NECESSITY, FUNCTION, AND CONFORMITY:
131.130(1) authorizes the
Department of Revenue to promulgate administrative regulations to enforce
Kentucky's tax laws. This administrative regulation implements
141.310(14) which authorizes
the Department of Revenue to require certain employers to post withholding
Enforcement of Trusteeship. Additional means of enabling the Department of
Revenue to collect withholding taxes has been provided in
141.310(4) which authorizes
the department to fix the amount of and demand the posting of a corporate
surety bond or cash not to exceed $50,000 by any employer required under KRS
Chapter 141, or the administrative regulations promulgated thereunder, to
withhold Kentucky income taxes from wages of employees.
Bond Requirements. For purposes of
, a person from
whom the department may require a withholding tax security bond and those
persons from whom a security bond may be required includes the following:
(1) An employer who is delinquent in either
filing withholding tax returns required by law or is delinquent in submitting
to the department any tax withheld from an employee, or both; or
(2) An employer, who for any reason, the
department determines is or may become an insecure risk for which there is a
need to ensure compliance with the law.
Section 3. Bond Procedures. The department,
after determining that a bond is necessary to ensure compliance of reporting
and paying withholding taxes, shall demand the posting of a security bond by
written notice transmitted by certified mail and shall include therein
instructions and forms for the convenience of the employer.
Section 4. Enforcement of Bond Requirement.
Failure to post the bond in the amount the department demanded from the
employer within twenty (20) days from the date of the written notification by
certified mail will, by such failure, authorize the department to invoke
immediately its statutory authority to seek a court order requiring cessation
of all business or activities of the employer failing to post the bonds.
Section 5. Change in Amount of
Bond. The department may at any time increase or decrease the amount of any
bond that has been posted.
6. Monthly Returns and Payment. Any out-of-state or delinquent
employer may be required to file monthly withholding tax returns and to
accompany the monthly returns with a complete payment of all taxes withheld
during the month covered by the return.
7. Court Jurisdiction. The department may initiate action seeking
a court order, requiring cessation of all business operation or activity of any
employer failing to comply with this administrative regulation, in the Franklin
Circuit Court or in any other circuit court which may have jurisdiction over
the area in which the employer resides, or in which some or all of the
employer's business is conducted, or having jurisdiction of the area in which
property of the employer is located. The department may institute legal action
in accordance with any provision of this administrative regulation.