Estate tax information 

2-281 1994 Opinions OAG 94-058 OPINION NO. 94-058 Syllabus: 1. In accordance with Sub. S.B. 128, 120th Gen. A. (1994) (eff. Jan. 18, 1994), a township clerk is authorized to have access to estate tax returns or other records or information made confidential by RC. 5731.90 in connection with the duties and responsibilities of the clerk. (1992 Op. Att'y Gen. No. 92-076 overruled on the basis of legislative change.) 2. In accordance with RC. 321.341, RC. 5731.49, and RC. 5731.90, a county treasurer who reports the collection of estate tax to a township clerk is permitted to reveal the identity of the taxpayer to the township clerk in the course of making that report. 3. When a county treasurer, a township clerk, or any other official referenced in RC. 5731.90(A)(I) is in possession of any estate tax returns or other estate tax records or information, the material or information is confidential and may not be disclosed except as provided by statute. To: R. Alan Corbin, Brown County Prosecuting Attorney, Georgetown, Ohio By: Lee Fisher, Attorney General, August 30, 1994 You have requested an opinion concerning R C. 5731.90 and the confidentiality of estate tax information. Your specific question is whether, when the county treasurer reports the collection of estate tax to the township clerk, the treasurer is permitted to reveal the identity of the taxpayer. 1992 Op. Att'y Gen. No. 92-076 discussed the confidentiality provisions of R C. 5731.90 and concluded that a township clerk had no right of access to estate tax information made confidential by RC. 5731.90. Since the issuance of Op. No. 92-076, however, RC. 5731.90 has been amended, see Sub. S.B. 128, 120th Gen. A. (1994) (eff. Jan. 18, 1994), and your question must be considered in light of the amended language. Confidentiality Under R.C. 5731.90 RC. 5731.90 establishes the confidentiality of estate tax I1~turns, generation-skipping tax returns, and other tax returns filed pursuant to RC. Chapter 5731, all documents and other records that pertain to the determination of a decedent's taxable estate that is the subject of one of those returns, and the amount of taxes paid or payable in connection with such an estate. The statute states that, except as provided in division (A)(2), to the extent that any of such material or information is "in the possession of a probate court, the department of taxation, a county auditor or county treasurer, the fiscal officer ofa municipal corporation or township, the attorney general, or other authorized person" as specified in R C. Chapter 5731, the material and its contents are coilfidential, are not subject to inspection or copying as public records under RC. 149.43, and may be inspected or copied by members of the general public only upon order of September 1994 OAG 94-058 Attorney General 2-282 a probate court for good cause shown. RC. 5731.90(A)(I) (emphasis added). RC. 5731.90(A)(2) specifics that the provisions of RC. 5731.90(A)(I) do not preclude the inspection, copying, and use of the confidential information: by the tax commissioner, county auditors and treasurers, fiscal officers of municipal corporations or townships, probate judges, the attorney general, and other authom-ed persons as specified in [R.C. Chapter 5731], in connection with their duties and responsibilities as described in [R.C. Chapter 5731], including, but not limited to, the determination and collection of an estate, generation­ skipping or other tax .... RC. 5731. 90(A) (2) (a) (emphasis added). No person may permit the inspection or copying of documents or records made confidential by R C. 573l.90 or divulge the amount of the tax or other information in the documents or records except as provided in RC. 5731.90(A). RC. 573l.90(B). Exceptions to the confidentiality provisions of RC. 5731.90 apply to certain estate tax information contained in a certificate that is available to the public, see RC. 5731.21(A)(5), .90(A)(2)(c); Op. No. 92-076 at 2-320, and in other circumstances specified by statute, see RC. 573l.90(A)(2)(b), (d). Sub. S.B. 128 added to RC. 5731.90(A)(l) and (2) the references to fiscal officers of municipal corporations or townships, thereby indicating that when estate tax material or information is in the possession of such fiscal officers, the material or information is confidential, and also indicating that the fiscal officers may inspect, copy, and use the material or information in connection with their duties and responsibilities as described in RC. Chapter 5731. The title of Sub. S.B. 128 states as one of the purposes of the legisl.ation: "to provide municipal and township fiscal officers access to estate tax records." Since the township clerk is the fiscal officer of a township, see RC. 507.07, .11(B); RC. 5705.01(D), it is evident that the General Assembly intended that township clerks should have access to any material or information concerning estate tax that is relevant to their duties and responsibilities. Collection and Distribution of Estate Tax Estate taxes are collected as provided in RC. Chapter 5731. When an estate tax return is filed with the probate court, the court forwards a copy to tlle Tax Commissioner