(a) The voluntary compliance initiative described in this article applies to any taxpayer who was not eligible to participate in the Internal Revenue Service’s Offshore Voluntary Compliance Initiative described in Revenue Procedure 2003–11, and during the period from January 1, 2004, to April 15, 2004, does both of the following:
(1) Files an amended tax return under this part for each taxable year for which the taxpayer has previously filed a tax return using an abusive tax avoidance transaction to underreport the taxpayer’s tax liability for that taxable year. Each amended return shall report all income from all sources, without regard to the abusive tax avoidance transaction.
(2) Except as provided in subdivision (b), pays in full all taxes and interest due.
(b) The Franchise Tax Board may enter into an installment payment agreement in lieu of the full payment required under paragraph (2) of subdivision (a). Any installment payment agreement authorized by this subdivision shall include interest on the unpaid amount at the rate prescribed in Section 19521. Failure by the taxpayer to fully comply with the terms of the installment payment agreement shall render the waiver of penalties null and void, and the total amount of tax, interest, and all penalties shall be immediately due and payable.
(c) After April 15, 2004, the Franchise Tax Board may issue a deficiency assessment upon an amended return filed pursuant to subdivision (a), impose penalties, 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 granted under Section 19752.
(d) In addition to any other authority to examine returns, for the purpose of improving state tax administration, the Franchise Tax Board may inquire into the facts and circumstances related to the use of abusive tax avoidance transactions to underreport the tax liabilities for which a taxpayer has participated in the voluntary compliance initiative under this article. Taxpayers shall cooperate fully with inquiries described in this subdivision. Failure by a taxpayer to fully cooperate in an inquiry described in this subdivision shall render the waiver of penalties under this article null and void and the taxpayer may be assessed any penalties that may apply.
(Amended (as added by Stats. 2003, Ch. 656) by Stats. 2011, Ch. 14, Sec. 17. (SB 86) Effective March 24, 2011.)
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