Part 12.3Underground Economic Activities

Section § 15925

Explanation

This law allows certain California agencies to request information from the Employment Development Department, the California Department of Tax and Fee Administration, and the Franchise Tax Board to investigate underground economic activities involving tax or fee crimes, including felonies. The requested information can include confidential data and is used for assessing leads, conducting investigations, determining restitution owed to the state, prosecuting violations, and performing data analytics. However, any confidential information shared must remain confidential and is subject to specific state and federal privacy laws. The sharing of federal tax data requires authorization from the IRS.

(a)CA Government Code § 15925(a) For a case, including, but not limited to, a Joint Enforcement Strike Force on the Underground Economy case, that involves tax or fee administration associated with underground economic activities, including known or suspected felony violations involving tax-related or fee-related crimes, an agency listed in subdivision (a) of Section 329 of the Unemployment Insurance Code may request information pursuant to subdivision (b) from the Employment Development Department, the California Department of Tax and Fee Administration, and the Franchise Tax Board.
(b)CA Government Code § 15925(b) Upon request of an agency listed in subdivision (a) of Section 329 of the Unemployment Insurance Code, the Employment Development Department, the California Department of Tax and Fee Administration, and the Franchise Tax Board shall fully and timely provide the requesting agency with intelligence, data, including confidential tax and fee information, documents, information, complaints, reports, analysis, findings, or lead referrals for the following purposes:
(1)CA Government Code § 15925(b)(1) To assess leads or referrals in order to determine if an investigation is warranted.
(2)CA Government Code § 15925(b)(2) To conduct investigations.
(3)CA Government Code § 15925(b)(3) To determine restitution owed to the state.
(4)CA Government Code § 15925(b)(4) To prosecute violations.
(5)CA Government Code § 15925(b)(5) To conduct data analytics associated with assessing a lead or referral or conducting an investigation pursuant to the Joint Enforcement Strike Force on the Underground Economy.
(c)Copy CA Government Code § 15925(c)
(1)Copy CA Government Code § 15925(c)(1) Any person from an agency listed in subdivision (a) of Section 329 of the Unemployment Insurance Code who received confidential information obtained pursuant to this section shall not divulge, or make known in any manner not provided by law, any of the confidential information received by or reported to the agency. Confidential information authorized to be provided pursuant to this section shall retain its confidential status and shall otherwise remain subject to the confidentiality provisions contained in, but not limited to, all of the following provisions:
(A)CA Government Code § 15925(c)(1)(A) Section 11183 as that section pertains to the Department of Justice.
(B)CA Government Code § 15925(c)(1)(B) Sections 1094, 1095, and 2111 of the Unemployment Insurance Code as those sections pertain to the Employment Development Department. Part 603 of Title 20 of the Code of Federal Regulations as those provisions pertain to the disclosure of confidential unemployment compensation information.
(C)CA Government Code § 15925(c)(1)(C) Sections 19542, 19542.1, and 19542.3 of the Revenue and Taxation Code as those sections pertain to the Franchise Tax Board.
(D)CA Government Code § 15925(c)(1)(D) Section 15619 of this code, Section 42464.8 of the Public Resources Code, and Sections 7056, 7056.5, 8255, 9255, 9255.1, 30455, 32455, 32457, 38705, 38706, 43651, 45981, 45982, 45983, 45984, 46751, 50159, 50160, 50161, 55381, 60608, and 60609 of the Revenue and Taxation Code, as those sections pertain to the California Department of Tax and Fee Administration.
(E)CA Government Code § 15925(c)(1)(E) Any other information confidentiality provisions in federal and state law.
(2)CA Government Code § 15925(c)(2) Except for restrictions imposed by federal law, nothing in this subdivision shall be construed to prohibit the sharing of confidential information authorized pursuant to subdivision (b).
(d)CA Government Code § 15925(d) Information requested pursuant to this section shall not include federal tax data without authorization from the Internal Revenue Service.
underground economy tax crimes fee violations confidential information agency collaboration investigation requests information sharing data confidentiality Joint Enforcement Strike Force tax restitution lead assessment IRS authorization data analytics investigation warrant California tax agencies
(Added by Stats. 2019, Ch. 626, Sec. 1. (AB 1296) Effective January 1, 2020.)

Section § 15926

Explanation

This law requires the California Department of Justice to maintain two multiagency teams in Sacramento and Los Angeles to tackle tax evasion and fraud in the underground economy. These teams include the Department of Justice, Employment Development Department, California Department of Tax and Fee Administration, and Franchise Tax Board. Their main job is to investigate and prosecute crimes that result in lost state revenues.

Collaboration means that each agency works together to evaluate leads and helps with investigating and prosecuting cases relevant to their jurisdiction.

(a)CA Government Code § 15926(a) The Department of Justice, at a minimum, shall maintain the two multiagency Tax Recovery in the Underground Economy Criminal Enforcement Program investigative teams, formerly known as the Tax Recovery and Criminal Enforcement Task Force, in Sacramento and Los Angeles. These investigative teams, including the Department of Justice, the Employment Development Department, the California Department of Tax and Fee Administration, and the Franchise Tax Board shall continue their collaboration for the recovery of lost revenues to the state by investigating and prosecuting criminal offenses in the state’s underground economy, including, but not limited to, tax-related and fee-related crimes such as tax evasion or tax fraud.
(b)CA Government Code § 15926(b) For the purpose of this section, “collaboration” means the following:
(1)CA Government Code § 15926(b)(1) Each agency works with the investigative teams to assess leads.
(2)CA Government Code § 15926(b)(2) When a case may involve the jurisdiction of an agency, the agency assists the investigative team with the investigation and prosecution of the case.
underground economy tax recovery criminal enforcement tax evasion tax fraud multiagency teams Sacramento Los Angeles Department of Justice Employment Development Department California Department of Tax and Fee Administration Franchise Tax Board lost state revenues investigation prosecution
(Added by Stats. 2019, Ch. 626, Sec. 1. (AB 1296) Effective January 1, 2020.)