Session of 1998
HOUSE BILL No. 2610
By Representatives Shore and Carmody
1-12
9
AN ACT relating to taxation; enacting the
Kansas estate tax act; amending
10 K.S.A. 79-1541a,
79-1541b, 79-1542, 79-1564, 79-1569, 79-1570, 79-
11 1571, 79-1572,
79-1574, 79-1575, 79-1576, 79-1579, 79-1580 and 79-
12 1587 and repealing the
existing sections; also repealing K.S.A. 79-1537,
13 79-1537b, 79-1537c,
79-1537e, 79-1537f, 79-1538, 79-1538a, 79-1539,
14 79-1540, 79-1541,
79-1542a, 79-1543, 79-1545, 79-1547, 79-1548,
15 79-1549, 79-1550,
79-1551, 79-1552, 79-1553, 79-1554, 79-1555, 79-
16 1556, 79-1557,
79-1557a, 79-1559, 79-1560, 79-1561, 79-1562, 79-
17 1563, 79-1563a,
79-1565, 79-1566, 79-1567, 79-1567a, 79-1568,
18 79-1573, 79-1584,
79-1584a, 79-1584b, 79-1584c, 79-1585 and 79-
19 1586.
20
21 Be it enacted by the Legislature of the
State of Kansas:
22 New Section 1. (a) A tax is
hereby imposed on the estate of every
23 resident decedent, and every nonresident
decedent who died holding an
24 interest in property with a Kansas tax
situs, whose estate is required by
25 federal law to file a return for federal
state taxes. The amount of such tax
26 shall be equal to the amount of the maximum
credit allowed by section
27 2011 of the internal revenue code against
the tax that would otherwise
28 be imposed on the transfer of the estate of
the decedent by section 2001
29 of the internal revenue code.
30 (b) When the estate of a
resident decedent shall consist of property
31 within and without the state, or in the
case of the estate of a nonresident
32 decedent who died holding an interest in
property with a Kansas tax situs,
33 the tax imposed under subsection (a) shall
be the percentage thereof that
34 the gross estate for federal estate tax
purposes less the value of all property
35 included therein having a tax situs which
is not within the jurisdiction of
36 the state of Kansas, bears to the total
gross estate for federal estate tax
37 purposes.
38 Sec. 2. K.S.A. 79-1541a is
hereby amended to read as follows: 79-
39 1541a. Whenever the amount of the tax
imposed upon a generation-skip-
40 ping transfer by section 2601 of the
internal revenue code is determined,
41 a tax, equal to the maximum amount of the
credit allowed against such
42 tax by section 2604 of the internal revenue
code, is hereby imposed upon
43 the taxable estate of the decedent as of
the date of such determination.
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1 The tax imposed under the
provisions of this act shall be chargeable
2 against the interests of each
beneficiary in proportion to the share re-
3 ceived by each beneficiary
under such transfer.
4 Sec. 3. K.S.A. 79-1541b
is hereby amended to read as follows: 79-
5 1541b. When the property transferred
subject to the tax imposed by
6 K.S.A. 79-1541a shall consist of
both property within and property with-
7 out the state, the tax imposed shall
be the percentage that the Kansas
8 assets of the generation-skipping
trust or generation-skipping trust equiv-
9 alent bears to the total assets of
the generation-skipping trust or gener-
10 ation-skipping trust equivalent.
11 Sec. 4. K.S.A. 79-1542 is
hereby amended to read as follows: 79-
12 1542. As used in this act unless the
context otherwise requires:
13 (a) Any term used in this act
shall have the same meaning as when
14 used in a comparable context in the
internal revenue code. Any reference
15 in this act to the ``internal revenue
code'' shall mean the provisions of the
16 United States internal revenue code of
1986, as such code exists on De-
17 cember 31, 1992
1997. Any reference in this act to a specific provision
of
18 the internal revenue code shall be to such
provision as it exists on De-
19 cember 31, 1992
1997.
20 (b) ``Deemed executor''
includes any person in actual or constructive
21 possession of any property of the
decedent.
22 (c) ``Director'' means the
director of taxation.
23 (d) ``Distributee''
means a beneficiary, legatee, devisee, heir, next of
24 kin, grantee, donee, vendee, joint
tenant or any other successor in inter-
25 est, whether outright or in
trust.
26 (e) ``Distributive
share'' or ``distributive shares'' means the share or
27 shares of the distributive estate
passing to a distributee or distributees.
28 (f)
(d) ``Domicile'' refers to that place where a person
resides, has an
29 intention to remain and to which they
intend to return following any
30 absence.
31 (g)
(e) ``Estate'' and ``property'' shall mean the real,
personal and
32 mixed property or interest therein of the
testator, intestate, grantor, bar-
33 gainor, vendor or donor which shall pass or
be transferred to legatees,
34 devisees, heirs, next of kin, grantees,
donees, vendees, or successors and
35 shall include all personal property within
or without the state.
