With Governor Bevin taking office in December 2015, one can expect changes in the administration of Kentucky taxes, at the Department of Revenue and at the Board of Tax Appeals. This is because new administrations inevitably put their stamp on these agencies, in one way or another. While there is no crystal ball to look into, the following represent some predictions for 2016.
New Tax Commissioner? Nearly every new Governor appoints a new Revenue Commissioner, and Governor Bevin did so on December 14, 2015. The Governor appointed Dan Bork, CPA, a former tax executive at Lexmark. It will be interesting to see how tax administration will change in Kentucky as a result of this new appointment.
New Faces at Revenue? One can anticipate that there will be a few new faces at Revenue, generally at the highest levels, as many of these are non-merit positions. Many of the current administrators at Revenue have extensive experience; so, many may stay. Again, it will be interesting to see the approach that the new administration will take.
Elevation of Revenue to a Cabinet Level Agency? Past Governors have experimented with Revenue as a department-level agency and as a cabinet-level agency. There are obviously advantages and disadvantages to each. When it has been a cabinet-level agency, Revenue has had more discretion as to resolution of issues, if only because an additional level of approval was not necessary to resolve a matter, i.e. the Finance and Administration Cabinet.
More Resources at Revenue? Revenue has had a lot on its plate. It often takes longer than one would like to resolve a matter, although I have seen progress. Perhaps, the new administration will invest in additional resources at Revenue to assist taxpayers, CPAs and other tax practitioners in resolving tax matters for themselves, their companies and clients.
More Regulations and Guidance? CPAs and other tax practitioners have been clamoring for guidance. Revenue did away with the old policies and circulars, which many found useful. Revenue promulgated quite a few new regulations in 2005 and 2006. But, many of these have not been updated and additional guidance that can be relied upon is needed. Hopefully, we will see more administrative guidance provided by Revenue.
Resolutions of Pending Cases? Fresh faces mean new looks. So, perhaps with the new administration, matters that could not previously have been resolved can be.
New Faces at Kentucky Board of Tax Appeals? The Kentucky Board of Tax Appeals has the difficult job of sorting out matters that could not be resolved by Revenue and taxpayers. Most new Governors, eventually, appoint new board members to the KBTA. So, one can expect some changes at the KBTA as well.
One thing is certain. Things will change at Revenue and the KBTA. Whether the changes are tweaks or significant, is yet to be seen.
This is a modified version of Mark A. Loyd’s regular column, Tax in the Bluegrass, “Kentucky Tax Administration – Changes on the Horizon” which appeared in Issue 6 2015 of the Kentucky CPA Journal.