| Old | New | Differences | |
|---|---|---|---|
| 1 | - | ||
| 1 | + | CALIFORNIA LEGISLATURE 20212022 REGULAR SESSION Assembly Bill No. 879Introduced by Assembly Member Blanca RubioFebruary 17, 2021 An act to add Section 19777.6 to, to add Article 1.7 (commencing with Section 7067) to Chapter 8 of Part 1 of Division 2 of, and to add Chapter 9.2 (commencing with Section 19740) to Part 10.2 of Division 2 of, the Revenue and Taxation Code, relating to taxation. LEGISLATIVE COUNSEL'S DIGESTAB 879, as introduced, Blanca Rubio. Personal income tax: corporation tax: sales and use taxes: California Tax Amnesty and Revenue Recovery Act. Under existing law, the Franchise Tax Board collects and administers taxes imposed under the Personal Income Tax Law and the Corporation Tax Law. The California Department of Tax and Fee Administration collects and administers, among others, taxes imposed under the Sales and Use Tax Law, the Bradley-Burns Uniform Sales and Use Tax Law, and local laws imposed pursuant to the Transactions and Use Tax Law. Existing law sets forth various penalties, including penalties for the nonpayment or late payment of those taxes, and the failure to file or intentional filing of incorrect returns. Existing law established a tax amnesty program, conducted in 2005, for sales, use, personal income, and corporation tax liabilities due and payable for tax reporting periods or taxable years beginning before January 1, 2003. This bill would require the California Department of Tax and Fee Administration and the Franchise Tax Board to administer the California Tax Amnesty and Revenue Recovery Act, a tax amnesty program, as applicable, during the period beginning on February 1, 2022, to March 31, 2022, inclusive, or a period ending no later than June 30, 2022, for specified taxpayers with respect to penalties and fees for tax reporting periods beginning before January 1, 2021. This bill would require the applicant to the amnesty program to file the application under the penalty of perjury. By expanding the crime of perjury, this bill would impose a state-mandated local program. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.This bill would provide that no reimbursement is required by this act for a specified reason.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: YES Bill TextThe people of the State of California do enact as follows:SECTION 1. The Legislature finds and declares all of the following:(a) In March 2020, California, in an effort to protect the public from the spread of COVID-19 and save lives, took unprecedented action in ordering the closure of thousands of businesses, resulting in millions of Californians filing for unemployment. The economic impact is widespread, and many communities will continue to struggle for many years to come.(b) With COVID-19 economic stimulus relief exhausted, many businesses are struggling to survive with limited incomes. Business owners around the state have made tough decisions to refinance their homes, exhaust savings, and take on consumer debt to keep their doors open.(c) While making these decisions, business owners still are required to collect and remit all applicable taxes, pay regulatory fees, and pay other business operating expenses with a limited budget.(d) Some businesses may not have the necessary income to satisfy all existing tax obligations. If taxes are not paid, business owners face steep penalties and interest, which may lead to the permanent closure of these businesses and the permanent loss of associated jobs.(e) It is the intent of the Legislature to enact legislation to create a tax amnesty program that would provide taxpayers an avenue to pay overdue tax liability without costly penalties, bringing taxpayers into compliance and helping them recover from the closures caused by the COVID-19 pandemic. SEC. 2. Article 1.7 (commencing with Section 7067) is added to Chapter 8 of Part 1 of Division 2 of the Revenue and Taxation Code, to read: Article 1.7. California Tax Amnesty and Revenue Recovery Act 7067. The department shall develop and administer a tax amnesty program for taxpayers subject to Part 1 (commencing with Section 6001), as provided in this article.7067.1. The tax amnesty program shall be conducted for a two-month period beginning February 1, 2022, through March 31, 2022, inclusive, or during a timeframe ending no later than June 30, 2022. The program shall apply to tax liabilities due and payable for tax reporting periods beginning before January 1, 2021.7067.2. (a) For any taxpayer who meets the requirements of Section 7067.3:(1) The department shall waive all penalties imposed by this part, for the tax reporting periods for which tax amnesty is allowed, for the nonreporting or underreporting of tax liabilities or the nonpayment of any taxes previously determined or proposed to be determined.(2) Except as provided in subdivision (b), a criminal action shall not be brought against the taxpayer, for the tax reporting periods for which tax amnesty is requested, for the nonreporting or underreporting of tax liabilities.(b) This section does not apply to violations of this part for which, as of the first day of the amnesty period specified in Section 7071, (1) the taxpayer is on notice of a criminal investigation by a complaint having been filed against the taxpayer or by written notice having been mailed to the taxpayer that the taxpayer is under criminal investigation, or (2) a court proceeding has already been initiated.(c) A refund or credit shall not be granted of any penalty paid prior to the time the taxpayer makes a request for tax amnesty pursuant to Section 7067.3.7067.3. (a) This article shall apply to any taxpayer that, during the amnesty period specified in Section 7067.1, meets all of the following:(1) Is eligible to participate in the tax amnesty program.(2) Files a completed amnesty application with the department, signed under penalty of perjury, to participate in the tax amnesty program.(3) Within 60 days after the conclusion of the tax amnesty period, does all of the following:(A) Files completed tax returns for all tax reporting periods for which the taxpayer has not previously filed a tax return and files completed amended returns for all tax reporting periods for which the taxpayer underreported their tax liability.(B) Pays in full the taxes and interest due for all periods for which amnesty is requested, or applies for an installment agreement under subdivision (b).(C) For taxpayers that have not paid in full any tax liabilities due and payable for tax reporting periods beginning before January 1, 2021, pays in full the taxes and interest due for each period for that portion of the proposed determination for each period for which amnesty is requested or applies for an installment payment agreement under 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 amnesty program.(b) The department may enter into an installment payment agreement in lieu of the complete payment required under subparagraph (B) of paragraph (3) of subdivision (a), but only if final payment under the terms of that installment payment agreement is due and is paid no later than June 30, 2022. The installment payment agreement shall include interest on the outstanding amount due at the rate prescribed by law. Failure by the taxpayer to fully comply with the terms of the installment payment agreement shall render the waiver of penalties null and void, unless the department determines that the failure was due to reasonable causes, and the total amount of tax, interest, and all penalties shall be immediately due and payable.(c) The application required under paragraph (2) of subdivision (a) shall be in the form and manner specified by the department, but in no case shall a mere payment of any taxes and interest due, in whole or in part, for any period otherwise eligible for amnesty under this part, be deemed to constitute an acceptable amnesty application under this part. For purposes of the preceding sentence, the application of a refund from one period to offset a tax liability for another period otherwise eligible for amnesty shall not be allowed without the filing of an amnesty application under this part.7067.4. (a) Except for taxpayers that have entered into an installment payment agreement pursuant to subdivision (b) of Section 7067.3, there shall be added to the tax for each period for which amnesty could have been requested:(1) For amounts that are due and payable on the last date of the amnesty period, an amount equal to 7.75 percent of the accrued interest payable under Section 6591 for the period beginning on the date in which the tax was due and ending on the last day of the amnesty period specified in Section 7067.1.