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OFFICE OF TAX AND REVENUE
NOTICE OF FINAL RULEMAKING
The Office of Tax and Revenue (OTR), pursuant to the authority set forth in section 201(a) of the 2005 District of Columbia Omnibus Authorization Act, approved October 16, 2006 (120 Stat. 2019; P.L. 109-356, D.C. Official Code § 1-204.24d(10) (2011 Supp.)) of the Home Rule Act, and the Office of the Chief Financial Officer Financial Management and Control Order No. 00-5, effective June 7, 2000, hereby gives notice of this final action to create a new chapter 42, General Administration, to title 9 of the District of Columbia Municipal Regulations (DCMR).
The authority for Declaratory Orders became effective on October 21, 1968, in the District of Columbia Administrative Procedure Act, (Pub. L.90-614; 82 Stat 1207), which allows the Mayor or any agency to issue a declaratory order. The declaratory order provisions were incorporated into the Administrative Procedures statutes, chapter 5 of title 2 of the District of Columbia Official Code. See D.C. Official Code §§ 2-501, et seq. (2011 Repl.). A declaratory order is a method for the Office of Tax and Revenue to terminate a controversy or to remove uncertainty with respect to the applicability of any rule or regulation under the tax chapters of title 47.
The rules were previously published as proposed rulemaking in the D.C. Register on February 10, 2012, at 59 DCR 1127. The Agency did not receive any comments on the proposed rulemaking and no substantive changes were made to the proposed rules. OTR adopted the rules as final on March 20, 2012. These rules will take effect immediately upon publication of this notice in the D.C. Register.
Title 9, TAXATION AND ASSESSMENTS, of the DCMR is amended by adding a new chapter 42 to read as follows:
Chapter 42 GENERAL ADMINISTRATION
4200 DECLARATORY ORDERS: PURPOSE, GENERAL RULE, AND DEFINITIONS
4200.1 Pursuant to D.C. Official Code § 2-508 (2011 Repl.), on petition of any interested person, the Chief Financial Officer may issue a declaratory order with respect to the applicability of any rule, regulation, Council act or resolution, or statute administered by the Office of Tax and Revenue, to terminate a controversy (other than a contested case) or remove an uncertainly.
4200.2 A petition for a declaratory order shall be filed in writing, clearly marked to indicate that it is being filed pursuant to this regulation. The petition shall:
(a) Contain a detailed statement of the facts on which the petition is based;
(b) Set forth fully the statutes, regulations, or judicial decisions relevant to the issue;
(c) Pose the question of whether, and in what manner, the statutes, regulations, or judicial decisions apply to the petitioner under the facts outlined in the petition; and
(d) Contain a statement describing the interest of the petitioner in making the request for the declaratory order.
4200.3The description shall:
(a) Include a statement as to whether the declaratory order sought is intended to affect the tax consequences of any transaction or transactions entered into or contemplated by the petitioner, its vendors, customers, clients, or any other person upon whose request or upon whose behalf the declaratory order is sought, the taxability of which is known by the petitioner to be the subject of an inquiry, audit, refund, or assessment proceeding by the Office of Tax and Revenue; and
(b) Contain an explanation of the circumstances surrounding the inquiry, audit, refund, or assessment proceedings, if any.
4200.4 The Chief Financial Officer shall consider the petition and may, at the Chief Financial Officer’s discretion, issue the declaratory order requested. This determination to issue an order or not issue an order will be promptly communicated to the practitioner. The Chief Financial Officer may require argument on the petition. A declaratory order issued by the Chief Financial Officer shall be in writing and plainly state that it is a declaratory order issued pursuant to this chapter. A written answer from the Office of Tax and Revenue to an inquiry from a taxpayer may not be construed to be a declaratory order unless made in conformity with this regulation.
4200.5 A declaratory order shall be binding between the Chief Financial Officer and the petitioner on the stated facts alleged, unless such order is altered or set aside by a court. The declaratory order shall be binding as to a transaction:
(a) Entered into before the date of the declaratory order; or
(b) In reliance upon the declaratory order, unless a change in the legal basis of the declaratory order is made by statute, regulation, or judicial decision after the issuance of the declaratory order and before any affected transaction.
4200.6 The Chief Financial Officer will publish declaratory orders of general interest, subject to the protection of the identity of the petitioner and confidential information contained in the declaratory order. The requestor of the declaratory order may submit a redacted version of the order within thirty (30) days of the date of the declaratory order.
4200.7 With prospective effect only, a declaratory order may be revoked, altered, or amended by the Chief Financial Officer at any time by written notice to the petitioner, and if the revocation, alteration, or amendment would concern an order that has been published, such revocation, alteration, or amendment shall also be published promptly.
