2000 Minnesota Statutes

     297E.08 Examinations. 

    Subdivision 1.    Examination of taxpayer.  To determine 
 the accuracy of a return or report, or in fixing liability under 
 this chapter, the commissioner may make reasonable examinations 
 or investigations of a taxpayer's place of business, tangible 
 personal property, equipment, computer systems and facilities, 
 pertinent books, records, papers, vouchers, computer printouts, 
 accounts, and documents.  

    Subd. 2.    Access to records of other persons in 
 connection with examination of taxpayer.  When conducting an 
 investigation or an audit of a taxpayer, the commissioner may 
 examine, except where privileged by law, the relevant records 
 and files of a person, business, institution, financial 
 institution, state agency, agency of the United States 
 government, or agency of another state where permitted by 
 statute, agreement, or reciprocity.  The commissioner may compel 
 production of these records by subpoena.  A subpoena may be 
 served directly by the commissioner. 

    Subd. 3.    Power to compel testimony.  In the 
 administration of this chapter, the commissioner may:  

    (1) administer oaths or affirmations and compel by subpoena 
 the attendance of witnesses, testimony, and the production of a 
 person's pertinent books, records, papers, or other data; 

    (2) examine under oath or affirmation any person regarding 
 the business of a taxpayer concerning a matter relevant to the 
 administration of this chapter.  The fees of witnesses required 
 by the commissioner to attend a hearing are equal to those 
 allowed to witnesses appearing before courts of this state.  The 
 fees must be paid in the manner provided for the payment of 
 other expenses incident to the administration of state tax law; 
 and 

    (3) in addition to other remedies available, bring an 
 action in equity by the state against a taxpayer for an 
 injunction ordering the taxpayer to file a complete and proper 
 return or amended return.  The district courts of this state 
 have jurisdiction over the action, and disobedience of an 
 injunction issued under this clause must be punished as for 
 contempt.  

    Subd. 4.    Third-party subpoena where taxpayer's identity 
 is known.  An investigation may extend to any person that the 
 commissioner determines has access to information that may be 
 relevant to the examination or investigation.  If a subpoena 
 requiring the production of records under subdivision 2 is 
 served on a third-party record keeper, written notice of the 
 subpoena must be mailed to the taxpayer and to any other person 
 who is identified in the subpoena.  The notices must be given 
 within three days of the day on which the subpoena is served.  
 Notice to the taxpayer required by this section is sufficient if 
 it is mailed to the last address on record with the commissioner 
 of revenue. 

    The provisions of this subdivision relating to notice to 
 the taxpayer or other parties identified in the subpoena do not 
 apply if there is reasonable cause to believe that the giving of 
 notice may lead to attempts to conceal, destroy, or alter 
 records relevant to the examination, to prevent the 
 communication of information from other persons through 
 intimidation, bribery, or collusion, or to flee to avoid 
 prosecution, testifying, or production of records. 

    Subd. 5.    Third-party subpoena where taxpayer's identity 
 is not known.  A subpoena that does not identify the person or 
 persons whose tax liability is being investigated may be served 
 only if:  

    (1) the subpoena relates to the investigation of a 
 particular person or ascertainable group or class of persons; 

    (2) there is a reasonable basis for believing that the 
 person or group or class of persons may fail or may have failed 
 to comply with tax laws administered by the commissioner of 
 revenue; 

    (3) the subpoena is clear and specific concerning 
 information sought to be obtained; and 

    (4) the information sought to be obtained is limited solely 
 to the scope of the investigation. 

    A party served with a subpoena that does not identify the 
 person or persons with respect to whose tax liability the 
 subpoena is issued may, within three days after service of the 
 subpoena, petition the district court in the judicial district 
 in which that party is located for a determination whether the 
 commissioner of revenue has complied with all the requirements 
 in clauses (1) to (4), and whether the subpoena is enforceable.  
 If no petition is made by the party served within the time 
 prescribed, the subpoena has the effect of a court order.  

    Subd. 6.    Request by taxpayer for subpoena.  If the 
 commissioner has the power to issue a subpoena for investigative 
 or auditing purposes, the commissioner shall honor a reasonable 
 request by the taxpayer to issue a subpoena on the taxpayer's 
 behalf in connection with the investigation or audit.  

    Subd. 7.    Application to court for enforcement of 
 subpoena.  The commissioner or the taxpayer may apply to the 
 district court of the county of the taxpayer's residence, place 
 of business, or county where the subpoena can be served as with 
 any other case at law, for an order compelling the appearance of 
 the subpoenaed witness or the production of the subpoenaed 
 records.  Failure to comply with the order of the court for the 
 appearance of a witness or the production of records may be 
 punished by the court as for contempt.  

    Subd. 8.    Cost of production of records.  The cost of 
 producing records of a third party required by a subpoena must 
 be paid by the taxpayer if the taxpayer requests the subpoena to 
 be issued or if the taxpayer has the records available but has 
 refused to provide them to the commissioner.  In other cases 
 where the taxpayer cannot produce records and the commissioner 
 then issues a subpoena for third-party records, the commissioner 
 shall pay the reasonable cost of producing the records.  The 
 commissioner may later assess the reasonable costs against the 
 taxpayer if the records contribute to the determination of an 
 assessment of tax against the taxpayer.  

    HIST: 1994 c 633 art 2 s 9