HB427 Alabama 2011 Session

Summary

Primary Sponsor

Paul DeMarco

Republican

Session

Regular Session 2011

Title

Revenue Department, Tax Appeals Commission, established, Administrative Law Division abolished, Tax Appeals Commission Act, Secs. 40-2B-1 to 40-2B-25, inclusive, added; Secs. 40-2A-3, 40-2A-4, 40-2A-5, 40-2A-7, 40-2A-8, 40-2A-10, 40-2A-11, 40-18-27 am'd.; Sec. 40-2A-9 repealed

Summary

HB427 creates the Alabama Tax Appeals Commission to hear tax disputes, abolishes the Administrative Law Division, and aligns Alabama procedures with the ABA Model State Administrative Tax Tribunal Act.

What This Bill Does

It replaces the Department of Revenue's Administrative Law Division with an independent Alabama Tax Appeals Commission to hear tax and certain local tax appeals. It establishes a transition plan including moving equipment and case files, provides initial funding, and lets self-administered counties or municipalities elect-out of the Commission's jurisdiction for local taxes. It adopts federal-style taxpayer protections, expands innocent-spouse relief, increases penalties for fraud and frivolous actions, extends appeal timelines, and creates expedited revenue rulings and industry-wide revenue procedures. It changes dispute resolution to a de novo circuit court standard for final orders, requires open hearings with confidentiality rules, and sets new rules for penalties, refunds, and record-keeping.

Who It Affects

• Taxpayers and their representatives: gain an independent forum to challenge Department of Revenue and certain local tax decisions, with new rights such as expedited revenue rulings and broader innocent-spouse relief, but face new penalties and longer or altered appeal timelines.
• Department of Revenue and self-administered counties/municipalities: duties shift to the new Tax Appeals Commission, funding changes occur, and counties/municipalities can elect-out of the Commission's jurisdiction for local taxes (with process to elect-out and revocation), affecting how certain disputes are heard.

Key Provisions

• Establishes the Alabama Tax Appeals Commission as an independent executive-branch agency and abolishes the Department of Revenue's Administrative Law Division; transfers property and initial funding to the new Commission.
• Adopts the American Bar Association Model State Administrative Tax Tribunal Act to guide operations, hearings, and authority to address all refund arguments and ensure due process; clarifies authority in response to Rheem Manufacturing Co. v. State Department of Revenue.
• Creates Chapter 2B detailing jurisdiction to hear appeals of Department of Revenue decisions and certain local taxes, with transition provisions, rules for serving papers, subpoenas, hearings, and open records to the public.
• Conforms to federal Taxpayer's Bill of Rights II improvements, including broader innocent-spouse relief, higher penalties for negligence and fraud, increased penalties for frivolous filings or appeals, and required amended state income tax returns after IRS audit changes.
• Extends time to file appeals of preliminary or final assessments and establishes an expedited revenue ruling process; authorizes industry-wide revenue procedures and limits on their geographic applicability.
• Allows self-administered counties/municipalities to elect-out of the Commission's jurisdiction for certain local taxes, with procedures to elect-out or revoke, publication requirements, and transitional treatment of pending appeals.
• Imposes de novo circuit court review for appeals from final orders, imposes burden of proof on the taxpayer, prohibits filing fees for appeals, and sets standards for records, witnesses, and penalties, including discovery and record-keeping rules.

AI-generated summary using openai/gpt-5-nano on Feb 24, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Revenue Department