36 (h)
(f) ``Executor'' and ``administrator'' mean the duly
appointed,
37 qualified and acting executor or
administrator of the decedent in this
38 state.
39 (i)
(g) ``Nonresident decedent'' means a decedent who was not a
res-
40 ident decedent at the time of death.
41 (j)
(h) ``Personal representative'' means the executor,
administrator
42 or deemed executor of the decedent.
43 (k)
(i) ``Resident decedent'' means a decedent who was domiciled
in
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1 this state at the time of death.
2 (l)
(j) ``Secretary'' means the secretary of revenue, or the
secretary's
3 designee.
4 (m)
(k) ``Tax'' includes tax, penalty and interest, unless the
context of
5 a particular section otherwise
requires.
6 (n)
(l) ``Transfer'' shall include the passing of property or
any interest
7 therein in possession or enjoyment,
present or future, by inheritance,
8 descent, devise, succession, bequest,
grant, deed, bargain, sale, gift or
9 appointment in the manner herein
prescribed.
10 Sec. 5. K.S.A. 79-1564 is
hereby amended to read as follows: 79-
11 1564. (a) Except as hereinafter
provided, the executor or administrator
12 of the estate of every decedent
whose death gives rise to a tax liability
13 under the provisions of this act,
within nine months following the death
14 of the decedent, shall make
and The personal representative of every
15 estate subject to the tax imposed by
section 1 who is required by federal
16 law to file a return for federal estate
taxes shall file in the office of the
17 director a return on forms prepared and
furnished by the secretary to-
18 gether with a copy of the federal estate
tax return on or before the date
19 the federal estate tax return is
required to be filed.
20 (b) In those estates
in which no executor or administrator has been
21 appointed, the deemed executor
shall make and file such return. In the
22 event there is more than one deemed
executor, all deemed executors
23 shall be jointly responsible for
completing and filing one return reporting
24 all of the assets of the estate
except as hereinafter provided.
25 (c) If, after
exercising due diligence, the personal representative
mak-
26 ing and filing such return is
unable to make a complete return as to any
27 part of the gross estate of the
decedent, such personal representative shall
28 make and file a return reporting
all information as to the estate assets,
29 including a description thereof and
the name of any person holding a
30 legal or beneficial interest in the
assets to the best of such personal rep-
31 resentative's
knowledge.
32 (d)
(b) The taxes imposed under the provisions of this act shall
be
33 paid at the expiration of nine
months after the death of the decedent.
34 Such taxes shall be payable from
the assets of the estate or proceeds
35 therefrom, in order, so far as
practicable, that each distributive share of
36 the estate shall bear a just and
equitable proportion of such taxes unless
37 otherwise directed by the will of
the decedent or trust agreement by the
38 personal representative to the director
not later than the date of the filing
39 of the return.
40 (1) The executor or
administrator of the estate of every decedent who
41 is required to file a return shall
pay to the director all taxes imposed under
42 this act. In the event the tax
imposed against the shares of the decedent's
43 estate exceeds the value of the
assets or the proceeds therefrom which
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1 were in the custody or
control of the executor or administrator, the ex-
2 ecutor or administrator shall
pay the tax imposed to the extent of the
3 value of the amount or the
proceeds therefrom within such executor's or
4 administrator's custody or
control and the balance of the taxes may be
5 stayed upon application to
and approval by the director. Such application
6 shall be made at the time the
return is filed upon forms prescribed by
7 the secretary. Upon approval
of such application payment of the taxes
8 shall be stayed for a period
not to exceed one year and the executor or
9 administrator shall have a
right to proceed against the individual distri-
10 butee or distributees receiving
such taxable shares and may perfect a lien
11 therefor under the provisions of
K.S.A. 79-1569, and amendments
12 thereto.
13 (2) Except as
hereinafter provided, the deemed executor or deemed
14 executors of the estate of every
decedent who are required to file a return
15 shall pay to the director all of
the taxes imposed by this act. To the extent
16 that all deemed executors do not
join in the filing of the return, the
17 deemed executors who jointly file
shall pay only that portion of the taxes
18 representing the aggregate tax
liability imposed upon the distributive
19 shares of those so
filing.
