On November 1, the Kentucky Supreme Court affirmed the appellate court’s January 13, 2017, decision in Department of Revenue v. Sommer, which held that the Department must publish redacted final rulings, including those that were not appealed to the Kentucky Board of Tax Appeals (now the Kentucky Claims Commission). Final rulings are rulings of the Department after a taxpayer protests a determination made by the Department (e.g., tax assessment, denial of refund, etc.).
Attorney Mark Sommer of Frost Brown Todd, represented by Jennifer Barber, also of Frost Brown Todd, filed a petition in the Franklin Circuit Court in 2013 asking that all final rulings (both appealed and not appealed) be published by the Department. The court agreed, but the Department appealed the part of the ruling that required the disclosure of redacted final rulings not appealed to the Board of Tax Appeals. The Department argued that redacting the rulings would be difficult without disclosing taxpayer information. In its decision, the Court of Appeals sided with Sommer, stating that the reasoning and analysis of the Department could be made available to the public without jeopardizing the privacy interests of taxpayers.
The Kentucky Society of CPAs applauds the Supreme Court ruling. KyCPA has long been a proponent of more transparency in the administration of our tax laws, and this decision strikes the appropriate balance between taxpayer privacy and taxpayer rights. Taxpayers and the public will now have a greater understanding of how state tax laws are interpreted and enforced, improving compliance and reducing unnecessary disputes. KyCPA appreciates the current administration’s commitment to transparency, and urges the Department to publish all final rulings on its website.