FTB Urges Participants in the IRS' Offshore Voluntary Compliance Initiative to Correct State Returns Too
The Franchise Tax Board wants to remind taxpayers participating in the IRS' Voluntary Compliance Initiative for Offshore Tax Shelters to amend their state income tax returns along with their federal returns, according to the Franchise Tax Board.
“I encourage affected taxpayers to participate in the IRS' voluntary program to resolve these issues quickly. By taking advantage of this opportunity, both the government and taxpayers will avoid expensive examinations and litigation,” stated State Controller and Franchise Tax Board Chair Steve Westly.
Targeted are taxpayers that used offshore payment cards or other offshore financial arrangements to underreport their income. The IRS is offering these people the chance to come clean and avoid federal civil fraud penalties and criminal prosecution. Taxpayers have until April 15, 2003, to request to participate in the IRS' Offshore Voluntary Compliance Initiative as detailed in IRS Revenue Procedure 2003-11. Taxpayers must file federal returns reporting their correct tax amounts and pay any tax, interest, and penalties owed. They must also disclose all aspects of their offshore financial arrangements.
Although the Franchise Tax Board does not have a similar program, taxpayers taking part in the federal program will want to correct their California tax filings now to reduce penalties and interest. Notify the Franchise Tax Board of participation in the IRS' program by April 15, 2003. Taxpayers accepted into the IRS' Offshore Voluntary Compliance Initiative may request Franchise Tax Board auditors to suspend examinations on these offshore arrangements.
Please use the following address to notify the Franchise Tax Board of your clients' participation or to correct underreported income and tax liabilities.
Franchise Tax Board
PO Box 1673, MS D-757
Sacramento, CA 95812-1673