20 (3) Where an asset
not within the custody or control of a personal
21 representative gives rise to a tax
liability and such personal representative
22 is required to pay such tax or has
voluntarily paid such tax from the assets
23 within such personal
representative's custody or control, the personal rep-
24 resentative shall have a right to
proceed against the individual distributee
25 receiving such share and may
perfect a lien therefor under the provisions
26 of K.S.A. 79-1569, and amendments
thereto. For the purpose of this
27 paragraph: (1) With respect to the
tax liability caused without consider-
28 ation of K.S.A. 79-1539 or 79-1540,
and amendments thereto, the per-
29 sonal representative shall be
entitled to recover from the distributee the
30 amount by which the total tax
liability of the decedent's estate resulting
31 from such assets outside the
control of the personal representative and
32 received by the distributee exceeds
the total tax liability which would have
33 been payable if the value of such
property had not been included in the
34 decedent's gross estate; and (2)
with respect to any additional tax liability
35 resulting from the application of
K.S.A. 79-1539 or 79-1540, and amend-
36 ments thereto, the personal
representative shall be entitled to recover
37 from the distributee that portion
of the total tax liability caused by such
38 application equal to the ratio that
the value of such assets outside the
39 control of the personal
representative received by the distributee bears
40 to the total value of such assets
outside the control of the personal rep-
41 resentative.
42 (4) Whenever the
personal representative is required to pay the taxes
43 imposed upon an asset not within
the personal representative's custody
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1 or control and pays the taxes
imposed thereon from assets or proceeds
2 therefrom of the estate
within the personal representative's custody or
3 control and thereafter fails
to collect the taxes attributable to the distrib-
4 utive shares of the
decedent's estate which were not within the personal
5 representative's custody or
control, the personal representative shall be
6 entitled to a refund of the
taxes attributable to such shares which were
7 paid from assets or proceeds
therefrom within the personal representa-
8 tive's custody or control
upon application to the director. The application
9 for refund shall be filed on
forms prescribed by the secretary within the
10 time allowed for refunds pursuant
to K.S.A. 79-1574, and amendments
11 thereto. Upon being satisfied that
the personal representative has exer-
12 cised due diligence in attempting
to recover the taxes attributable to the
13 distributive shares of the
decedent's estate which were not within such
14 personal representative's custody
or control, the director shall refund the
15 same.
16 (5) The director
shall issue a receipt acknowledging payment of such
17 taxes whenever the taxes as shown
to be due on the return or any addi-
18 tional taxes assessed by the
director have been paid by a personal rep-
19 resentative and (A) such executor
or administrator has requested a cash
20 receipt in order to be subrogated
to the state's right to proceed in col-
21 lecting the tax against a
distributee; or (B) such executor or administrator
22 has received a stay of payment from
the director. Such a receipt shall be
23 issued only under circumstances
described in clauses (A) or (B) of this
24 subsection and shall not constitute
evidence that a final determination of
25 taxes pursuant to K.S.A. 79-1571,
and amendments thereto, has been
26 made.
27 (e)
(c) If the taxes contemplated by this act are not paid when
due,
28 interest at the rate prescribed by K.S.A.
79-2968(b), and amendments
29 thereto, shall be charged and collected
commencing at the time the same
30 become payable. When the filing of
the return is delayed beyond nine
31 months after the death of the
decedent and the director finds that such
32 delay was due to the inability of
the personal representative to determine
33 the distributive shares of an
estate or the proper recipients thereof, or to
34 litigation, interest shall commence
at the time the return is filed.
35 (f) At the election
of the personal representative, the taxes imposed
36 by this act may be determined by
the director. Such election shall be
37 made by filing a return disclosing
all information necessary for the de-
38 termination of the taxes imposed by
this act. Upon receipt of all necessary
39 information, the director shall
determine the taxes due and owing and
40 shall notify the personal
representative of the tax liability by registered or
41 certified mail. Notwithstanding any
election made pursuant to this sec-
42 tion, the taxes shall be due and
payable at the same time and in the same
43 manner as if the taxes had been
determined by the personal represen-
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1 tative. If the election
pursuant to this subsection is made before the ex-
2 piration of the nine-month
period after the death of the decedent, interest
3 shall be charged and
collected commencing 10 days after notice of the
4 tax liability has been
received by the personal representative, or at the
5 expiration of the nine-month
period after the decedent's death, whichever
6 is later. If the election
pursuant to this subsection is not timely made and
7 the director shall find that
the delay was not due to the circumstances set
8 forth in subsection (e),
interest shall be charged and collected commenc-
9 ing at the expiration of the
nine-month period after the decedent's death.
10 Sec. 6. K.S.A. 79-1569 is
hereby amended to read as follows: 79-
11 1569. (a) Subject to the provisions
of subsection (b), Property of which a
12 decedent died seized or possessed, subject
to the taxes imposed by this
13 act, in whatever form of investment it may
happen to be shall be charged
14 with a lien for all taxes, penalty
and interest thereon which are or may
15 become due on such property; but the lien
shall not affect any property
16 after it has been sold or disposed of for
value by the executors or admin-
17 istrators in accordance with law,
and no consent to transfer issued by the
18 director shall be required to
release such lien, but in all such cases a lien
19 shall attach to the proceeds realized from
any such sale or other dispo-
20 sition for all taxes and interest thereon
which are or may be due on such
21 property. That portion of the decedent's
property which is used for the
22 payment of charges against the estate and
expenses of its administration,
23 allowed by any court having jurisdiction
thereof, shall be divested of such
24 lien. The lien on any property subject to
the ;nheritance tax act by virtue
25 of the provisions of this subsection shall
be divested after 10 years from
26 the date of the decedent's death.
