2007 California Revenue and Taxation Code Chapter 9.2. Tax Amnesty 2009

CA Codes (rtc:19740-19747)

19740.  The Franchise Tax Board shall administer a tax amnesty for
taxpayers subject to Part 10 (commencing with Section 17001) and Part
11 (commencing with Section 23001), as provided in this chapter.



19741.  The tax amnesty shall be conducted during the period
beginning February 1, 2009, and ending March 27, 2009, inclusive,
pursuant to Section 19743. The tax amnesty shall apply to tax
liabilities for taxable years beginning on or after January 1, 2003,
and before January 1, 2007.



19742.  (a) For any taxpayer who meets each of the requirements of
Section 19743, both of the following shall apply:
   (1) The Franchise Tax Board shall waive all unpaid penalties and
fees imposed by this part for each taxable year for which tax amnesty
is allowed, but only to the extent of the amount of any penalty or
fee that is owed as a result of previous nonreporting or
underreporting of tax liabilities or prior nonpayment of any taxes
previously assessed or proposed to be assessed for that taxable year.

   (2) Except as provided in subdivision (b), no criminal action
shall be brought against the taxpayer for the taxable years for which
tax amnesty is allowed for the nonreporting or underreporting of tax
liabilities or the nonpayment of any taxes previously assessed or
proposed to be assessed.
   (b) This chapter shall not apply to violations of this part for
which, as of February 1, 2009, any of the following apply:
   (1) A criminal complaint was filed against the taxpayer.
   (2) The taxpayer is under criminal investigation.
   (c) This chapter shall not apply to any nonreported or
underreported tax liability amounts attributable to a potentially
abusive tax avoidance transaction. For purposes of this chapter, a
"potentially abusive tax avoidance transaction" means any of the
following:
   (1) A tax shelter as defined in Section 6662(d)(2)(C) of the
Internal Revenue Code. For purposes of this chapter, Section 6662(d)
(2)(C) of the Internal Revenue Code is modified by substituting the
phrase "income or franchise tax" for "Federal income tax."
   (2) A reportable transaction, as defined in Section 6707A(c) (1)
of the Internal Revenue Code, with respect to which the requirements
of Section 6664(d)(2)(A) of the Internal Revenue Code are not met.
   (3) A listed transaction, as defined in Section 6707A(c)(2) of the
Internal Revenue Code.
   (4) Any entity, investment plan or arrangement, or other plan or
arrangement which is of a type that the Secretary of the Treasury,
Internal Revenue Service, or the Franchise Tax Board determines by
regulations, notices, coordinated issue papers, or other official
public notification as having a potential for tax avoidance or
evasion.
   (5) A gross misstatement, within the meaning of Section 6404(g)(2)
(D) of the Internal Revenue Code.
   (6) Any transaction to which Section 19774 applies.
   (d) No refund or credit shall be allowed with respect to any
penalty or fee paid with respect to a taxable year prior to the time
the taxpayer makes a request for tax amnesty for that taxable year
pursuant to Section 19743.
   (e) Notwithstanding Chapter 6 (commencing with Section 19301), no
claim for refund or credit for any amounts paid in connection with
the tax amnesty program under this chapter shall be allowed.




