(a) If a taxpayer or employer fails or refuses to make a return or payment as required, in whole or in part, or if the Administrator or the Department of Treasury has reason to believe that a return made does not supply sufficient information for an accurate determination of the amount of tax due, the Administrator or the Department may examine the books, papers and records of any person, employer, taxpayer or agent or representative of any person, employer or taxpayer, or audit the accounts of any person, employer or taxpayer or any other records pertaining to the tax, to verify the accuracy and completeness of a return filed, or if no return was filed, to ascertain the tax, withholding, penalties, or interest due under this chapter.
(b) The Administrator or the Department may examine any person, under oath, concerning income which was or should have been reported for taxation under this chapter, and for this purpose may compel the production of books, papers and records and the attendance of all parties before him or her whether as parties or witnesses, if he or she believes those persons have knowledge of the income. In addition, for tax years after the 1996 tax year and for which a City has entered into an agreement with the Department of Treasury pursuant to Section 9 of Chapter 1 of the Internal Revenue Code, all of the following apply to implement this section:
(1) The Department shall send to the taxpayer or employer a letter of inquiry stating, in a courteous and unintimidating manner, the Department's opinion that the taxpayer or employer needs to furnish further information or owes taxes to the City, and the reason for that opinion. A letter of inquiry shall also explain the procedure by which the taxpayer or employer may initiate communication with the Department to resolve any dispute. A letter of inquiry may be served on the taxpayer in any manner determined appropriate by the Department. This paragraph does not apply in any of the following circumstances:
A. The taxpayer or employer files a return that shows a tax due and fails to pay that tax.
B. The deficiency resulted from an audit of the taxpayer's or employer's books and records by the City or the Department
C. The taxpayer or employer otherwise affirmatively admits that a tax is due and owing.
(2) If the dispute is not resolved within thirty days after the Department sends the taxpayer or employer a letter of inquiry, or if a letter of inquiry is not required under paragraph (b)(1) hereof, the Department, after determining the amount of tax due from a taxpayer or employer, shall give notice to the taxpayer or employer of the Department's notice of intent to assess the tax. The notice shall include all of the following:
A. The amount of the tax the Department claims the taxpayer or employer owes.
B. The reason for the deficiency.
C. A statement advising the taxpayer or employer of his or her right to file a protest and to a hearing with the Department.
(c) A taxpayer or employer has thirty days after receipt of a notice of intent to assess within which to file a written protest with the Department. If a written protest is received, the Department shall give the taxpayer or employer or duly authorized representative of the taxpayer or employer an opportunity to be heard and present evidence and arguments in his or her behalf.
(d) If a protest to the notice of intent of assess the tax under subsection (b) hereof is determined by the Department to be a frivolous protest or a desire by the taxpayer or employer to delay or impede the administration of the tax under this chapter, a penalty of twenty-five ($25.00) or twenty-five percent of the amount of tax under protest, whichever is greater, shall be added to the tax.
(Ord. 360. Passed 12-11-93.)