27 (b) If the taxes
imposed under this act are not paid when due, the
28 spouse, transferee, surviving
tenant, person in possession of the property
29 by reason of the exercise,
nonexercise, or release of a power of appoint-
30 ment, or beneficiary, who receives,
or has on the date of the decedent's
31 death, property included in the
gross estate under K.S.A. 79-1548 through
32 79-1553 and 79-1555 through
79-1557, and amendments thereto, to the
33 extent of the value of such
property at the time of the decedent's death
34 shall be personally liable for such
tax. Any part of such property trans-
35 ferred by, or transferred by a
transferee of, such spouse, transferee, trus-
36 tee, surviving tenant, person in
possession, or beneficiary to a purchaser
37 or holder of a security interest
shall be divested of the lien provided for
38 in subsection (a) and a similar
lien shall then attach to all the property of
39 such spouse, transferee, trustee,
surviving tenant, person in possession,
40 beneficiary or transferee of any
such person, except any part transferred
41 to a purchaser or a holder of a
security interest.
42 (c) Upon issuance of
a receipt for taxes paid pursuant to subsection
43 (d)(5) of K.S.A. 79-1564 and
amendments thereto to a personal repre-
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1 sentative who has paid the
taxes imposed by this act or an approved
2 application for stay filed
pursuant to subsection (d)(1) of K.S.A. 79-1564
3 and amendments thereto, the
personal representative shall be subrogated
4 to the right to proceed
against any real or personal property in which a
5 distributee has an interest
which the state might have had. The issuance
6 of a receipt for taxes paid
by the director after payment of the taxes or
7 approved application for stay
shall be deemed an assignment by the state
8 to the personal
representative of the right to proceed against the real
and
9 personal property in which a
distributee has an interest and shall be con-
10 clusive evidence thereof. A right
to proceed shall arise and a lien shall be
11 perfected to aid the personal
representative in the right to proceed against
12 property of a distributee only if
the personal representative files a notice
13 of lien with the register of deeds.
The lien shall be effective only against
14 property of a distributee located
in the county where the notice of lien is
15 filed. Such notice of lien may be
filed in any county wherein any real or
16 personal property in which the
distributee has an interest is located. The
17 notice of lien shall be made on
forms prescribed by the secretary. Upon
18 satisfaction of the lien, a release
shall be issued by such personal repre-
19 sentative on forms prescribed by
the secretary.
20 (d) If the personal
representative has requested and received a re-
21 fund of taxes paid pursuant to
subsection (d)(4) of K.S.A. 79-1564, and
22 amendments thereto, or whenever the
personal representative fails to
23 collect the tax pursuant to
subsection (d)(4) of K.S.A. 79-1564, and
24 amendments thereto, or is not
required to pay the tax imposed by this
25 act or the taxes imposed by this
act are not paid at the expiration of nine
26 months after the death of the
decedent,
27 (b) If the personal
representative fails to timely pay the tax imposed
28 by section 1, the director shall
enforce the director's lien by the issuance
29 of a warrant under the director's hand and
official seal, directed to the
30 sheriff of any county of the state,
commanding such sheriff to levy upon
31 and sell the real and personal property of
the distributee estate found
32 within the sheriff's county for the payment
of the amount thereof, with
33 the added interest and the cost of
executing the warrant, and to return
34 such warrant to the director and pay to the
director the money collected
35 by virtue thereof not more than 60 days
from the date of the warrant.
36 The sheriff shall within five days after
the receipt of the warrant, file with
37 the clerk of the district court of the
sheriff's county a copy thereof, and
38 thereupon the clerk shall enter in the
appearance docket in appropriate
39 columns, the name of the
distributee estate named in the warrant,
the
40 amount of the tax or portion thereof and
interest for which the warrant
41 is issued and the date such copy is filed.
The amount of such warrant so
42 docketed shall thereupon become a lien upon
the title to, and interest in,
43 the real property of the
distributee estate against whom it is
issued in the
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1 same manner, as a judgment duly
docketed in the office of such clerk.
2 The sheriff shall proceed in the same
manner and with like effect as
3 prescribed by law with respect to
executions issued against property upon
4 judgments of a court of record, and
shall be entitled to the same fees for
5 the sheriff's services to be
collected in the same manner.