(2) An amount equal to 7.75 percent of the interest computed under Section 6591 on any final amount, including final deficiencies and self-assessed amounts, for the period beginning on the date in which the tax was due and ending on the last day of the amnesty period specified in Section 7067.1.(b) The penalty imposed by this section is in addition to any other penalty imposed under this part.(c) Article 2 (commencing with Section 6481) of Chapter 5 does not apply with respect to the assessment or collection of any penalty imposed by subdivision (a).7067.5. Any taxpayer that has an existing installment payment agreement under Section 6832 as of the start of the amnesty program, and that does not participate in the amnesty program, may not be subject to the penalty imposed under Section 7067.4.7067.6. The department shall issue forms and instructions and take other actions needed to implement this article. The provisions contained in Section 19740.5, to the extent feasible and practical, shall also apply to the department.7067.7. The Taxpayers Rights Advocate Office, in coordination with the department and the departments external affairs division, shall adequately publicize the tax amnesty program so as to maximize public awareness of the participation in the program. The department shall coordinate to the highest degree possible its publicity efforts and other actions taken in implementing this article with similar programs administered by the Franchise Tax Board.7067.8. Subdivision (b) of Section 19740.6, to the extent feasible and practical, shall also apply to the department.7067.9. (a) A penalty may not be imposed under this article upon a showing by the taxpayer that there was reasonable cause for, and the taxpayer acted in good faith with respect to, that portion.(b) (1) The determination of whether a taxpayer acted with reasonable cause and in good faith under this section is made on a case-by-case basis, taking into account all pertinent facts and circumstances. The most important factor is the extent of the taxpayers effort to assess the taxpayers proper tax liability.(2) Circumstances that may indicate reasonable cause and good faith include an honest misunderstanding of fact or law that is reasonable in light of all of the facts and circumstances, including the experience, knowledge, and education of the taxpayer. An isolated computational or transcriptional error generally is not inconsistent with reasonable cause and good faith. Reliance on the advice of a professional tax advisor does not necessarily demonstrate reasonable cause and good faith. Reasonable cause and good faith is not necessarily indicated by reliance on facts that, unknown to the taxpayer, are incorrect. Reliance on professional tax advice, or other facts, however, constitutes reasonable cause and good faith if, under all the circumstances, the reliance was reasonable and the taxpayer acted in good faith. (3) A taxpayers reliance on erroneous information reported on a return indicates reasonable cause and good faith, provided the taxpayer did not know or have reason to know that the information was incorrect. A taxpayer knows, or has reason to know, that the information on a return is incorrect if the information is inconsistent with other information reported or otherwise furnished to the taxpayer, or with the taxpayers knowledge of the transaction. (4) All facts and circumstances shall be taken into account in determining whether a taxpayer has reasonably relied in good faith on advice, including the opinion of a professional tax advisor, as to the treatment of the taxpayer, or any entity, plan, or arrangement, under state tax law. For example, the taxpayers education, sophistication, and business experience will be relevant in determining whether the taxpayers reliance on written tax advice was reasonable and made in good faith.(5) Advice is any written communication, including, but not limited to, letters, electronic communications, such as emails and text messages, tax returns prepared by a professional tax advisor, or other written communications, setting forth the analysis or conclusion of a person, other than the taxpayer, provided to or for the benefit of the taxpayer and on which the taxpayer relies, directly or indirectly, with respect to the imposition of the Section 7067.4 amnesty penalty. (c) Taxpayers with amounts in dispute as of the start of the amnesty program, or subsequent to the closing of the amnesty period, including under audit, protest, litigation, or claim for refund, shall not be subject to the amnesty penalty imposed under Section 7067.4.SEC. 3. Chapter 9.2 (commencing with Section 19740) is added to Part 10.2 of Division 2 of the Revenue and Taxation Code, to read: CHAPTER 9.2. California Tax Amnesty and Revenue Recovery Act 19740. The Franchise Tax Board shall administer a tax amnesty program for taxpayers subject to Part 10 (commencing with Section 17001) and Part 11 (commencing with Section 23001), as provided in this chapter.19740.1. The tax amnesty program shall be conducted during a two-month period beginning February 1, 2022, and ending March 31, 2022, inclusive, or during a timeframe ending no later than June 30, 2022, pursuant to Section 19740.3. The program shall apply to tax liabilities for taxable years beginning before January 1, 2021.19740.2. (a) For any taxpayer that meets each of the requirements of Section 19740.3, both of the following 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), a criminal action shall not 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, 2021, any of the following applies:(1) The taxpayer is on notice of a criminal investigation by a complaint having been filed against the taxpayer.(2) The taxpayer is under criminal investigation.(3) A court proceeding has already been initiated.(c) This section shall not apply to any nonreported or underreported tax liability amounts attributable to tax shelter items that could have been reported under either the voluntary compliance initiative under Chapter 9.5 (commencing with Section 19751) or the Internal Revenue Services Offshore Voluntary Compliance Initiative described in Revenue Procedure 2003-11, or the Internal Revenue Services Voluntary Disclosure Program.(d) A refund or credit not shall be granted 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 19740.3.(e) Notwithstanding Chapter 6 (commencing with Section 19301), a taxpayer may not file a claim for refund or credit for any amounts paid in connection with the tax amnesty program under this chapter.19740.3. (a) This chapter shall apply to any taxpayer who satisfies all of the following requirements:(1) During the tax amnesty program period specified in Section 19740.1, is eligible to participate in the tax amnesty program.(2) During the tax amnesty program period specified in Section 19740.1, files a completed amnesty application with the Franchise Tax Board, signed under penalty of perjury, electing to participate in the tax amnesty program.(3) Within 60 days after the conclusion of the tax amnesty period, does either of the following:(A) (i) For any taxable year eligible for the tax amnesty program 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 program 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 that 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 subdivision (b).(4) 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 within 60 days after the conclusion of the tax amnesty period, the full amount due shall be treated as paid during the amnesty period.(5) 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 amnesty program.(b) (1) 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, 2022.