(a) If, as a result of investigation conducted by the City Income Tax Administrator, a return is found to be incorrect, the City Income Tax Administrator is authorized to assess and collect any underpayment of tax withheld at the source or any underpayment of tax owing by any taxpayer with respect to earnings or net profits or both: If no return has been filed and a tax is found to be owed the tax actually owed may be assessed and collected with or without the formality of obtaining a delinquent return from the employer or taxpayer.
If the tax assessed was erroneously paid or withheld to another municipality and if at the time of assessment the period allowed for refund from said municipality has expired, a non-refundable credit will be allowed. Said credit shall be calculated under the provisions of Section 185.04 of the Ordinance.
(b) Should it be disclosed, either as a result of an investigation by the City Income Tax Administrator, or through the medium of the filing of a claim or petition for refund or credit, that an overpayment has been made, the following guidelines shall apply:
(1) The claim must be made within three years from the date on which such payment was made or the return was due, whichever is later.
(2) No refund shall be made to any taxpayer until he has complied with all provisions of the Ordinance and has furnished all information required by the City Income Tax Administrator.
(3) Overpayments will either be refunded or credited to the taxpayer’s current year’s liability at his or her option. Where no election has been made by the taxpayer, overpayments of any year’s taxes shall be applied as follows:
A. To taxes owed for any year in the order in which such taxes become due.
B. In the case of a business, any refund or credit may be applied to an outstanding balance in the corresponding withholding account.
C. To his or her account in the form of a credit in the current tax year.
(4) Credits of less than $2.01 will not be allowed and refunds of less than $2.01 will not be paid.
(e) The employer will in every instance be required to pay the full tax which should have been withheld, even though he may fail to withhold it from the employee. If too much has been withheld, the excess shall be refunded by the employer to the employee. The withholding agent (employer) will be expected to maintain complete records of such adjustments with the employees and explain the details of such adjustments in the withholding return either by schedule or statement. A refund of over-withheld tax may be paid directly to the employee provided the employer submits a statement to the City Income Tax Administrator detailing the circumstances involving said overpayment and relinquishing the right to have said funds directly refunded to them.
(f) In those cases in which too much has been withheld by an employer from an employee and remitted to the City Income Tax Administrator, and there has been a termination of the employee-employer relationship, the taxpayer (employee) may obtain an adjustment by application to the City Income Tax Administrator.
(Res. 240-2003. Passed 12-30-03.)