6 The court in which the
warrant is docketed shall have jurisdiction over
7 all subsequent proceedings as fully
as though a judgment had been ren-
8 dered in the court. In the discretion
of the director, a warrant of like
9 terms, force and effect may be issued
and directed to any officer or em-
10 ployee of the director, and in the
execution thereof such officer or em-
11 ployee shall have all the powers conferred
by laws upon sheriffs, and the
12 subsequent proceedings thereunder shall be
the same as provided where
13 the warrant is issued directly to the
sheriff. The distributee estate shall
14 have the right to redeem the real estate
within a period of 18 months
15 from the date of such sale. If a warrant be
returned, unsatisfied in full,
16 the director shall have the same remedies
to enforce the claim for taxes
17 as if the state of Kansas had recovered
judgment against the distributee
18 for the amount of the tax. No law exempting
any goods and chattels, land
19 and tenements from forced sale under
execution shall apply to a levy and
20 sale under any such warrants or upon any
execution issued upon any
21 judgment rendered in any action for
inheritance taxes. The director shall
22 have the right at any time after the
warrant has been returned unsatisfied
23 or satisfied only in part, to issue alias
warrants until the full amount of
24 the tax is collected.
25 Sec. 7. K.S.A. 79-1570 is
hereby amended to read as follows: 79-
26 1570. No final account of a personal
representative shall be allowed by
27 the district court unless such account
shows, and the judge of such court
28 finds, that all taxes imposed by the
provisions of this act upon any property
29 or interest therein belonging to the estate
to be settled by such account
30 and already payable have been paid, and
that all taxes which may become
31 due on such estate have been paid or
settled as hereinbefore provided,
32 or that the payment thereof to the
state is secured by bond.
33 Sec. 8. K.S.A. 79-1571 is
hereby amended to read as follows: 79-
34 1571. (a) As soon as practicable after the
return is filed and the taxes paid,
35 the director shall issue a closing letter.
Such closing letter shall be issued
36 upon the director being satisfied that
there has been a final determination
37 of all taxes due and that all such taxes
have been paid. The director shall
38 issue such closing letter to the personal
representative, and when the
39 estate is involved in probate proceedings
before a district court, a copy
40 of such closing letter shall be forwarded
to the judge of such court for
41 recording in full in the journal of such
court.
42 (b) In the event that
all deemed executors do not join in the filing of
43 a return, or in the event the
personal representative is unable to make a
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1 complete return as to any
part of the gross estate of the decedent, upon
2 the director being satisfied
that a final determination of the taxes due on
3 that portion of the estate
reported has been made and all taxes due
4 thereon have been paid, the
director shall issue a closing letter as to that
5 portion of the gross estate
which has actually been reported.
6 (c) The closing
letter shall be applicable only to assets reported in
the
7 return filed with the
director. To the extent the gross assets of the de-
8 cedent were reported, the
issuance of a closing letter shall be conclusive
9 evidence that all taxes have
been determined and paid and shall release
10 any lien which attached to the
decedent's property and that of any
11 deemed executor or distributee
unless such lien has been subrogated,
12 assigned and perfected pursuant to
K.S.A. 79-1569, and amendments
13 thereto. The closing letter may
contain a legal description of the real
14 property so reported.
15 (d) Release
of the lien imposed by K.S.A. 79-1569, and amendments
16 thereto, may be provided by filing notice
of release in the office of the
17 register of deeds in any county where any
such real property included in
18 the gross estate is located or, when the
estate is involved in proceedings
19 before the district court, with the court.
Any such notice of release shall
20 be in such form as prescribed by the
secretary and may include use of or
21 reference to the closing letter issued by
the director or may be included
22 as part of that closing letter.
23 Sec. 9. K.S.A. 79-1572 is
hereby amended to read as follows: 79-
24 1572. (a) Assets belonging to the estate of
a deceased nonresident, other
25 than intangible assets of a decedent who at
the time of death resided in
26 the United States but outside this state,
shall not be delivered or trans-
27 ferred to a foreign personal representative
of such decedent without serv-
28 ing notice upon the director of taxation of
the time and place of such
29 intended delivery or transfer at least
seven days before the time of such
30 delivery or transfer. The director or the
director's representative may
31 examine such assets prior to the time of
such delivery or transfer. Failure
32 to serve such notice or to allow such
examination or the making of a
33 delivery or transfer of such assets against
the objection of the director
34 shall render the person, association, or
corporation making the delivery
35 or transfer liable for the payment of the
tax and interest due upon such
36 assets, in an action brought by the
department of revenue in the name
37 of the state.
38 (b) A foreign or Kansas
person, corporation, partnership or other as-
39 sociation of persons may release or
transfer intangible assets of a nonres-
40 ident decedent upon receipt of a sworn
affidavit from the personal rep-
41 resentative of the decedent's estate,
stating that the decedent was not a
42 resident of the state of Kansas at the time
of the decedent's death but
43 that such decedent was a resident of
another state in the United States.
