Ohio Senate passes taxpayer statute of limitations.

The Ohio Senate approved Society-backed legislation (Sub. HB 390) that would create a statute of limitations on the collection of assessed taxes. The bill is sponsored by Rep. Mary Taylor, CPA, R-Green, an Ohio Society member and candidate for state auditor.

In testifying in support of the bill before the House Ways and Means Committee, Dave Adler, CPA, chair of the Society's tax legislation policy committee, encouraged the bill's quick passage as "the honest taxpayer should not be punished for an unlimited amount of time because the state is unwilling or unable to notify the taxpayer in a timely manner." Additional testimony included relatives of elderly taxpayers who were forced to pay high fines and penalties for a decades-old tax assessment they didn't even know existed.

As amended, Sub. HB 390 establishes a seven-year statute of limitations in which the state must begin judicial proceedings after an assessment is issued and within four years after an assessment becomes final, whichever is later. Prior to being amended, the bill would have imposed a 10-year statute of limitations on the state to begin judicial proceedings to collect most unpaid state tax debts once they had become final.

The proposed legislation would also:

* Reinstitute a statute of limitations on enforcing certain statutory liens (12 years)

* Provide innocent spouse relief for those who file a joint return under certain circumstances

In passing the bill, the Senate also made significant changes as part of a compromise to appease concerns raised by Attorney General Jim Petro. Due to the changes, the Ohio House, which approved the measure earlier this spring, will need to concur before the legislation heads to the Governor's desk. The legislation is expected to go before the House when the General Assembly returns from spring recess in May.

Current law allows an unpaid tax or assessment to be canceled if the state determines it to be uncollectible. All unpaid amounts are canceled if they are not collected within 40 years after the debt is certified by the Attorney General for collection. Otherwise, current law places no time limit on when efforts to collect outstanding tax debts must begin.

Opposition testimony was limited to two special counsel attorneys who collect debt on behalf of the state.

In addition to testifying in Ways and Means Committee on the bill, the Society has served as a resource as the bill moved through the legislative process. For more information, contact Amy Mignogna at [e-mail] or 800.686.2727, ext. 362.