AN ACT TO AMEND TITLE 30 OF THE DELAWARE CODE RELATING TO TAX ADMINISTRATION.

Section 1 of this Act clarifies that subcontractors are obligated to ensure the secrecy of tax returns and tax information. Section 2 of this Act provides that all employees of the Department of Finance with access to Federal Tax Information shall be subject to appropriate background checks to ensure that the Department of Finance complies with obligations imposed by Section 6103(p)(4) of the Internal Revenue Code and by the Internal Revenue Service in Publication 1075. Sections 3 and 4 of this Act authorize the Director of Revenue to require electronic filing and allow the Director to assess penalties of up to $50 if a taxpayer fails to file a return in the manner prescribed by law. The Division of Revenue processes numerous business returns, a large percentage of which are already being filed electronically. By requiring that certain types of business returns be electronically filed, the Division of Revenue will be able to focus its paper document processing efforts on individuals and small business returns. It is anticipated that the Director of the Division of Revenue will promulgate guidance regarding electronic filing after consulting with tax professionals and the business community, to ensure that those required to file electronically have the means and sophistication to do so. Further, the Director of Revenue has broad discretion to abate penalties and will exercise his discretion to do so in connection with the transition to mandatory electronic filing.