The power of authoritative tax guidance: Why Senate File 783 is a game changer for Minnesota
February 10, 2025 | Geno Fragnito
Authoritative guidance from tax administrators is an integral part of ensuring taxpayer and tax preparer compliance with tax laws.
I recently testified on
Senate File 783, which is part of the
MNCPA 2025 legislative agenda. This bill highlights the importance of private letter ruling (PLR) and would create such a program in Minnesota. A PLR would provide the necessary guidance for taxpayers to determine the correct tax liability and align with the Minnesota Department of Revenue's vision statement, "Everyone reports, pays, and receives the right amount: no more, no less."
SF 783 would offer significant benefits to both taxpayers and the state. It would allow taxpayers to seek guidance on specific tax situations before filing, reduce uncertainty and reduce potential errors. This approach is much more efficient and cost-effective for all parties involved, while helping to prevent disputes and audits that might arise from misinterpretation of complex tax laws.
Sen. Carla Nelson is one of the authors of the bill.
“This bill is about fairness and transparency,” Nelson said at last week’s
Senate Taxes Committee hearing. “I often hear from my constituents that our tax system is too complicated and confusing. We still have work to do to address that, but in the meantime, people should be able to ask the state how a tax law applies to them and get a clear, reliable answer.”
A private letter ruling program would bring Minnesota in line with 48 other states and the federal government, which already has some form of authoritative official guidance. This alignment would also provide a more predictable tax environment and may help attract businesses and investment to the state.
With a private letter ruling, taxpayers can file with confidence, knowing how the DOR will apply the law to their specific circumstances. This certainty not only promotes voluntary compliance but also enhances the overall fairness and efficiency of the tax system.
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Topics: Taxation-Individual, Government, Taxation-Business
Geno Fragnito
Geno Fragnito is the MNCPA government relations director, advocating on behalf of the CPA profession. His days consist of last-minute meeting changes, building relationships with lawmakers, helping CPAs navigate state government, and putting in more than 15,000 steps per day walking the halls of the Capitol. Geno unwinds with a little golf and traveling with his family. If he weren’t a lobbyist, Geno would perfect his cast and be a professional fisherman. Geno can be reached at 952-885-5550 or gfragnito@mncpa.org.
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