(2) Any installment payment agreement authorized by this subdivision shall include interest on the outstanding amount due at the rate prescribed in Section 19521.(3) Failure by the taxpayer to fully comply with the terms of an installment payment agreement under this subdivision shall render the waiver of penalties and fees under Section 19740.2 null and void, unless the Franchise Tax Board determines that the failure was due to reasonable cause and not due to willful neglect.(4) In the case of any failure described under paragraph (3), 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 participation in the amnesty program will be available to as many taxpayers as possible without otherwise compromising the Franchise Tax Boards ability to enforce and collect the taxes imposed under Part 10 (commencing with Section 17001) and Part 11 (commencing with Section 23001).(d) All revenues derived pursuant to subdivision (c) shall be subject to Sections 19602 and 19604.19740.4. 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.19740.5. (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 19733.(b) Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code does not apply to any standard, criterion, procedure, determination, rule, notice, or guideline established or issued by the Franchise Tax Board pursuant to this chapter.19740.6. (a) The Taxpayers Rights Advocates Office, in coordination with the Franchise Tax Board and the Franchise Tax Boards existing public outreach programs, shall adequately publicize the tax amnesty program so as to maximize public awareness and to make taxpayers aware of the program. (b) The Franchise Tax Board shall make reasonable efforts to identify taxpayer liabilities and, to the extent practicable, will send written notice to taxpayers of their eligibility for the tax amnesty program. 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 program, nor shall that failure be grounds for abating the penalty imposed under Section 19777.6.19740.7. Any taxpayer who has an existing installment payment agreement under Section 19008 as of the start of the amnesty program, and who does not participate in the amnesty program, may not be subject to the penalty imposed under Section 19777.6 with respect to amounts payable under that agreement.19740.8. (a) A penalty may not be imposed under this chapter upon a showing by the taxpayer that there was reasonable cause for, and the taxpayer acted in good faith with respect to, that portion.(b) (1) The determination of whether a taxpayer acted with reasonable cause and in good faith under this section is made on a case-by-case basis, taking into account all pertinent facts and circumstances. The most important factor is the extent of the taxpayers effort to assess the taxpayers proper tax liability.(2) Circumstances that may indicate reasonable cause and good faith include an honest misunderstanding of fact or law that is reasonable in light of all of the facts and circumstances, including the experience, knowledge, and education of the taxpayer. An isolated computational or transcriptional error generally is not inconsistent with reasonable cause and good faith. Reliance on an information return or on the advice of a professional tax advisor does not necessarily demonstrate reasonable cause and good faith. Reasonable cause and good faith is not necessarily indicated by reliance on facts that, unknown to the taxpayer, are incorrect. Reliance on an information return, professional advice, or other facts, however, constitutes reasonable cause and good faith if, under all the circumstances, that reliance was reasonable and the taxpayer acted in good faith. For example, reliance on erroneous information, such as an error relating to the cost or adjusted basis of property, the date property was placed in service, or the amount of opening or closing inventory, inadvertently included in data compiled by the various divisions of a multidivisional corporation or in financial books and records prepared by those divisions generally indicates reasonable cause and good faith, provided the corporation employed internal controls and procedures, reasonable under the circumstances, that were designed to identify such factual errors.(3) Reasonable cause and good faith ordinarily is not indicated by the mere fact that there is an appraisal of the value of property. Other factors to consider include the methodology and assumptions underlying the appraisal, the appraised value, the relationship between appraised value and purchase price, the circumstances under which the appraisal was obtained, and the appraisers relationship to the taxpayer or to the activity in which the property is used.(4) A taxpayers reliance on erroneous information reported on a Form W-2, Form 1099, or other information return indicates reasonable cause and good faith, provided the taxpayer did not know or have reason to know that the information was incorrect. A taxpayer knows, or has reason to know, that the information on an information return is incorrect if that information is inconsistent with other information reported or otherwise furnished to the taxpayer, or with the taxpayers knowledge of the transaction. This knowledge includes, for example, the taxpayers knowledge of the terms of the taxpayers employment relationship or of the rate of return on a payors obligation.(c) (1) All facts and circumstances shall be taken into account in determining whether a taxpayer has reasonably relied in good faith on advice, including the opinion of a professional tax advisor, as to the treatment of the taxpayer, or any entity, plan, or arrangement, under state or federal tax law. For example, the taxpayers education, sophistication, and business experience will be relevant in determining whether the taxpayers reliance on tax advice was reasonable and made in good faith. In no event will a taxpayer be considered to have reasonably relied in good faith on advice, including an opinion, unless the requirements of this paragraph are satisfied. The fact that these requirements are satisfied, however, will not necessarily establish that the taxpayer reasonably relied on the advice, including the opinion of a tax advisor, in good faith. For example, reliance may not be reasonable or in good faith if the taxpayer knew, or reasonably should have known, that the advisor lacked knowledge in the relevant aspects of state or federal tax law.(2) The advice must be based upon all pertinent facts and circumstances and the law as it relates to those facts and circumstances. For example, the advice must take into account the taxpayers purposes, and the relative weight of those purposes, for entering into a transaction and for structuring a transaction in a particular manner. In addition, the requirements of this paragraph are not satisfied if the taxpayer fails to disclose a fact that it knows, or reasonably should know, to be relevant to the proper tax treatment of an item.(3) The advice must not be based on unreasonable factual or legal assumptions, including assumptions as to future events, and must not unreasonably rely on the representations, statements, findings, or agreements of the taxpayer or any other person. For example, the advice must not be based upon a representation or assumption the taxpayer knows, or has reason to know, is unlikely to be true, such as an inaccurate representation or assumption as to the taxpayers purposes for entering into a transaction or for structuring a transaction in a particular manner.(4) A taxpayer may not rely on an opinion or advice that a regulation is invalid to establish that the taxpayer acted with reasonable cause and good faith unless the taxpayer adequately disclosed the position that the regulation in question is invalid.