department is declining to issue a ruling and provide a general discussion of relevant tax principles or applications.

K. The department shall provide the requestor with a draft of the private taxpayer ruling or taxpayer information ruling at least thirty days before issuing the ruling pursuant to subsection J of this section. If requested by the requestor, the department shall meet with the requestor within fourteen days after providing the draft ruling, at a time and place designated by the department, to discuss the contents of the draft ruling.

L. The department shall maintain the private taxpayer ruling or taxpayer information ruling as a public record and make it available at a reasonable cost for public inspection and copying. The text of private taxpayer or taxpayer information rulings is open to public inspection subject to the confidentiality requirements prescribed by article 1 of this chapter.

M. At the time of making a private taxpayer ruling or taxpayer information ruling request, a taxpayer or potential taxpayer may submit a written request that the ruling not be published due to concerns about confidentiality or other disclosed reasons.  If the director determines that the ruling should not be published and the taxpayer requests that the ruling be kept confidential, the ruling shall be deemed confidential for the purpose of section 39-121.01, subsection D, paragraph 2. If the director determines that the ruling should be published and the taxpayer requests that the ruling be kept confidential, the taxpayer may withdraw the ruling request, and the department shall not proceed with a ruling if the request is withdrawn. Notwithstanding section 41-1092.02, the decision of the director to publish is not an appealable agency action as defined in section 41-1092 and is not subject to appeal by the taxpayer.

N. For the purposes of this section:

1. "Private taxpayer ruling" means a written determination by the department issued on or after September 21, 1991 that interprets and applies one or more statutes contained in this title or title 43 and any applicable administrative rules that the department has adopted to the specific prospective facts described in the request for a private taxpayer ruling.

2. "Taxpayer information ruling" means a written determination by the department issued on or after September 26, 2008 that interprets and applies one or more statutes contained in this title or title 43 and any applicable administrative rules that the department has adopted to the specific prospective facts described in a request for a taxpayer information ruling.