Interest Rates (CR&TC Section 19778)
Description
Amended returns self-assessing tax that are filed after April 15, 2004 are subject
to an increased interest rate if all of the following applies:
- The taxpayer files an amended return before contacted by the IRS or FTB regarding a potentially abusive tax shelter.
- The taxpayer files an amended return to report an understatement of tax related to a reportable transaction.
- The amended return is for a tax year beginning after December 31, 1998.
Increased Rate Amount
The increased interest rate is equal to 150% of the adjusted annual rate.
Suspension of Interest (CR&TC Section 19116)
Interest is not suspended for individual taxpayers with revised taxable income greater than $200,000 if FTB contacts the taxpayer regarding the use of a potentially abusive tax shelter.
This provision applies to notices issued beginning January 1, 2004 on any return where the statute of limitations for assessment has not expired.