The following rules apply when a taxpayer fails to file a return, fails to pay the payroll and self-employment tax when due, or pays less than the amount due:
A. If a taxpayer fails to make a return, the Collector shall prepare an estimate of the amount of payroll and self-employment tax due from the taxpayer, based on the best information available to the Collector. The Collector may make investigations to assist in making the estimate. The Collector may consider the number of employees, the wages or other compensation customarily paid in the type of business, the volume of business done and customary commissions or bonuses paid to employees in the same type of business, and any other relevant matters. The Collector may estimate the compensation customary in the business by comparing returns filed by other taxpayers in the same business or similar businesses. When the Collector estimates the payroll and self-employment tax, the amount of the interest and late charge provided by this chapter shall be added to the taxes due. The Collector shall notify the taxpayer in writing of the amount due. The notification shall be in writing in the form of a pre-collection notice containing a brief description of the method and estimated figures used in arriving at the estimated tax. The taxpayer shall respond within 30 days of notification of the estimated tax by:
1. Filing a tax return accompanied by payment of the entire balance due, together with interest and late charge due. The return shall be processed like any late return, and shall establish the payroll tax liability of the taxpayer in place of the estimated tax prepared by the Collector. The Collector may, however, later determine that the amount shown on the return is insufficient, so there is a deficiency, in the same manner as in the case of other returns.
2. Contacting the Collector or Finance Director to set up a payment plan.
3. If the taxpayer fails to respond to the notification within 30 days a collection notice will be mailed informing said taxpayer of the estimated balance, interest and late charges being turned over to a collection agency.
B. If the Collector determines, by examining available evidence that the amount of payroll and self-employment tax paid by any taxpayer is less than the amount required by this chapter, the Collector shall notify the taxpayer of the deficiency. The Collector may use any of the methods authorized by §§ 3.24.010 et seq. of this chapter to determine whether a deficiency exists and to determine the amount of the deficiency. The Collector shall thereupon notify the taxpayer of the deficiency. The notice shall be in writing and shall state not only the amount of the deficiency, but also the methods and estimates used in arriving at the amount of deficiency. If the taxpayer does not object within 30 days of the date of receiving the notice, the taxpayer shall be deemed to have accepted the revised figures for payroll tax liability. If the taxpayer does file a written objection within the time specified, the taxpayer shall pay the tax, together with penalties and interest, under protest, and may thereupon, pursue administrative and judicial remedies as provided by ordinance and by state law, to seek a refund.
C. If the Collector finds that any taxpayer has overpaid, the Collector shall notify the taxpayer of the taxpayer’s overpayment and shall refund the amount of the overpayment to the taxpayer in accordance with § 3.24.180.
D. When the Collector notifies any taxpayer of any estimated tax, alleged overpayment or refund, the Collector shall include in the notice clear instructions on how, when and where the taxpayer may protest or appeal the decision.
E. If a taxpayer or any person, firm, association or corporation required by this chapter to pay a tax or to file a return shall fail to file any return for any year, the failure to file shall constitute a continuing offense against the city and the Collector may proceed to estimate and collect the payroll and self-employment tax at any time. In all other cases, no increase shall be made in any taxpayer’s payroll tax liability unless the first notice of the increase is received by the taxpayer within 3 years of the time the return was first due.
(Ord. 1081, passed 11-21-2001; Am. Ord. 1391, passed 12-4-2013)