19743.  (a) This chapter shall apply to any taxpayer that satisfies
all of the following requirements:
   (1) During the tax amnesty period specified in Section 19741, is
eligible to participate in the tax amnesty.
   (2) During the tax amnesty period specified in Section 19741,
files a completed amnesty application with the Franchise Tax Board
electing to participate in the tax amnesty.
   (3) By June 1, 2009, does the following:
   (A) (i) For any taxable year eligible for the tax amnesty where
the taxpayer has not filed any required return, files a completed
original tax return for that year.
   (ii) For any taxable year eligible for the tax amnesty where the
taxpayer filed a return but underreported tax liability on that
return, files an amended return for that year.
   (B) Pays in full any taxes and interest due for each taxable year
described in clauses (i) and (ii) of subparagraph (A), as applicable,
for which amnesty is requested, or applies for an installment
payment agreement under subdivision (b). For taxpayers who have not
paid in full any taxes previously proposed to be assessed, pays in
full the taxes and interest due for that portion of the proposed
assessment for each taxable year for which amnesty is requested or
applies for an installment payment agreement under paragraph (2) of
subdivision (b).
   (4) In the case of any taxpayer that has filed for bankruptcy
protection under Title 11 of the United States Code, submits an order
from a Federal Bankruptcy Court allowing the taxpayer to participate
in the tax amnesty.
   (b) (1) For purposes of complying with the full payment provisions
of paragraph (3) of subdivision (a), if the full amount due is paid
within the period set forth in paragraph (3) of subdivision (c) of
Section 19101 after the date the Franchise Tax Board mails a notice
resulting from the filing of an amnesty application or the full
amount is paid by June 1, 2009, the full amount due shall be treated
as paid during the amnesty period.
   (2) (A) For purposes of complying with the full payment provisions
of subparagraph (B) of paragraph (3) of subdivision (a), the
Franchise Tax Board may enter into an installment payment agreement,
but only if final payment under the terms of that installment payment
agreement is due and is paid no later than June 30, 2010.
   (B) Any installment payment agreement authorized by this
subdivision shall include interest on the outstanding amount due at
the rate prescribed in Section 19521.
   (C) Failure by the taxpayer to comply fully with the terms of an
installment payment agreement under this subdivision shall render the
waiver of penalties and fees under Section 19742 null and void,
unless the Franchise Tax Board determines that the failure was due to
reasonable cause and not due to willful neglect.
   (D) In the case of any failure described under subparagraph (C),
the total amount of tax, interest, fees, and all penalties shall
become immediately due and payable.
   (c) (1) The application required under paragraph (2) of
subdivision (a) shall be in the form and manner specified by the
Franchise Tax Board, but in no case shall a mere payment of any taxes
and interest due, in whole or in part, for any taxable year
otherwise eligible for amnesty under this part be deemed to
constitute an acceptable amnesty application under this part. For
purposes of the prior sentence, the application of a refund from one
taxable year to offset a tax liability from another taxable year
otherwise eligible for amnesty shall not, without the filing of an
amnesty application, be deemed to constitute an acceptable amnesty
application under this part.
   (2) The Legislature specifically intends that the Franchise Tax
Board, in administering the amnesty application requirement under
this part, make the amnesty application process as streamlined as
possible to ensure that participation in the tax amnesty be available
to as many taxpayers as possible without otherwise compromising the
Franchise Tax Board's ability to enforce and collect the taxes
imposed under Part 10 (commencing with Section 17001) and Part 11
(commencing with Section 23001).
   (d) Upon the conclusion of the tax amnesty period, the Franchise
Tax Board may propose a deficiency upon any return filed pursuant to
subparagraph (A) of paragraph (3) of subdivision (a), impose
penalties and fees, or initiate criminal action under this part with
respect to the difference between the amount shown on that return and
the correct amount of tax. This action shall not invalidate any
waivers previously granted under Section 19742.
   (e) All revenues derived pursuant to subdivision (c) shall be
subject to Sections 19602 and 19604.



19744.  Notwithstanding any other provision of this chapter, if any
overpayment of tax shown on an original or amended return filed under
this article is refunded or credited within 180 days after the
return is filed, no interest shall be allowed under Section 19340 on
that overpayment.



19745.  (a) The Franchise Tax Board may issue forms, instructions,
notices, rules, or guidelines, and take any other necessary actions,
needed to implement this chapter, specifically including any forms,
instructions, notices, rules, or guidelines that specify the form and
manner of any acceptable form of amnesty application described in
Section 19743.
   (b) Chapter 3.5 (commencing with Section 11340) of Part 1 of
Division 3 of Title 2 of the Government Code shall not apply to any
standard, criterion, procedure, determination, rule, notice, or
guideline established or issued by the Franchise Tax Board pursuant
to this chapter.


19746.  (a) The Franchise Tax Board shall conduct a public outreach
program and adequately publicize the tax amnesty so as to maximize
public awareness and to make taxpayers aware of tax amnesty. In
addition, the Franchise Tax Board shall make taxpayers aware of the
new and increased penalties associated with taxpayer failure to
participate in the tax amnesty.
   (b) The Franchise Tax Board shall make reasonable efforts to
identify taxpayer liabilities and, to the extent practicable, shall
send written notice to taxpayers of their eligibility for the tax
amnesty.  However, failure of the Franchise Tax Board to notify a
taxpayer of the existence or correct amount of a tax liability
eligible for amnesty shall not preclude the taxpayer from
participating in the tax amnesty, nor shall that failure be grounds
for abating the penalty imposed under Section 19137.



19747.  Any taxpayer who has an existing installment payment
agreement under Section 19008 as of the start of the tax amnesty, and
who does not participate in the tax amnesty, may not be subject to
the penalty imposed under Section 19137 with respect to amounts
payable under that agreement.