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10
1 Sec. 10. K.S.A. 79-1574
is hereby amended to read as follows: 79-
2 1574. (a) Except as otherwise
provided in this section, the amount of any
3 tax imposed by this act shall be
assessed within three years after the return
4 or affidavit was
filed, whether or not such return was filed on or after the
5 date prescribed, or the tax as shown
to be due on such return was paid,
6 whichever is the later date, and no
proceedings in court for the collection
7 of such taxes shall be begun after
the expiration of such period. Where
8 the assessment of any
;nheritance tax imposed under this act has
been
9 made within the period of limitation
properly applicable thereto, such tax
10 may be collected by distraint or by a
proceeding in court, but only if
11 begun within one year after the period of
limitation as provided in this
12 act. The foregoing provisions of
this section shall not apply in those cases
13 where the time for the payment of
the tax has been extended pursuant
14 to K.S.A. 79-1544 or 79-1567, and
amendments thereto. In those cases
15 where the director has retained
jurisdiction over the estate pursuant to
16 K.S.A. 79-1544, and amendments
thereto, assessment of taxes or pro-
17 ceedings to collect taxes must be
made or commenced within three years
18 after notice of the death of the
life tenant. In those cases where a bond
19 has been given guaranteeing the
payment of the tax pursuant to K.S.A.
20 79-1567, and amendments thereto,
assessment of taxes or proceedings
21 for collection of the tax must be
made or commenced within three years
22 after the date of the expiration of
the last bond so given.
23 (b) For the purposes of this
section, a return of tax required under
24 this act filed before the last day
prescribed by law shall be deemed to be
25 filed on such last day and any tax shown to
be due on such return and
26 paid before the last day prescribed by law
shall be deemed to be paid on
27 such last day.
28 (c) In the case of a false or
fraudulent return or affidavit with intent
29 to evade tax or in the case of failure to
file a return, the tax may be
30 assessed, or a proceeding in court for
collection of such tax may be begun
31 at any time. If the personal
representative omits from the gross estate
32 items includable in such gross
estate as exceed 25% of the gross estate
33 stated in the return or affidavit,
the tax may be assessed or a proceeding
34 in court for collection of such tax
may be begun at any time within six
35 years after the return or affidavit
was filed. In determining the items
36 omitted from the gross estate,
there shall not be taken into account any
37 item which is omitted from the
gross estate if such item is disclosed in
38 the return or affidavit, or in a
statement attached to the return or affidavit,
39 in a manner adequate to apprise the
director of the nature and amount
40 of such item.
41 (d) No refund or credit shall
be allowed by the director after three
42 years from the date the return was filed,
or one year after an assessment
43 is made, whichever is the later date,
unless before the expiration of such
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1 period a claim therefor is filed by
the personal representative.
2 (e) In case a personal
representative has made claim for a refund,
3 such personal representative shall
have the right to commence a suit for
4 the recovery of the same at the
expiration of six months after the filing
5 of the claim for refund, if no action
has been taken by the director.
6 (f) Any personal
representative of an estate of a decedent who has
7 been notified of any adjustment by
the internal revenue service shall
8 notify the director within 90 days of
the date such adjustment is agreed
9 to or becomes final between the
estate and the internal revenue service.
10 Such adjustments shall be reported by
filing an amended return and a
11 copy of the revenue agent's report
detailing such adjustments, along with
12 any other statements or documents as may be
necessary to explain and
13 support the
adjustments.:
14 (1) Notwithstanding the
provisions of subsections (a) or (d), addi-
15 tional tax may be assessed and proceedings
in court for collection of such
16 taxes may be commenced and any refund or
credit may be allowed by
17 the director of taxation within 180 days
following receipt of any such
18 report of adjustments by the Kansas
department of revenue. No assess-
19 ment shall be made nor shall any refund or
credit be allowed under the
20 provisions of this paragraph except to the
extent the same is attributable
21 to changes in the estate due to adjustments
indicated by such report.
22 (2) In the event of failure
to comply with the provisions of this sub-
23 section, the statute of limitations shall
be tolled.
24 Sec. 11. K.S.A. 79-1575 is
hereby amended to read as follows: 79-
25 1575. As soon as practicable after the
return or affidavit is filed, the di-
26 rector shall make an examination thereof
and shall issue final determi-
27 nations of tax liability hereunder in the
manner prescribed by K.S.A.
28 79-3226, and amendments thereto. If the tax
found due is less than the
29 amount paid, the excess paid shall be
refunded to the personal represen-
30 tative who paid the tax, except that no
refund of $25 or less shall be made.
31 If the tax found due shall be greater than
the amount previously paid, or
32 if a claim for a refund is denied, notice
shall be mailed to the person
33 filing the return by registered or
certified mail. An order finding addi-
34 tional tax shall be accompanied by a notice
and demand for payment. The
35 tax shall be paid within 30 days
thereafter, together with interest on the
36 additional tax from the date the tax was
due unless an appeal is taken in
37 the manner provided by K.S.A. 74-2438, and
amendments thereto. No
38 additional tax shall be assessed for less
than $25.
