HB264 Summary

• Creates the Alabama Tax Appeals Commission as an independent executive branch agency to hear and resolve tax disputes between the Department of Revenue and taxpayers before requiring payment, becoming fully operational October 1, 2013.

• Adopts the American Bar Association Model State Administrative Tax Tribunal Act and establishes the Alabama Taxpayers' Bill of Rights II by amending existing taxpayer protections to conform more closely to federal law.

• Increases penalties for tax violations, raising negligence penalties from 5% to 20%, fraud penalties from 50% to 75%, and frivolous return/appeal penalties from $250 to $500.

• Extends appeal timeframes from 30 to 60 days for filing appeals of preliminary and final tax assessments, and requires amended state income tax returns within 180 days when federal audit changes result in additional state tax owed.

• Abolishes the Administrative Law Division of the Department of Revenue and transfers its functions, staff, and case files to the new Tax Appeals Commission, with self-administered counties and municipalities having the option to opt out of the Commission's jurisdiction.