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Tax Amnesty

Tax Amnesty. California Society of Enrolled Agents September 17, 2004. Tax Amnesty.

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Tax Amnesty

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  1. Tax Amnesty California Society of Enrolled Agents September 17, 2004

  2. Tax Amnesty Tax amnesty is a limited-time opportunity for individuals and businesses to pay past-due income, franchise, sales or use taxes, and the related interest - avoiding most of the associated penalties and fees, and criminal prosecution.

  3. Revenue Estimates2004-05millions

  4. December 2004/January 2005 Public Education Media Campaign FTB Amnesty Mailings – 2.4 Million Direct Mailings

  5. Allowed Participants PIT and Corp Nonfilers Accounts Receivable Bankruptcy Audit/Protest/Appeal Settlement Excluded Taxpayers/Transactions Those under criminal investigation or prosecution on tax-related matters. Abusive tax shelter transactions Amnesty Eligible Universe

  6. General Amnesty Information • File an application February 1, 2005 - March 31, 2005. • Postmarked by April 1, 2005, due to holiday. • Most penalties and fees waived for taxable years 2002 and older. • Within 60 days of the conclusion of the amnesty period, May 31, 2005: • Underreporters and nonfilers must file returns. • Pay in full taxes and interest or initiate an installment/payment agreement. • Final payment on an installment/payment agreement due by June 30, 2006 (amnesty years only).

  7. General Amnesty Information • No refunds allowed on taxpayer balances paid prior to amnesty. • Taxpayers waive their rights to claims for refund or credit for amounts paid in connection with amnesty.

  8. Probation Period Must remain compliant for 2005 and 2006 FTB will revoke amnesty, reinstate the penalties and fees, and assess the new amnesty penalty for the failure to pay any amount of tax, including penalties and fees, for the 2005 or 2006 taxable years.

  9. Amnesty Penalty • Penalty equal to: • 50% of the post-amnesty unpaid interest amount on any tax year eligible for amnesty. • 50% of the unpaid interest subsequently assessed on deficiency amounts. • Penalty would not apply to a taxpayer that: • Initiates and is compliant with an installment/payment agreement under amnesty. • Has an existing (“grandfathered”) installment agreement and does not participate in amnesty (PIT only).

  10. Accuracy Related Penalty Increase • An increase in the penalty for a taxable year eligible for amnesty from 20% to 40% of the understatement for any assessment issued post amnesty. • Increase does not apply to: • A taxpayer in audit, protest, appeal, settlement, or litigation as of the start of amnesty. • Understatements relating to tax shelter items.

  11. Tax Professional Services • FTB Amnesty Mailings - Copy to Power of Attorney • Practitioner Hotline • Amnesty Application provided to CTPs • Tax News Articles • Special Fax Number • 60 Day Extension to File and Pay • BOE and FTB Amnesty Portal www.taxes.ca.gov

  12. Where can I obtain the latest information? www.ftb.ca.gov

  13. Services on FTB Amnesty Website • Information for Tax Professionals • Amnesty Application - pdf form • Tax Forms/Tax Rate Schedules • Balance & Payment Options • Amnesty PIT Installment Agreement • Amnesty Tax Balance Calculator • FAQs in English & Spanish • Payment Options

  14. Questions?

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