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AB 1424 (Stats. 2011, Chapter 455) is a comprehensive bill directed at the 500 largest state tax delinquents who owe over $100,000. AB 1424 enacted new Business and Professions Code section 494.5, effective July 1, 2012. Section 494.5 provides for denying a license to or suspending the professional, occupational or driver’s license of a taxpayer who is among the 500 largest state tax delinquencies. The State Bar, its members and applicants for admission are covered by AB 1424.
Section 494.5 contains notice and timeline provisions; conditions for reinstatement and re-suspension; and a process by which a tax payer may submit a challenge to the Franchise Tax Board or State Board of Equalization if the taxpayer contests being named on the lists.
Since the Supreme Court of California has inherent authority and power over admissions, discipline and regulation of attorneys in California, a new California Rule of Court and State Bar rule to authorize suspension provided by Business and Professions Code Section 494.5, as well as an amendment to existing State Bar rule 4.15 to add compliance with tax obligations as an admission requirement, are proposed.
A recommendation including proposed Rules of Court and State Bar Rules was approved by the Board in 2012. After receiving feedback from the Supreme Court, the agenda item linked below describes specific amendments to that recommendation. The revised proposal includes:
1) a new rule of court 9.24 2) a new State Bar rule 2.36 for suspension of tax delinquents, together with renumbering existing rules 2.36 and 2.37 and 3) an amendment of existing State Bar rule 4.15 to add compliance with tax obligations as an eligibility requirement for admission.
Regulation, Admissions and Discipline Committee – May 9, 2013 – Agenda Item Attachment 1 – Proposed New California Rule of Court 9.24 Attachment 2 – Proposed Additions and Amendments to State Bar Membership Rules Attachment 3 – Proposed Additions and Amendments to State Bar Admissions Rules