(5) Advice is any written communication, including, but not limited to, letters, electronic communications, such as emails and text messages, tax returns prepared by a professional tax advisor, or other written communication, setting forth the analysis or conclusion of a person, other than the taxpayer, provided to or for the benefit of the taxpayer and on which the taxpayer relies, directly or indirectly, with respect to the imposition of the Section 19777.6 amnesty penalty. (d) Taxpayers with amounts in dispute as of the start of the amnesty program, or subsequent to the closing of the amnesty period, including under audit, protest, litigation, or claim for refund, shall not be subject to the amnesty penalty imposed under Section 19777.6. SEC. 4. Section 19777.6 is added to the Revenue and Taxation Code, to read:19777.6. (a) There shall be added to the tax for each taxable year for which amnesty could have been requested:(1) For amounts that are due and payable on the last day of the amnesty period, an amount equal to 7.75 percent of the accrued interest payable under Section 19101 for the period beginning on the last date prescribed by law for the payment of that tax (determined without regard to extensions) and ending on the last day of the amnesty period specified in Section 19740.1.(2) For amounts that become due and payable after the last date of the amnesty period, an amount equal to 7.75 percent of the interest computed under Section 19101 on any final amount, including final deficiencies and self-assessed amounts, for the period beginning on the last date prescribed by law for the payment of the tax for the year of the deficiency, determined without regard to extensions, and ending on the last day of the amnesty period specified in Section 19740.1.(3) For purposes of paragraph (2), Sections 19107, 19108, 19110, and 19113 shall apply in determining the amount computed under Section 19101.(b) The penalty imposed by this section is in addition to any other penalty imposed under Part 10 (commencing with Section 17001), Part 11 (commencing with Section 23001), or this part.(c) This section does not apply to any amounts that are treated as paid during the amnesty program period under paragraph (4) of subdivision (a) of Section 19740.3 or paragraph (1) of subdivision (b) of Section 19740.3.(d) Article 3 (commencing with Section 19031), (relating to deficiency assessments) shall not apply with respect to the assessment or collection of any penalty imposed by subdivision (a).(e) (1) Notwithstanding Chapter 6 (commencing with Section 19301), a taxpayer may not file a claim for refund or credit for any amounts paid in connection with the penalty imposed in subdivision (a), except as provided in paragraph (2).(2) A taxpayer may file a claim for refund for any amounts paid to satisfy a penalty imposed under subdivision (a) on the grounds that the amount of the penalty was not properly computed by the Franchise Tax Board.SEC. 5. No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution. | |
| 2 | 2 | ||
| 3 | - | ||
| 3 | + | CALIFORNIA LEGISLATURE 20212022 REGULAR SESSION Assembly Bill No. 879Introduced by Assembly Member Blanca RubioFebruary 17, 2021 An act to add Section 19777.6 to, to add Article 1.7 (commencing with Section 7067) to Chapter 8 of Part 1 of Division 2 of, and to add Chapter 9.2 (commencing with Section 19740) to Part 10.2 of Division 2 of, the Revenue and Taxation Code, relating to taxation. LEGISLATIVE COUNSEL'S DIGESTAB 879, as introduced, Blanca Rubio. Personal income tax: corporation tax: sales and use taxes: California Tax Amnesty and Revenue Recovery Act. Under existing law, the Franchise Tax Board collects and administers taxes imposed under the Personal Income Tax Law and the Corporation Tax Law. The California Department of Tax and Fee Administration collects and administers, among others, taxes imposed under the Sales and Use Tax Law, the Bradley-Burns Uniform Sales and Use Tax Law, and local laws imposed pursuant to the Transactions and Use Tax Law. Existing law sets forth various penalties, including penalties for the nonpayment or late payment of those taxes, and the failure to file or intentional filing of incorrect returns. Existing law established a tax amnesty program, conducted in 2005, for sales, use, personal income, and corporation tax liabilities due and payable for tax reporting periods or taxable years beginning before January 1, 2003. This bill would require the California Department of Tax and Fee Administration and the Franchise Tax Board to administer the California Tax Amnesty and Revenue Recovery Act, a tax amnesty program, as applicable, during the period beginning on February 1, 2022, to March 31, 2022, inclusive, or a period ending no later than June 30, 2022, for specified taxpayers with respect to penalties and fees for tax reporting periods beginning before January 1, 2021. This bill would require the applicant to the amnesty program to file the application under the penalty of perjury. By expanding the crime of perjury, this bill would impose a state-mandated local program. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.This bill would provide that no reimbursement is required by this act for a specified reason.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: YES | |
| 4 | 4 | ||
| 5 | - | Amended IN Assembly May 03, 2021 | |
| 6 | 5 | ||
| 7 | - | Amended IN Assembly May 03, 2021 | |
| 6 | + | ||
| 7 | + | ||
| 8 | 8 | ||
| 9 | 9 | CALIFORNIA LEGISLATURE 20212022 REGULAR SESSION | |
| 10 | 10 | ||
| 11 | 11 | Assembly Bill | |
| 12 | 12 | ||
| 13 | 13 | No. 879 | |
| 14 | 14 | ||
| 15 | 15 | Introduced by Assembly Member Blanca RubioFebruary 17, 2021 | |
| 16 | 16 | ||
| 17 | 17 | Introduced by Assembly Member Blanca Rubio | |
| 18 | 18 | February 17, 2021 | |
| 19 | 19 | ||
| 20 | 20 | An act to add Section 19777.6 to, to add Article 1.7 (commencing with Section 7067) to Chapter 8 of Part 1 of Division 2 of, and to add Chapter 9.2 (commencing with Section 19740) to Part 10.2 of Division 2 of, the Revenue and Taxation Code, relating to taxation. | |
| 21 | 21 | ||
| 22 | 22 | LEGISLATIVE COUNSEL'S DIGEST | |
| 23 | 23 | ||
| 24 | 24 | ## LEGISLATIVE COUNSEL'S DIGEST | |
| 25 | 25 | ||
| 26 | - | AB 879, as | |
| 26 | + | AB 879, as introduced, Blanca Rubio. Personal income tax: corporation tax: sales and use taxes: California Tax Amnesty and Revenue Recovery Act. | |
| 27 | 27 | ||
| 28 | - | Under existing law, the Franchise Tax Board collects and administers taxes imposed under the Personal Income Tax Law and the Corporation Tax Law. The California Department of Tax and Fee Administration collects and administers, among others, taxes imposed under the Sales and Use Tax Law, the Bradley-Burns Uniform Sales and Use Tax Law, and local laws imposed pursuant to the Transactions and Use Tax Law. Existing law sets forth various penalties, including penalties for the nonpayment or late payment of those taxes, and the failure to file or intentional filing of incorrect returns. Existing law established a tax amnesty program, conducted in 2005, for sales, use, personal income, and corporation tax liabilities due and payable for tax reporting periods or taxable years beginning before January 1, 2003. This bill would require the California Department of Tax and Fee Administration and the Franchise Tax Board to administer the California Tax Amnesty and Revenue Recovery Act, a tax amnesty program, as applicable, during the period beginning on February 1, 2022, to March 31, 2022, | |
| 28 | + | Under existing law, the Franchise Tax Board collects and administers taxes imposed under the Personal Income Tax Law and the Corporation Tax Law. The California Department of Tax and Fee Administration collects and administers, among others, taxes imposed under the Sales and Use Tax Law, the Bradley-Burns Uniform Sales and Use Tax Law, and local laws imposed pursuant to the Transactions and Use Tax Law. Existing law sets forth various penalties, including penalties for the nonpayment or late payment of those taxes, and the failure to file or intentional filing of incorrect returns. Existing law established a tax amnesty program, conducted in 2005, for sales, use, personal income, and corporation tax liabilities due and payable for tax reporting periods or taxable years beginning before January 1, 2003. This bill would require the California Department of Tax and Fee Administration and the Franchise Tax Board to administer the California Tax Amnesty and Revenue Recovery Act, a tax amnesty program, as applicable, during the period beginning on February 1, 2022, to March 31, 2022, inclusive, or a period ending no later than June 30, 2022, for specified taxpayers with respect to penalties and fees for tax reporting periods beginning before January 1, 2021. This bill would require the applicant to the amnesty program to file the application under the penalty of perjury. By expanding the crime of perjury, this bill would impose a state-mandated local program. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.This bill would provide that no reimbursement is required by this act for a specified reason. | |