and notifies the county auditor, who certifies a duplicate of the charge to the county treasurer for collection. RC. 5731.21(A), .23. The Tax Commissioner determines the correctness of the return and notifies the person filing the return of any adjustments. RC. 5731.26, .27, .30. Under Ohio law, a percentage of the proceeds of tax from each estate is for the use of the municipal corporation or township in which the tax originates. R.C. 573l.48; see also Ohio Const. art. XII, §9. In the case of a township, the board of township trustees may determine whether estate tax proceeds are credited to the general revenue fund of the township or to the board of education of the school district of which the township is a part. RC.5731.48(C). The remainder of the estate tax, after the deduction of fees and costs, is paid to the state. RC. 5731.48. When the property transferred is real estate or tangible personal property within Ohio, the tax is deemed to have originated in the municipal corporation or township in which the property is physically located. If real estate is located in more than one municipal corporation or township, the tax is apportioned between the municipal corporations or townships in which it is located in the proportions in which the tract is assessed for general property taxation. RC. 2-283 1994 Opinions OAG 94-058 5731.50. Tax on the transfer of intangible property or tangible personal property outside the state from a resident of the state is deemed to have originated in the municipal corporation or township in which the decedent was domiciled. Tax on the transfer of the intangible property of a nonresident is deemed to have originated where the property was in custody or where the depository had its principal place of business or place of residence. RC. 5731.51. Thus there will be instances in which it is necessary to allocate estate taxes among townships and municipal corporations and in which issues of proper allocation may arise. See Op. No. 92-076. When the county treasurer receives payment for any taxes due underRC. Chapter 5731, he is required to notify the taxing authority of the township or municipal corporation entitled to share in the proceeds. RC. 321.341. The statute states that the notice "shall identify the estate for which the tax was paid and the portion of the estate's total tax credited to that subdivision in the undivided estate tax fund." Id. The fiscal officer of the township -- that is, the township clerk -- is authorized to request payment to the township of an amount not to exceed seventy-five percent of the taxes to the credit of the township. Id. The county treasurer is required to keep accounts of all taxes and interest received under RC. Chapter 5731. Twice each year, the county treasurer settles with the county auditor for that money, showing for which estate the money was paid, by whom, and when. R.C.5731.46. At each semiannual settlement, the county auditor makes settlement of the amount due to each municipal corporation or township, within or outside the county. The amount so due "shall be paid upon the warrant of the county auditor to the county treasurer or other proper officer of such municipal corporation or township." R.C. 5731.49. In the case of a township, the clerk is the fiscal officer with authority to receive such payment. Statutory provision is made for adjustments of refunds chargeable against a municipal corporation or township. Id. Authority of a Township Clerk to Have Access to Estate Tax Material or Information Made Confidential by R.C. 5731.90 As noted in the foregoing discussion, there are two statutes relating to estate taxes that directly involve a township clerk. The frrst is RC. 321.341, which states: Immediately upon receipt of payment for any taxes due under Chapter 5731. of the Revised Code, the county treasurer shall notify the taxing authority ofthe township or municipal corporation entitled to share in the procr.::eds thereof. The notice shall identify the estate for which the tax was paid and the ponion of the estate's total tax credited to that subdivision in the undivided estate taxjund. At any time prior to a seU1ement under section 5731.46 ofthe Revised Code, the fiscal officer of a municipal corporation or a township may request the county auditor to make payment to such subdivision from the jund ofan amount not to exceed seventy-five per cent oftaxes paid into suchjund and standing to the credit of the subdivision, including both taxes with respect to which a fmal determination has been made under section 5731.27 of the Revised Code and taxes subject to review and fmal determination under section 5731.26 of the Revised Code. Within five days of the receipt of such request the auditor shall draw a warrant in such amount upon such fund, payable to the subdivision. (Emphasis added.) The undivided estate tax fund is a fund within the county treasury that holds estate tax proceeds. See RC. 319.14, 321.08. RC. 321.341 requires the county treasurer to notify a township when the treasurer receives estate taxes that are credited to the township. Notice is to be made to the September 1994 OAG 94-058 Attorney General 2-284 taxing authority of the