Deadline Quickly Approaching for State Taxpayers Participating in the
IRS' Offshore Voluntary Compliance Initiative
California taxpayers participating in the IRS' Voluntary Compliance Initiative for Offshore Tax Shelters have until October 15 to amend their state income tax returns and pay all tax, penalties, and interest to avoid civil fraud penalties and state prosecution, according to the Franchise Tax Board (FTB).
The IRS program targets taxpayers that used offshore payment cards or other offshore financial arrangements to underreport their income and tax liability. The IRS is offering these people the chance to surrender information and avoid federal civil fraud penalties and criminal prosecution by correcting their tax returns and providing information. The FTB will likewise not pursue civil fraud penalties or criminal prosecution for taxpayers participating in the IRS' offshore initiative who also choose to correct their California tax returns.
"California will grant special consideration to taxpayers who participate in the IRS program and come forward to correct their state returns," said State Controller and Franchise Tax Board Chair Steve Westly. "This is a great opportunity for taxpayers to come clean. I promise you, with hundreds of millions of dollars at stake, the state will be aggressively pursuing these cases."
Taxpayers planning to amend their California returns should use the following address to notify the FTB of their clients' participation or to correct underreported income tax liabilities and make payments.
FRANCHISE TAX BOARD ATTN: 343:M P O BOX 1673, MS D-757 SACRAMENTO CA 95812-1673
To learn more about this initiative and other information regarding abusive tax schemes, visit the FTB's new Abusive Tax Schemes Web page at www.ftb.ca.gov. It is a new Web service to educate the public about the direction the FTB is taking on abusive tax schemes. It contains frequently asked questions and provides updates on current legislation regarding these schemes. The Web page also provides a means for taxpayers, representatives, or informants to contact the FTB to report individuals or businesses involved in such schemes.
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