| 29 | 29 | ||
| 30 | 30 | Under existing law, the Franchise Tax Board collects and administers taxes imposed under the Personal Income Tax Law and the Corporation Tax Law. The California Department of Tax and Fee Administration collects and administers, among others, taxes imposed under the Sales and Use Tax Law, the Bradley-Burns Uniform Sales and Use Tax Law, and local laws imposed pursuant to the Transactions and Use Tax Law. Existing law sets forth various penalties, including penalties for the nonpayment or late payment of those taxes, and the failure to file or intentional filing of incorrect returns. Existing law established a tax amnesty program, conducted in 2005, for sales, use, personal income, and corporation tax liabilities due and payable for tax reporting periods or taxable years beginning before January 1, 2003. | |
| 31 | 31 | ||
| 32 | - | This bill would require the California Department of Tax and Fee Administration and the Franchise Tax Board to administer the California Tax Amnesty and Revenue Recovery Act, a tax amnesty program, as applicable, during the period beginning on February 1, 2022, to March 31, 2022, | |
| 32 | + | This bill would require the California Department of Tax and Fee Administration and the Franchise Tax Board to administer the California Tax Amnesty and Revenue Recovery Act, a tax amnesty program, as applicable, during the period beginning on February 1, 2022, to March 31, 2022, inclusive, or a period ending no later than June 30, 2022, for specified taxpayers with respect to penalties and fees for tax reporting periods beginning before January 1, 2021. This bill would require the applicant to the amnesty program to file the application under the penalty of perjury. By expanding the crime of perjury, this bill would impose a state-mandated local program. | |
| 33 | 33 | ||
| 34 | 34 | The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. | |
| 35 | 35 | ||
| 36 | 36 | This bill would provide that no reimbursement is required by this act for a specified reason. | |
| 37 | 37 | ||
| 38 | 38 | ## Digest Key | |
| 39 | 39 | ||
| 40 | 40 | ## Bill Text | |
| 41 | 41 | ||
| 42 | - | The people of the State of California do enact as follows:SECTION 1. The Legislature finds and declares all of the following:(a) In March 2020, California, in an effort to protect the public from the spread of COVID-19 and save lives, took unprecedented action in ordering the closure of thousands of businesses, resulting in millions of Californians filing for unemployment. The economic impact is widespread, and many communities will continue to struggle for many years to come.(b) With COVID-19 economic stimulus relief exhausted, many businesses are struggling to survive with limited incomes. Business owners around the state have made tough decisions to refinance their homes, exhaust savings, and take on consumer debt to keep their doors open.(c) While making these decisions, business owners still are required to collect and remit all applicable taxes, pay regulatory fees, and pay other business operating expenses with a limited budget.(d) Some businesses may not have the necessary income to satisfy all existing tax obligations. If taxes are not paid, business owners face steep penalties and interest, which may lead to the permanent closure of these businesses and the permanent loss of associated jobs.(e) It is the intent of the Legislature to enact legislation to create a tax amnesty program that would provide taxpayers an avenue to pay overdue tax liability without costly penalties, bringing taxpayers into compliance and helping them recover from the closures caused by the COVID-19 pandemic. SEC. 2. Article 1.7 (commencing with Section 7067) is added to Chapter 8 of Part 1 of Division 2 of the Revenue and Taxation Code, to read: Article 1.7. California Tax Amnesty and Revenue Recovery Act 7067. The department shall develop and administer a tax amnesty program for taxpayers subject to Part 1 (commencing with Section 6001), as provided in this article.7067.1. The tax amnesty program shall be conducted for a two-month period beginning February 1, 2022, through March 31, 2022, inclusive, or during a timeframe ending no later than June 30, 2022. | |
| 42 | + | The people of the State of California do enact as follows:SECTION 1. The Legislature finds and declares all of the following:(a) In March 2020, California, in an effort to protect the public from the spread of COVID-19 and save lives, took unprecedented action in ordering the closure of thousands of businesses, resulting in millions of Californians filing for unemployment. The economic impact is widespread, and many communities will continue to struggle for many years to come.(b) With COVID-19 economic stimulus relief exhausted, many businesses are struggling to survive with limited incomes. Business owners around the state have made tough decisions to refinance their homes, exhaust savings, and take on consumer debt to keep their doors open.(c) While making these decisions, business owners still are required to collect and remit all applicable taxes, pay regulatory fees, and pay other business operating expenses with a limited budget.(d) Some businesses may not have the necessary income to satisfy all existing tax obligations. If taxes are not paid, business owners face steep penalties and interest, which may lead to the permanent closure of these businesses and the permanent loss of associated jobs.(e) It is the intent of the Legislature to enact legislation to create a tax amnesty program that would provide taxpayers an avenue to pay overdue tax liability without costly penalties, bringing taxpayers into compliance and helping them recover from the closures caused by the COVID-19 pandemic. SEC. 2. Article 1.7 (commencing with Section 7067) is added to Chapter 8 of Part 1 of Division 2 of the Revenue and Taxation Code, to read: Article 1.7. California Tax Amnesty and Revenue Recovery Act 7067. The department shall develop and administer a tax amnesty program for taxpayers subject to Part 1 (commencing with Section 6001), as provided in this article.7067.1. The tax amnesty program shall be conducted for a two-month period beginning February 1, 2022, through March 31, 2022, inclusive, or during a timeframe ending no later than June 30, 2022. The program shall apply to tax liabilities due and payable for tax reporting periods beginning before January 1, 2021.7067.2. (a) For any taxpayer who meets the requirements of Section 7067.3:(1) The department shall waive all penalties imposed by this part, for the tax reporting periods for which tax amnesty is allowed, for the nonreporting or underreporting of tax liabilities or the nonpayment of any taxes previously determined or proposed to be determined.(2) Except as provided in subdivision (b), a criminal action shall not be brought against the taxpayer, for the tax reporting periods for which tax amnesty is requested, for the nonreporting or underreporting of tax liabilities.(b) This section does not apply to violations of this part for which, as of the first day of the amnesty period specified in Section 7071, (1) the taxpayer is on notice of a criminal investigation by a complaint having been filed against the taxpayer or by written notice having been mailed to the taxpayer that the taxpayer is under criminal investigation, or (2) a court proceeding has already been initiated.(c) A refund or credit shall not be granted of any penalty paid prior to the time the taxpayer makes a request for tax amnesty pursuant to Section 7067.3.7067.3. (a) This article shall apply to any taxpayer that, during the amnesty period specified in Section 7067.1, meets all of the following:(1) Is eligible to participate in the tax amnesty program.(2) Files a completed amnesty application with the department, signed under penalty of perjury, to participate in the tax amnesty program.