On April 22, 2021, Tennessee Governor Bill Lee signed House Bill 38 into law, establishing protections for taxpayers who rely on published tax guidance issued by the Department of Revenue. The new law provides that when the Commissioner of Revenue publishes guidance regarding tax law or policy, affected taxpayers are entitled to rely on that guidance. If subsequently the Commissioner changes that guidance, a taxpayer who relied on that guidance before it was changed is not liable for any assessment of additional tax, interest, or penalty that accrued before the guidance was changed.
Additionally, this relief is available during an audit if the following conditions are met:
- The advice was reasonably relied upon by the taxpayer;
- Any proposed assessment that was not caused by the taxpayer’s failure to provide adequate or accurate information; and
- The department provided the advice to the taxpayer in writing, or department records establish that the erroneous advice was given verbally.
The law also provides that any policy changes can only be applied to the exercise of those situations occurring after that date of the policy change, unless otherwise provided by law.
This law change is effective on July 1, 2021.
TECHNICAL INFORMATION CONTACTS:
Mark L. Nachbar
Principal
Ryan
630.515.0477
mark.nachbar@ryan.com
Mary Bernard
Manager
Ryan
401.272.3363
mary.bernard@ryan.com
The material presented in this communication is intended to provide general information only and should solely be seen as broad guidance and not directed to the particular facts or circumstances of any individual who may read this publication. No liability is accepted for acts or omissions taken in reliance upon the content of this piece. Before taking (or not taking) any action, readers should seek professional advice specific to their situation from Ryan, LLC or other tax professionals. For additional information about this topic, please contact us at info@ryan.com.