Revision: Dec. 22, 2011, midnight
SB 307-FN – AS INTRODUCED
2012 SESSION
10/03
SENATE BILL 307-FN
AN ACT relative to the refund of tax overpayment related to a fraudulent investment scheme.
SPONSORS: Sen. Odell, Dist 8; Sen. Luther, Dist 12; Sen. Lambert, Dist 13; Sen. Rausch, Dist 19; Sen. D'Allesandro, Dist 20; Sen. Boutin, Dist 16; Rep. Winter, Merr 3; Rep. Cunningham, Sull 2
This bill allows a taxpayer to petition for refund of tax overpayments after final determination of a fraudulent investment scheme.
This bill is a request of the department of revenue administration.
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Explanation: Matter added to current law appears in bold italics.
Matter removed from current law appears [in brackets and struckthrough.]
Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
12-2939
10/03
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Twelve
AN ACT relative to the refund of tax overpayment related to a fraudulent investment scheme.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 New Section; Fraudulent Investment Scheme; Refunds. Amend RSA 21-J by inserting after section 28-d the following new section:
21-J:28-e Fraudulent Investment Scheme; Refund Request Procedure.
I. Notwithstanding any other provision of law, any taxpayer aggrieved by a fraudulent investment scheme may petition for a refund of overpayment of taxes resulting from a fraudulent investment scheme that has been finally determined and for which an amended federal tax return has been filed claiming a theft loss for the fraudulent investment scheme under Internal Revenue Code section 165. Such petition for refund of overpayment of taxes shall be made within 180 days of the taxpayer filing the amended federal tax return.
II. For purposes of this section:
(a) “Finally determined” means a criminal judicial decision by the highest court of competent jurisdiction or by a court of competent jurisdiction from which no appeal has been taken and the time within which to appeal has expired; and no claim for reimbursement of any portion of the theft loss exists with respect to which there is a reasonable prospect of recovery.
(b) “Fraudulent investment scheme” means a transaction in which the party perpetrating the fraud receives cash or property from investors, purports to earn income for the investors, and reports to the investors income amounts that are wholly or partially fictitious. In a fraudulent investment scheme the party perpetrating the fraud criminally appropriates some or all of the investors’ cash or property.
III. After a petition for refund is filed, the department shall examine the petition and either issue a notice of refund or credit to the claimant or issue a notice of denial. After receipt of the department’s decision, the claimant may file a written petition for reconsideration with the department as provided in RSA 21-J:28-b.
2 New Subparagraph; Statute of Limitations; Exceptions. Amend RSA 21-J:29, I by inserting after subparagraph (d) the following new subparagraph:
(e) Notwithstanding subparagraphs I(b), (c), and (d), in the case of a petition for refund of overpayment of taxes based upon a claim of a fraudulent investment scheme under RSA 21-J:28-e, the petition for a refund shall be made within 180 days of the taxpayer filing an amended federal tax return claiming a theft loss for the fraudulent investment scheme under Internal Revenue Code section 165.
3 Effective Date. This act shall take effect July 1, 2012.
LBAO
12-2939
11/21/11
SB 307-FN - FISCAL NOTE
AN ACT relative to the refund of tax overpayment related to a fraudulent investment scheme.
FISCAL IMPACT:
The Department of Revenue states this bill may decrease state revenue by an indeterminable amount in FY 2013 and each year thereafter. There will be no impact on state, county, and local expenditures, or county and local revenue.
METHODOLOGY:
The Department of Revenue states this bill allows a taxpayer to petition for refund of tax overpayments after final determination of a fraudulent investment scheme (Ponzi Schemes). The Department states the existing statute does not provide the appropriate mechanisms for a taxpayer to request a refund for taxes paid of fictitious income, particularly when that request may be outside the statute of limitations. The Department cannot estimate how many New Hampshire residents may be impacted by fraudulent tax schemes and how many would request a refund, and therefore are unable to determine the exact fiscal impact at this time.