73.16 General provision.

(1) Definitions. In this section:

(ab) “Combined group" has the meaning given in s. 71.255 (1) (a).

(b) “Department" means the department of revenue.

(c) “Person who is a party to the determination" means a person who requests a determination for that person's benefit, files a claim for a refund, or is assessed by the department, but not including any of the following:

1. A person who, on behalf of another person, requests a determination or a claim for a refund or appeals a determination.

2. A shareholder of a tax-option corporation, a member of a limited liability company, or a partner of a partnership, unless such an individual is named or identified in the determination, claim for a refund, or assessment.

3. An anonymous person who requests a determination.

(d) “Published" means prepared and issued for public distribution and does not include guidance on a private matter or issue.

(e) “Written guidance" means a written statement made by an employee of the department acting in an official capacity regarding a Wisconsin tax question to the person or the person's representative.

(2) Relying on published guidance.

(a) Except as provided in par. (b), in the course of any determination, or in the course of any proceeding appealing any determination, the department shall not take a position that is contrary to any rule promulgated by the department that was in effect during the period related to the determination or that is contrary to any guidance published by the department prior to that period and not subsequently retracted, altered, or amended by the department or the legislature or by a final and conclusive decision of the tax appeals commission or courts.

(am) Except as provided in par. (c), in the course of any determination, or in the course of any proceeding appealing a determination, the department shall not take a position that is contrary to any written guidance that was provided to a person who is a party to the determination or the appeal of the determination regarding the same facts as in the determination and not subsequently retracted, altered, or amended by the department or the legislature or by a final and conclusive decision of the tax appeals commission or courts.

(b) The department may retroactively apply any rule change that is related to implementing a legislative act or a final and conclusive decision of the tax appeals commission or the courts to take effect no earlier than the act's effective date or the date on which the decision became final and conclusive, unless otherwise prescribed by the legislature, tax appeals commission, or court, and only if the department submits the rule's scope statement to the governor for approval under s. 227.135 (2) no later than 18 months after the latter of the legislative act's publication date, effective date, or initial applicability date, or the date on which the decision becomes final and conclusive. A retroactive application of a rule change not described under this paragraph shall be subject to approval under s. 227.185.

(c) With regard to any position taken by the department in any matter described under par. (am), if the department retracts, alters, or amends previously published or previously issued written guidance for any purpose other than to implement a legislative act or final and conclusive decision of the tax appeals commission or courts, the department shall apply the retraction, alteration, or amendment prospectively only, unless the change is to a taxpayer's benefit, in which case, the department shall apply the retraction, alteration, or amendment retroactively. A retroactive change in any previously published or previously issued written guidance related to implementing a legislative act or final and conclusive decision of the tax appeals commission or courts may take effect no earlier than the act's effective date or the date on which the decision became final and conclusive unless otherwise prescribed by the legislature or ordered by the courts.

(3) Relying on past audits.

(a) A person who is subject to an audit determination by the department, including all other members of that person's combined group for purposes of determining the tax due under s. 71.23 for taxable years beginning after December 31, 2008, shall not be liable for any amount that the department asserts that the person owes if all of the following conditions are satisfied:

1. The liability asserted by the department is the result of a tax issue during the period associated with a prior audit determination for which the person is subject to and the tax issue is the same as the tax issue during the period associated with the current audit determination.

2. A department employee who was involved in the prior audit determination identified or reviewed the tax issue before completing the prior audit determination, as shown by any schedules, exhibits, audit reports, documents, or other written evidence pertaining to the audit determination, and the schedules, exhibits, reports, documents and other written evidence show that the department did not adjust the person's treatment of the tax issue.

3. The liability asserted by the department as described under subd. 1. was not asserted in the prior audit determination.

(b) Paragraph (a) does not apply to any period associated with an audit determination, if the period begins after the promulgation of a rule, dissemination of written guidance to the public or to the person who is subject to the audit determination, the effective date of a statute, or the date on which a tax appeals commission or court decision becomes final and conclusive and if the rule, guidance, statute, or decision imposes the liability as a result of the tax issue described in par. (a) 1.

(c) Paragraph (a) does not apply to any period associated with an audit determination if any of the following applies:

1. The department establishes by clear and satisfactory evidence that the taxpayer provided incomplete or false information relevant to the tax issue in the prior audit determination.

2. The tax issue was settled in the prior audit determination by a written agreement between the department and the taxpayer that was entered into before April 5, 2018.

3. The tax issue was settled in the prior audit determination by a written agreement between the department and the taxpayer that was entered into on or after April 5, 2018, and in which the parties acknowledged that the department did not adopt the taxpayer's position on the tax issue.

(4) Negligence determinations. The department shall not impose a penalty on a taxpayer under ss. 71.09 (11) (d), 71.83 (1) (a) 1. to 4. and (3) (a), 76.05 (2), 76.14, 76.28 (6) (b), 76.39 (3), 76.645 (2), 77.60 (2) (intro.), (3), and (4), 78.68 (3) and (4), and 139.25 (3) and (4), unless the department shows that the taxpayer's action or inaction was due to the taxpayer's willful neglect and not to reasonable cause.

(5) Applicability. Except as provided in sub. (4), notwithstanding any other provision of law, this section applies to all taxes and fees administered by the department.

History: 2011 a. 68; 2013 a. 20; 2017 a. 231.