(3) Within 60 days after the conclusion of the tax amnesty period, does all of the following:(A) Files completed tax returns for all tax reporting periods for which the taxpayer has not previously filed a tax return and files completed amended returns for all tax reporting periods for which the taxpayer underreported their tax liability.(B) Pays in full the taxes and interest due for all periods for which amnesty is requested, or applies for an installment agreement under subdivision (b).(C) For taxpayers that have not paid in full any tax liabilities due and payable for tax reporting periods beginning before January 1, 2021, pays in full the taxes and interest due for each period for that portion of the proposed determination for each period for which amnesty is requested or applies for an installment payment agreement under 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 amnesty program.(b) The department may enter into an installment payment agreement in lieu of the complete payment required under subparagraph (B) of paragraph (3) of subdivision (a), but only if final payment under the terms of that installment payment agreement is due and is paid no later than June 30, 2022. The installment payment agreement shall include interest on the outstanding amount due at the rate prescribed by law. Failure by the taxpayer to fully comply with the terms of the installment payment agreement shall render the waiver of penalties null and void, unless the department determines that the failure was due to reasonable causes, and the total amount of tax, interest, and all penalties shall be immediately due and payable.(c) The application required under paragraph (2) of subdivision (a) shall be in the form and manner specified by the department, but in no case shall a mere payment of any taxes and interest due, in whole or in part, for any period otherwise eligible for amnesty under this part, be deemed to constitute an acceptable amnesty application under this part. For purposes of the preceding sentence, the application of a refund from one period to offset a tax liability for another period otherwise eligible for amnesty shall not be allowed without the filing of an amnesty application under this part.7067.4. (a) Except for taxpayers that have entered into an installment payment agreement pursuant to subdivision (b) of Section 7067.3, there shall be added to the tax for each period for which amnesty could have been requested:(1) For amounts that are due and payable on the last date of the amnesty period, an amount equal to 7.75 percent of the accrued interest payable under Section 6591 for the period beginning on the date in which the tax was due and ending on the last day of the amnesty period specified in Section 7067.1.(2) An amount equal to 7.75 percent of the interest computed under Section 6591 on any final amount, including final deficiencies and self-assessed amounts, for the period beginning on the date in which the tax was due and ending on the last day of the amnesty period specified in Section 7067.1.(b) The penalty imposed by this section is in addition to any other penalty imposed under this part.(c) Article 2 (commencing with Section 6481) of Chapter 5 does not apply with respect to the assessment or collection of any penalty imposed by subdivision (a).7067.5. Any taxpayer that has an existing installment payment agreement under Section 6832 as of the start of the amnesty program, and that does not participate in the amnesty program, may not be subject to the penalty imposed under Section 7067.4.7067.6. The department shall issue forms and instructions and take other actions needed to implement this article. The provisions contained in Section 19740.5, to the extent feasible and practical, shall also apply to the department.7067.7. The Taxpayers Rights Advocate Office, in coordination with the department and the departments external affairs division, shall adequately publicize the tax amnesty program so as to maximize public awareness of the participation in the program. The department shall coordinate to the highest degree possible its publicity efforts and other actions taken in implementing this article with similar programs administered by the Franchise Tax Board.7067.8. Subdivision (b) of Section 19740.6, to the extent feasible and practical, shall also apply to the department.7067.9. (a) A penalty may not be imposed under this article upon a showing by the taxpayer that there was reasonable cause for, and the taxpayer acted in good faith with respect to, that portion.(b) (1) The determination of whether a taxpayer acted with reasonable cause and in good faith under this section is made on a case-by-case basis, taking into account all pertinent facts and circumstances. The most important factor is the extent of the taxpayers effort to assess the taxpayers proper tax liability.(2) Circumstances that may indicate reasonable cause and good faith include an honest misunderstanding of fact or law that is reasonable in light of all of the facts and circumstances, including the experience, knowledge, and education of the taxpayer. An isolated computational or transcriptional error generally is not inconsistent with reasonable cause and good faith. Reliance on the advice of a professional tax advisor does not necessarily demonstrate reasonable cause and good faith. Reasonable cause and good faith is not necessarily indicated by reliance on facts that, unknown to the taxpayer, are incorrect. Reliance on professional tax advice, or other facts, however, constitutes reasonable cause and good faith if, under all the circumstances, the reliance was reasonable and the taxpayer acted in good faith. (3) A taxpayers reliance on erroneous information reported on a return indicates reasonable cause and good faith, provided the taxpayer did not know or have reason to know that the information was incorrect. A taxpayer knows, or has reason to know, that the information on a return is incorrect if the information is inconsistent with other information reported or otherwise furnished to the taxpayer, or with the taxpayers knowledge of the transaction. (4) All facts and circumstances shall be taken into account in determining whether a taxpayer has reasonably relied in good faith on advice, including the opinion of a professional tax advisor, as to the treatment of the taxpayer, or any entity, plan, or arrangement, under state tax law. For example, the taxpayers education, sophistication, and business experience will be relevant in determining whether the taxpayers reliance on written tax advice was reasonable and made in good faith.(5) Advice is any written communication, including, but not limited to, letters, electronic communications, such as emails and text messages, tax returns prepared by a professional tax advisor, or other written communications, setting forth the analysis or conclusion of a person, other than the taxpayer, provided to or for the benefit of the taxpayer and on which the taxpayer relies, directly or indirectly, with respect to the imposition of the Section 7067.4 amnesty penalty. (c) Taxpayers with amounts in dispute as of the start of the amnesty program, or subsequent to the closing of the amnesty period, including under audit, protest, litigation, or claim for refund, shall not be subject to the amnesty penalty imposed under Section 7067.4.SEC. 3. Chapter 9.2 (commencing with Section 19740) is added to Part 10.2 of Division 2 of the Revenue and Taxation Code, to read: CHAPTER 9.2. California Tax Amnesty and Revenue Recovery Act 19740. The Franchise Tax Board shall administer a tax amnesty program for taxpayers subject to Part 10 (commencing with Section 17001) and Part 11 (commencing with Section 23001), as provided in this chapter.19740.1. The tax amnesty program shall be conducted during a two-month period beginning February 1, 2022, and ending March 31, 2022, inclusive, or during a timeframe ending no later than June 30, 2022, pursuant to Section 19740.3. The program shall apply to tax liabilities for taxable years beginning before January 1, 2021.19740.2. (a) For any taxpayer that meets each of the requirements of Section 19740.3, both of the following 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), a criminal action shall not 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, 2021, any of the following applies:(1) The taxpayer is on notice of a criminal investigation by a complaint having been filed against the taxpayer.