township, which is the board oftownship trustees. See R.C. 5705.01(C); note 1, infra. The township clerk is given authority to request the county auditor to make payment prior to settlement of up to seventy-five percent of the taxes credited to the subdivision. The statute does not specify that notice of the treasurer's receipt 9f estate taxes credited to the township must be made to the township clerk, but it is clear that the clerk must receive that information in order to be able to request payment prior to settlement. The other statute giving a township clerk responsibilities with respect to estate taxes is RC. 5731.49, which provides that, at each semiannual settlement, amounts of estate taxes due to a township shall be paid to the proper officer of the township. As the fiscal officer of the township, the township clerk is responsible for accepting estate tax revenues for the township. In Op. No. 92-076, it was concluded that the township clerk was given no statutory responsibility for determining the amount of estate tax proceeds that should be credited to the township and that the clerk had no statutory duties or responsibilities that required access to material or information made confidential by RC. 5731.90. The General Assembly's amendment of RC. 5731.90 to reference the fiscal officer of the township, without any amendment of RC. 321.341 or other provisions establishing the township clerk's duties, indicates that the General As:;embly construes existing statutes as giving the township clerk duties and responsibilities that require access to material or information made confidential by R.C. 5731.90. Consequently, it is appropriate to construe the township clerk's authority to receive estate tax proceeds pursuant to RC. 321.341 and RC. 5731.49 as encompassing also the right to be infonned of the estate for which the taxes are paid and the portion of the estate's total tax credited to the township in order to ascertain that the township is receiving the amount of taxes to which it is entitled. A township clerk's authority to have access to estate tax material and infonnation thus follows by necessary implication from the clerk's duty to receive estate taxes on behalf of the township. For the reasons discussed above, Op. No. 92-076 is overruled, and it is concluded that, in accordance with current law, a township clerk is authorized to have access to estate tax returns or other records or information made confidential by R C. 5731.90 in connection with the duties and responsibilities of the clerk relating to the receipt of estate taxes on behalf of the township. This conclusion does not mean that a township clerk has a right of access to all material and infonnation encompassed by RC. 5731.90. Instead, the right of access extends only to that material or infonnation that is reasonably necessary for the perfonnance of the duties and responsibilities of the township clerk. See generally, e.g., Collins v. Ferguson, 48 Ohio App. 2d 255,357 N.E.2d 51 (Franklin County 1976) (denying the Auditor of State access to confidential records of the Department of Taxation because there was no demonstration that the records were needed for a purpose establisherl by statute). Authority or a County Treasurer to Reveal the Identity or a Taxpayer to a Township Clerk You have asked specifically whether a county treasurer who reports to a township clerk that estate tax has been collected may reveal the identity of the taxpayer to the township clerk in the course of making that report. As discussed above, the recent amendments to R.C. 5731.90 indicate that the township clerk is permitted to know the identity of such a taxpayer and that such infonnation is confidential when in the possession of a township clerk. R C. 5731.9O(A)(1) lists the various types of estate tax mat~rials and information that are confidential when in the posSf~ssion of various officials, including township clerks and county 2-285 1994 Opinions OAG 94-058 treasurers. R.C. 5731.90(A)(2)(a) provides that division (A)(I) does not preclude the use of those materials and infonnation by the various officials, including township clerks and county treasurers, "in connection with their duties and responsibilities as described in [R.C. Chapter 5731]." R.C. 5731.90(B) prohibits the disclosure of estate tax materials or infonnation, including the amount of taxes paid or payable, except as provided in R.C. 5731.90(A). The authority of a county treasurer to provide a township clerk with notice of estate tax payments at each semiannual settlement is granted by R.C. 5731.49 and is clearly covered by R.C. 5731.90(A)(2)(a). In contrast, the authority of a county treasurer to provide a township clerk with notice of estate tax payments prior to settlement so that the clerk may request llayment to the township at that time arises under R.C. 321.341, rather than under the provisions of R.C. Chapter 5731, and it might be argued that such disclosure is not permitted under R.C. 5731.90(A)(2)(a). See R.C. 5731.90(B). If such an argument were accepted, it would lead to the result that a township clerk could receive infonnation conet.,:;' the payer of estate taxes and the portion of estate taxes credited to the township at the senllil1'".al settlement but not prior to that date; such a result would serve no useful purpose and woul.] .lIupede the performance of the clerk's duties under R.C. 321.341. The more reasonable argument ill this instance is that the duties of a township clerk under R.C. 321.341 are so related to the clerk's duties under R.C. 5731.49 that the provisions of R.C. 5731.90(A)(2)(a) are applicable to both sets of duties. See R.C. 5731.90(B). Your question assumes that the county treasurer gives the township clerk notice of the amount of estate tax credited to the township. 