Session of 1998
                   
SENATE BILL No. 442
         
By Committee on Assessment and Taxation
         
1-15
            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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  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 trea-
  3       surer 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