(2) The taxpayer is under criminal investigation.(3) A court proceeding has already been initiated.(c) This section shall not apply to any nonreported or underreported tax liability amounts attributable to tax shelter items that could have been reported under either the voluntary compliance initiative under Chapter 9.5 (commencing with Section 19751) or the Internal Revenue Services Offshore Voluntary Compliance Initiative described in Revenue Procedure 2003-11, or the Internal Revenue Services Voluntary Disclosure Program.(d) A refund or credit not shall be granted 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 19740.3.(e) Notwithstanding Chapter 6 (commencing with Section 19301), a taxpayer may not file a claim for refund or credit for any amounts paid in connection with the tax amnesty program under this chapter.19740.3. (a) This chapter shall apply to any taxpayer who satisfies all of the following requirements:(1) During the tax amnesty program period specified in Section 19740.1, is eligible to participate in the tax amnesty program.(2) During the tax amnesty program period specified in Section 19740.1, files a completed amnesty application with the Franchise Tax Board, signed under penalty of perjury, electing to participate in the tax amnesty program.(3) Within 60 days after the conclusion of the tax amnesty period, does either of the following:(A) (i) For any taxable year eligible for the tax amnesty program 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 program 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 that 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 subdivision (b).(4) 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 within 60 days after the conclusion of the tax amnesty period, the full amount due shall be treated as paid during the amnesty period.(5) 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 amnesty program.(b) (1) 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, 2022.(2) Any installment payment agreement authorized by this subdivision shall include interest on the outstanding amount due at the rate prescribed in Section 19521.(3) Failure by the taxpayer to fully comply with the terms of an installment payment agreement under this subdivision shall render the waiver of penalties and fees under Section 19740.2 null and void, unless the Franchise Tax Board determines that the failure was due to reasonable cause and not due to willful neglect.(4) In the case of any failure described under paragraph (3), 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 participation in the amnesty program will be available to as many taxpayers as possible without otherwise compromising the Franchise Tax Boards ability to enforce and collect the taxes imposed under Part 10 (commencing with Section 17001) and Part 11 (commencing with Section 23001).(d) All revenues derived pursuant to subdivision (c) shall be subject to Sections 19602 and 19604.19740.4. 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.19740.5. (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 19733.(b) Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code does not apply to any standard, criterion, procedure, determination, rule, notice, or guideline established or issued by the Franchise Tax Board pursuant to this chapter.19740.6. (a) The Taxpayers Rights Advocates Office, in coordination with the Franchise Tax Board and the Franchise Tax Boards existing public outreach programs, shall adequately publicize the tax amnesty program so as to maximize public awareness and to make taxpayers aware of the program. (b) The Franchise Tax Board shall make reasonable efforts to identify taxpayer liabilities and, to the extent practicable, will send written notice to taxpayers of their eligibility for the tax amnesty program. 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 program, nor shall that failure be grounds for abating the penalty imposed under Section 19777.6.19740.7. Any taxpayer who has an existing installment payment agreement under Section 19008 as of the start of the amnesty program, and who does not participate in the amnesty program, may not be subject to the penalty imposed under Section 19777.6 with respect to amounts payable under that agreement.19740.8. (a) A penalty may not be imposed under this chapter upon a showing by the taxpayer that there was reasonable cause for, and the taxpayer acted in good faith with respect to, that portion.(b) (1) The determination of whether a taxpayer acted with reasonable cause and in good faith under this section is made on a case-by-case basis, taking into account all pertinent facts and circumstances. The most important factor is the extent of the taxpayers effort to assess the taxpayers proper tax liability.(2) Circumstances that may indicate reasonable cause and good faith include an honest misunderstanding of fact or law that is reasonable in light of all of the facts and circumstances, including the experience, knowledge, and education of the taxpayer. An isolated computational or transcriptional error generally is not inconsistent with reasonable cause and good faith. Reliance on an information return or on the advice of a professional tax advisor does not necessarily demonstrate reasonable cause and good faith. Reasonable cause and good faith is not necessarily indicated by reliance on facts that, unknown to the taxpayer, are incorrect. Reliance on an information return, professional advice, or other facts, however, constitutes reasonable cause and good faith if, under all the circumstances, that reliance was reasonable and the taxpayer acted in good faith. For example, reliance on erroneous information, such as an error relating to the cost or adjusted basis of property, the date property was placed in service, or the amount of opening or closing inventory, inadvertently included in data compiled by the various divisions of a multidivisional corporation or in financial books and records prepared by those divisions generally indicates reasonable cause and good faith, provided the corporation employed internal controls and procedures, reasonable under the circumstances, that were designed to identify such factual errors.(3) Reasonable cause and good faith ordinarily is not indicated by the mere fact that there is an appraisal of the value of property. Other factors to consider include the methodology and assumptions underlying the appraisal, the appraised value, the relationship between appraised value and purchase price, the circumstances under which the appraisal was obtained, and the appraisers relationship to the taxpayer or to the activity in which the property is used.(4) A taxpayers reliance on erroneous information reported on a Form W-2, Form 1099, or other information return indicates reasonable cause and good faith, provided the taxpayer did not know or have reason to know that the information was incorrect. A taxpayer knows, or has reason to know, that the information on an information return is incorrect if that information is inconsistent with other information reported or otherwise furnished to the taxpayer, or with the taxpayers knowledge of the transaction. This knowledge includes, for example, the taxpayers knowledge of the terms of the taxpayers employment relationship or of the rate of return on a payors obligation.(c) (1) All facts and circumstances shall be taken into account in determining whether a taxpayer has reasonably relied in good faith on advice, including the opinion of a professional tax advisor, as to the treatment of the taxpayer, or any entity, plan, or arrangement, under state or federal tax law. For example, the taxpayers education, sophistication, and business experience will be relevant in determining whether the taxpayers reliance on tax advice was reasonable and made in good faith. In no event will a taxpayer be considered to have reasonably relied in good faith on advice, including an opinion, unless the requirements of this paragraph are satisfied. The fact that these requirements are satisfied, however, will not necessarily establish that the taxpayer reasonably relied on the advice, including the opinion of a tax advisor, in good faith. For example, reliance may not be reasonable or in good faith if the taxpayer knew, or reasonably should have known, that the advisor lacked knowledge in the relevant aspects of state or federal tax law.