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2005 Tax Amnesty: Business Entities

Updated - December 15, 2004

  1. How will tax amnesty participation affect my business entity?
  2. What happens if I choose not to participate in the amnesty program?
  3. When must my business entity pay?
  4. Must I make amnesty payments by electronic funds transfer?
  5. Can exempt organizations participate in amnesty?
  6. My business entity is in bankruptcy. Can it still participate?
  7. Can I participate in amnesty if my business entity is suspended or forfeited?

  1. How will tax amnesty participation affect my business entity?

    You can apply for franchise or income tax amnesty on any tax years beginning before January 1, 2003, for which your entity has an outstanding obligation, has not filed a return, or has underreported tax liabilities. If your entity applies and meets these requirements, we'll cancel certain penalties and fees associated with the applicable years. In addition, we'll agree not to criminally prosecute the entity for those tax years.

    To maintain amnesty, your entity must remain in compliance by filing and paying its taxes in 2005 and 2006. If it doesn't meet this requirement, we must revoke amnesty, reinstate canceled penalties and fees, and assess new amnesty related penalties.

    On years for which we grant amnesty, your entity gives up its right to submit a claim for refund or credit for any amount paid during amnesty. Your entity also agrees to give up its protest and appeal rights (including protests or appeals in settlement) for any amounts selected for amnesty.

    California has a tax information exchange agreement with the IRS. What your entity discloses under state tax amnesty will be available to them.

  2. What happens if I choose not to participate in the amnesty program?

    Effective April 1, 2005, if you choose not to participate in amnesty for taxable years beginning before January 1, 2003, we may take the following actions:

  3. When must my business entity pay?

    Your business entity must pay its tax amnesty balance by May 31, 2005. If your business entity can't fully pay its balance by May 31, 2005, contact us at (916) 845-7033 for corporations or (916) 845-7165 for partnerships and limited liability companies.

  4. Must I make amnesty payments by electronic funds transfer?

    Your business entity may need to make its payments by electronic funds transfer if it meets certain income requirements. For more information, please see our Electronics Funds Transfer Information Guide (FTB Pub. 3817), or call us at (800) 852-2753. [Update: Pub 3817 is obsolete as of 5/19/2010.]

  5. Can exempt organizations participate in amnesty?

    They may participate in amnesty if the exempt organization files (or should file) either of the following forms:

    • Form 109, California Exempt Organization Business Income Tax Return
    • Form 100, California Corporation Franchise or Income Tax Return

    However, note that some penalties applicable to exempt organizations cannot be waived under amnesty. (See: Penalties and fees that can be waived by amnesty for Individuals or Business entities)

  6. My business entity is in bankruptcy. Can it still participate?

    If you want to participate in tax amnesty, but are currently under the protection of Title 11 of the United States Code, you need an order approving your participation from the Federal Bankruptcy Court having jurisdiction over your case. Bankruptcy Cases - Sample Stipulation for Relief from Automatic Stay.

  7. Can I participate in amnesty if my business entity is suspended or forfeited?

    A suspended or forfeited corporation can participate in Tax Amnesty. However, participation in Tax Amnesty does not automatically reinstate your entity's status back to good standing. You must still go through the revivor process with the Franchise Tax Board in order to reinstate your entity. Moreover, whether you go through the revivor process or not as part of your participation in amnesty you must remain in compliance with respect to any filing obligations you may have for those years in order to avoid a reassessment of waived penalties and assessment of substantial, new penalties under amnesty.

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