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Item
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 /Date |
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OTHER ISSUES
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| 76. |
Is qualified property listed on the subsequent income tax return? Check the subsequent year's depreciation schedule or fixed assets schedule to see if the qualified property is listed. If not, the taxpayer may be subject to the recapture provisions. See the next item. |
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| 77. | If the asset(s) is not listed on the
depreciation or fixed asset schedule, did you write the taxpayer and
ask for a detailed explanation on the disposition of the asset, including
the date of disposition?
Note: If the asset is removed from this state, used in a nonqualified activity or disposed of to an unrelated party within one year from the date it was placed in service in California, the credit claimed on that item of property is subject to recapture. |
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| 78. | Did the qualified taxpayer transfer
or allocate the MIC to an affiliated taxpayer, corporation or a member
of a unitary group?
Note: A qualified taxpayer that places qualified property in service and properly generates a MIC may not allocate the credit to an affiliated corporation. A corporation that is a member of a unitary group may not allocate, share, or otherwise transfer the credit to any other member of the unitary group. Each taxpayer, who claims a MIC, must qualify independently for each aspect of the credit in order to claim the credit. |
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| 79. | Sample testing can be
used. If assets over $X are tested, what dollar amount and percentage
of the total MIC is being covered?
Note: If, as a result of sampling, a specific type of error occurs this error should be identified, quantified and a proposed adjustment should be made to correct the error. |
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| 80. |
Did you determine whether the accuracy related penalty or failure to provide information penalty should be assessed? |
Note: There are three key requirements that must be satisfied before the MIC can be claimed: qualified taxpayer, qualified property, and qualified costs. When proposing adjustments, if your primary issue is whether or not the taxpayer is a qualified taxpayer and the audit determination is not a clear cut result, you may need to consider examining the other MIC issues, as secondary audit positions.