39 Sec. 12. K.S.A. 79-1576 is
hereby amended to read as follows: 79-
40 1576. Subject to the right of any personal
representative to apply for
41 review as provided for in this act, the
director shall hear and determine
42 all questions relative to such tax. The
attorney for the director, at the
43 request of the director, shall represent
the state in any court proceedings
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1 brought to review any action of the
director. If any district court shall
2 find that any such tax remains due
and that proper proceedings have not
3 been taken before the director for
abatement thereof, it shall order the
4 personal representative to pay the
same, with interest, and costs, and no
5 question regarding the validity of
such tax shall be heard in such court.
6 If it appears that there are no goods
or assets of the estate in the personal
7 representative's hands, the court may
assess the amount of the tax against
8 the personal representative, as if
for the personal representative's own
9 debt, and may enforce compliance with
such order; but the personal
10 representatives shall be personally liable
only for such taxes as shall be
11 payable while they continue in such offices
or have custody or control of
12 decedent's property. In the cases
where the tax is due and payable by and
13 collectible from the distributee,
all actions shall be prosecuted by the
14 attorney for the director in the
name of the state, and such actions may
15 be brought in the same courts as
other actions for money.
16 Sec. 13. K.S.A. 79-1579 is
hereby amended to read as follows: 79-
17 1579. A refund clearing fund, designated
;nheritance estate tax abatement
18 refund, not to exceed $50,000 shall be set
apart and maintained by the
19 director of taxation from
;nheritance estate tax collections and held
by the
20 state treasurer for the prompt payment of
all abatements and refunds. If
21 the director of taxation finds that a claim
for refund duly filed by a per-
22 sonal representative ;µrsuant
to K.S.A. 79-1564(d)(4), 79-1574(d) or
23 79-1575, and amendments
thereto, should be allowed, or if a court upon
24 a final judgment shall find that the
;nheritance estate tax, penalty or
in-
25 terest paid by a personal representative is
in excess of the amount legally
26 due, then the director of taxation shall
issue the director's vouchers to
27 the director of accounts and reports for
the refund to the personal rep-
28 resentative of such tax, penalty or
interest together with interest provided
29 for hereinafter. Upon receipt of such
voucher properly executed and en-
30 dorsed, the director of accounts and
reports shall issue the director's
31 warrants to the state treasurer for the
payment to the personal represen-
32 tative out of the
;nheritance estate tax abatement refund
fund. The di-
33 rector of taxation shall file a duplicate
of such voucher and also a state-
34 ment which shall set forth the reasons why
such abatement or refund was
35 allowed. Upon the allowance of an abatement
or refund of any tax or
36 interest paid, interest shall be allowed
and paid on the amount of such
37 abatement or refund at the rate of 12% per
annum from the date such
38 tax, penalty or interest was paid to
the date the refund or abatement of
39 ;nheritance estate
taxes is made. No refunds in an amount of less
than
40 $25 shall be made.
41 Sec. 14. K.S.A. 79-1580 is
hereby amended to read as follows: 79-
42 1580. (a) The director of taxation shall
fix and charge an amount pursuant
43 to K.S.A. 45-218 and 45-219, and amendments
thereto for furnishing
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1 certified copies of returns
or affidavits.
2 (b) All fees collected
hereunder shall be remitted to the state treas-
3 urer at least monthly. Upon receipt
of each such remittance, the state
4 treasurer shall deposit the entire
amount thereof in the state treasury and
5 the same shall be credited to the
state general fund.
6 Sec. 15. K.S.A. 79-1587
is hereby amended to read as follows: 79-
7 1587. (a) All reports and returns
required under the provisions of the
8 Kansas ;nheritance
estate tax act shall be preserved for three years and
9 thereafter until the director of
taxation orders them to be destroyed.
10 (b) Except in accordance with
proper judicial order, or as provided
11 in subsection (c) of this section,
subsection (g) of K.S.A. 17-7511, and
12 amendments thereto, or 46-1106, and
amendments thereto, it shall be
13 unlawful for the director of taxation, or
any deputy, agent, clerk or other
14 officer, employee or former employee of the
department of revenue or
15 any other state officer or employee or
former state officer or employee
16 to divulge, or to make known in any way,
the value of any estate or any
17 particulars set forth or disclosed in any
report, return, federal return or
18 federal return information required under
the provisions of the Kansas
19 ;nheritance estate
tax act; and it shall be unlawful for the director of
20 taxation, any deputy, agent, clerk or other
officer or employee of the
21 department of revenue engaged in the
administration of the Kansas ;n-
22 heritance estate
tax act to engage in the business or profession of tax
23 accounting or to accept employment, with or
without consideration, from
24 any person, firm or corporation for the
purpose, directly or indirectly, of
25 preparing tax returns or reports required
by the laws of the state of Kan-
26 sas, by any other state or by the United
States government, or to accept
27 any employment for the purpose of advising,
preparing material or data,
28 or the auditing of books or records to be
used in an effort to defeat or
29 cancel any tax or part thereof that has
been assessed by the state of Kan-
30 sas, any other state or by the United
States government.