1 Such notice is clearly permitted pursuant to R. C. 5731.49 at each semiannual settlement, and the authority to give such notice may be implied from the provisic,Lls of R.C. 321.341, for it is clear that the township clerk must receive that information in order to request payment prior to settlement. The identity of the taxpayer is incidental to the amount of the tax paid, and knowledge of both is required for a township clerk to carry out the responsibility of determining that estate taxes are properly allocated, a responsibility that the General Assembly recognized in enacting Sub. S.B. 128. Further, the township clerk's knowledge of the identity of the taxpayer is made confidential pursuant to R. C. 5731.90(A)(I), and the provisions of R.C. 5731.90 permit the county treasurer to disclose to a township clerk estate tax information that is needed in connection with the clerk's duties. Accordingly, it is concluded that a county treasurer who reports the collection of estate tax to a township clerk is permitted, in accordance with R.C. 321.341, R.C. 5731.49, and R.C. 5731.90, to reveal the identity of the taxpayer to the township clerk in the course of making that report. Confidentiality of &tate Tax Materials al1.d Infonnatfon A refusal to extend access to estate tax materials beyond those officials clearly referenced in R.C. 5731.90(A) is required by the tenns of R.C. 5731.90. That statute prohibits the R.C. 321.341 provides for notice ~o be made to the taxing authority -- that is, the board of township trustees -- rather than to the township clerk. Township trustees are not named in R.C. 5731.90(A) as officials in whose hands estate tax materials and infonnation are confidential or as officials who are entitled to use such materials and infonnation in connection with duties and responsibilities under R.C. Chapter 5731, and R.C. 5731.90(B) precludes the disclosure of estate tax materials or information except as provided in division (A). Thus, the language of R.C. 321.341 providing that estate tax information be give~ to township trustees raises questions concerning the application of R.C. 5731.90 in such circumstances. Township trustees are, September 1994 1 GAG 94-059 Attorney General 2-286 disclosure of estate tax returns or other records or infonnation made confidential by R C. 5731.90 except as provided in RC. 5731.90(A). Any such material or infonnation that is in the possession of a county treasurer, a township clerk, or any other official referenced in RC. 5731.90(A)(l) is confidential and may not be disclosed except as provided by statute. Conclusion For the reasons discussed above, it is my opinion, and you are advised, as follows: 1. In accordance with Sub. S.B. 128, 120th Gen. A. (1994) (eff. Jan. 18, 1994), a township clerk is authorized to have access to f..:state tax returns or other recor<ls or information made confidential oy RC. 5731.90 in connection with the duties and responsibilities of the clerk. (1992 Gp. Att'y Gen. No. 92-076 overruled on the basis of legislative change.) 2. In accordance with RC. 321.341, RC. 5731.49, and R.C. 5731.90, a county treasurer who reports the collection of estate tax to a township clerk is permitted to reveal the identity of the taxpayer to the township clerk in the cou:se of making that report. 3. When a county treasurer, a township clerk, or any other official referenced in RC. 573 t .90(A)(1) is in possession of any estate tax returns or other estate tax records or infonnation, the material or information is confid~ntial and may not be disclose<! except as provided by statute. however, given authority by R C. 5731.48 to detennine whether estate tax proceeds are credited to the general revenue fund of the township or to the board of education of the school district of which the township is a part. For that purpose, the township trustees are persons authorized to possess estate tax information as specified in R.C. Chapter 5731 and "re subject to the confidentiality provisions of RC. 5731.90. See RC. 5731.90(A). If R.C. 321.341 and R.C. 5731.48 are read together, it may be argued that the notification required by R.C. 321.341 enables the trustees to perform their duties under R.C. 5731.48, so that the provisions of R.C. 5731.90 are applicable to actions taken under both provisions. This opinion does not address that argument in detail because you have nut asked whether township trustees have any right of access to materials or information made confidential by R.C. 5731.90, or whether the county treasurer has authority to (J=,sclose any such materials or infonnation to township trustees.