Taxpayer Funds Held in Trust Act
1. Congress finds:
(a). Numerous taxing agencies in the United States, including the Internal Revenue Service and the California Franchise Tax Board, have developed a lucrative side-business of using the U.S. Mails to receive deposits that weak or unwary taxpayers regard as being made in trust only to find out later that the agency waits until the expiration of some statute of limitation and then appropriates those funds without notice or the opportunity to be heard despite the belief by these taxpayers that they have properly claimed carryovers of those funds.
(b). Various taxing agencies in the United States, such as California's Franchise Tax Board, have adopted the practice of selectiively using some information available to them and ignoring other information to make assessments, conveyed by U.S. Mail, with the result that the assessments are radically larger than they know the taxpayer owes, and thereafter backing up such assessments with force or fear to ensure they are collected.
(c). Funds wrongfully taken by these two methods have accumulated into the billions of dollars.
2. To remedy this misbehavior Congress enacts this "Taxpayer Funds Held in Trust Act":
(a) Any funds received on deposit against taxes or carried over to any year after January 1, 2000 by any taxing agency in the United States, that the agency knows or has any reason to suspect are not in payment of any tax but are received in deposit against taxation, that remains unclaimed at the running of any statute of limitation for such claim, shall be regarded by that agency as being held in trust and not forfeit and shall be turned over to the escheat funds agency in the state that is the last known state of residency of the depositor or payor for subsequent refund to such depositor or payor without limit to time.
(b) Any funds received or taken through an assessment by any taxing agency in the United States where the agency knows or has any reason to suspect is in excess of the tax that would be owed without using an assessment, shall be handled as in section 2(a) above.