31 (c) Nothing herein shall be
construed to prohibit the publication of
32 statistics, so classified as to prevent the
identification of particular reports
33 or returns and the items thereof, or the
inspection of returns by the
34 attorney general or other legal
representatives of the state. Nothing in
35 this section shall prohibit the post
auditor from access to all ;nheritance
36 estate tax reports or returns in
accordance with and subject to the pro-
37 visions of subsection (g) of K.S.A.
46-1106, and amendments thereto.
38 Nothing in this section shall be construed
to prohibit the disclosure of
39 the taxpayer's name, social security
number, last known address and total
40 tax liability, including penalty and
interest, from ;nheritance estate tax
41 returns to a debt collection agency
contracting with the secretary of rev-
42 enue pursuant to K.S.A. 75-5140 to 75-5143,
inclusive, and amendments
43 thereto. Any person receiving any
information under the provisions of this
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1 subsection shall be subject to the
confidentiality provisions of subsection
2 (b) of this section
and to the penalty provisions of subsection (d) of
this
3 section.
4 (d) Any violation of
subsections (b) or (c) of this section shall be
a
5 class B misdemeanor; and if the
offender be an officer or employee of
6 the state, such officer or employee
shall be dismissed from office.
7 (e) Notwithstanding the
provisions of this section, the secretary of
8 revenue may permit the commissioner
of internal revenue of the United
9 States, or the proper official of any
state imposing an inheritance or estate
10 tax, or the authorized representative of
either, to inspect the ;nheritance
11 estate tax returns made under the
provisions of the Kansas ;nheritance
12 estate tax act and the secretary of
revenue may make available or furnish
13 to the taxing officials of any other state
or the commissioner of internal
14 revenue of the United States or other
taxing officials of the federal gov-
15 ernment, or their authorized
representatives, information contained in
16 inheritance tax reports or returns or any
audit thereof or the report of
17 any investigation made with respect
thereto, filed pursuant to the Kansas
18 ;nheritance estate
tax act, as the secretary may consider proper, but such
19 information shall not be used for any other
purpose than that of the
20 administration of tax laws of such state,
the state of Kansas or of the
21 United States.
22 (f) Notwithstanding the
provisions of this section, the ;nheritance
es-
23 tate tax return filed with respect
to the estate of a decedent shall, upon
24 written request, be open to inspection by
or disclosure to: (1) The ad-
25 ministrator, executor or trustee of such
decedent's estate,; and (2) any
26 heir at law, next of kin or beneficiary
under the will of such decedent or
27 a donee or distributee of the decedent's
property, but only if the secretary
28 of revenue finds that such heir at law,
next of kin, beneficiary, donee or
29 distributee has a material interest which
will be affected by information
30 contained therein.
31 New Sec. 16. This act and the
provisions of article 15 of chapter 79
32 of the Kansas Statutes Annotated not
repealed by this act shall be known
33 and may be cited as the Kansas estate tax
act.
34 New Sec. 17. The provisions
of this act shall be applicable to the
35 estates of all decedents dying after July
1, 1998. The provisions of article
36 15 of chapter 79 of the Kansas Statutes
Annotated in effect immediately
37 before the effective date of this act shall
be applicable to the estates of
38 all decedents dying before July 1,
1998.
39 Sec. 18. K.S.A. 79-1537,
79-1537b, 79-1537c, 79-1537e, 79-1537f,
40 79-1538, 79-1538a, 79-1539, 79-1540,
79-1541, 79-1541a, 79-1541b, 79-
41 1542, 79-1542a, 79-1543, 79-1545, 79-1547,
79-1548, 79-1549, 79-1550,
42 79-1551, 79-1552, 79-1553, 79-1554,
79-1555, 79-1556, 79-1557, 79-
43 1557a, 79-1559, 79-1560, 79-1561, 79-1562,
79-1563, 79-1563a, 79-1564,
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1 79-1565, 79-1566, 79-1567, 79-1567a,
79-1568, 79-1569, 79-1570, 79-
2 1571, 79-1572, 79-1573, 79-1574,
79-1575, 79-1576, 79-1579, 79-1580,
3 79-1584, 79-1584a, 79-1584b,
79-1584c, 79-1585, 79-1586 and 79-1587
4 are hereby repealed.
5 Sec. 19. This act shall
take effect and be in force from and after its
6 publication in the statute book.
7