(2) The advice must be based upon all pertinent facts and circumstances and the law as it relates to those facts and circumstances. For example, the advice must take into account the taxpayers purposes, and the relative weight of those purposes, for entering into a transaction and for structuring a transaction in a particular manner. In addition, the requirements of this paragraph are not satisfied if the taxpayer fails to disclose a fact that it knows, or reasonably should know, to be relevant to the proper tax treatment of an item.(3) The advice must not be based on unreasonable factual or legal assumptions, including assumptions as to future events, and must not unreasonably rely on the representations, statements, findings, or agreements of the taxpayer or any other person. For example, the advice must not be based upon a representation or assumption the taxpayer knows, or has reason to know, is unlikely to be true, such as an inaccurate representation or assumption as to the taxpayers purposes for entering into a transaction or for structuring a transaction in a particular manner.(4) A taxpayer may not rely on an opinion or advice that a regulation is invalid to establish that the taxpayer acted with reasonable cause and good faith unless the taxpayer adequately disclosed the position that the regulation in question is invalid.(5) Advice is any written communication, including, but not limited to, letters, electronic communications, such as emails and text messages, tax returns prepared by a professional tax advisor, or other written communication, setting forth the analysis or conclusion of a person, other than the taxpayer, provided to or for the benefit of the taxpayer and on which the taxpayer relies, directly or indirectly, with respect to the imposition of the Section 19777.6 amnesty penalty. (d) Taxpayers with amounts in dispute as of the start of the amnesty program, or subsequent to the closing of the amnesty period, including under audit, protest, litigation, or claim for refund, shall not be subject to the amnesty penalty imposed under Section 19777.6. SEC. 4. Section 19777.6 is added to the Revenue and Taxation Code, to read:19777.6. (a) There shall be added to the tax for each taxable year for which amnesty could have been requested:(1) For amounts that are due and payable on the last day of the amnesty period, an amount equal to 7.75 percent of the accrued interest payable under Section 19101 for the period beginning on the last date prescribed by law for the payment of that tax (determined without regard to extensions) and ending on the last day of the amnesty period specified in Section 19740.1.(2) For amounts that become due and payable after the last date of the amnesty period, an amount equal to 7.75 percent of the interest computed under Section 19101 on any final amount, including final deficiencies and self-assessed amounts, for the period beginning on the last date prescribed by law for the payment of the tax for the year of the deficiency, determined without regard to extensions, and ending on the last day of the amnesty period specified in Section 19740.1.(3) For purposes of paragraph (2), Sections 19107, 19108, 19110, and 19113 shall apply in determining the amount computed under Section 19101.(b) The penalty imposed by this section is in addition to any other penalty imposed under Part 10 (commencing with Section 17001), Part 11 (commencing with Section 23001), or this part.(c) This section does not apply to any amounts that are treated as paid during the amnesty program period under paragraph (4) of subdivision (a) of Section 19740.3 or paragraph (1) of subdivision (b) of Section 19740.3.(d) Article 3 (commencing with Section 19031), (relating to deficiency assessments) shall not apply with respect to the assessment or collection of any penalty imposed by subdivision (a).(e) (1) Notwithstanding Chapter 6 (commencing with Section 19301), a taxpayer may not file a claim for refund or credit for any amounts paid in connection with the penalty imposed in subdivision (a), except as provided in paragraph (2).(2) A taxpayer may file a claim for refund for any amounts paid to satisfy a penalty imposed under subdivision (a) on the grounds that the amount of the penalty was not properly computed by the Franchise Tax Board.SEC. 5. No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution. | |
| 43 | 43 | ||
| 44 | 44 | The people of the State of California do enact as follows: | |
| 45 | 45 | ||
| 46 | 46 | ## The people of the State of California do enact as follows: | |
| 47 | 47 | ||
| 48 | 48 | SECTION 1. The Legislature finds and declares all of the following:(a) In March 2020, California, in an effort to protect the public from the spread of COVID-19 and save lives, took unprecedented action in ordering the closure of thousands of businesses, resulting in millions of Californians filing for unemployment. The economic impact is widespread, and many communities will continue to struggle for many years to come.(b) With COVID-19 economic stimulus relief exhausted, many businesses are struggling to survive with limited incomes. Business owners around the state have made tough decisions to refinance their homes, exhaust savings, and take on consumer debt to keep their doors open.(c) While making these decisions, business owners still are required to collect and remit all applicable taxes, pay regulatory fees, and pay other business operating expenses with a limited budget.(d) Some businesses may not have the necessary income to satisfy all existing tax obligations. If taxes are not paid, business owners face steep penalties and interest, which may lead to the permanent closure of these businesses and the permanent loss of associated jobs.(e) It is the intent of the Legislature to enact legislation to create a tax amnesty program that would provide taxpayers an avenue to pay overdue tax liability without costly penalties, bringing taxpayers into compliance and helping them recover from the closures caused by the COVID-19 pandemic. | |
| 49 | 49 | ||
| 50 | 50 | SECTION 1. The Legislature finds and declares all of the following:(a) In March 2020, California, in an effort to protect the public from the spread of COVID-19 and save lives, took unprecedented action in ordering the closure of thousands of businesses, resulting in millions of Californians filing for unemployment. The economic impact is widespread, and many communities will continue to struggle for many years to come.(b) With COVID-19 economic stimulus relief exhausted, many businesses are struggling to survive with limited incomes. Business owners around the state have made tough decisions to refinance their homes, exhaust savings, and take on consumer debt to keep their doors open.(c) While making these decisions, business owners still are required to collect and remit all applicable taxes, pay regulatory fees, and pay other business operating expenses with a limited budget.(d) Some businesses may not have the necessary income to satisfy all existing tax obligations. If taxes are not paid, business owners face steep penalties and interest, which may lead to the permanent closure of these businesses and the permanent loss of associated jobs.(e) It is the intent of the Legislature to enact legislation to create a tax amnesty program that would provide taxpayers an avenue to pay overdue tax liability without costly penalties, bringing taxpayers into compliance and helping them recover from the closures caused by the COVID-19 pandemic. | |
| 51 | 51 | ||
| 52 | 52 | SECTION 1. The Legislature finds and declares all of the following: | |
| 53 | 53 | ||
| 54 | 54 | ### SECTION 1. | |
| 55 | 55 | ||
| 56 | 56 | (a) In March 2020, California, in an effort to protect the public from the spread of COVID-19 and save lives, took unprecedented action in ordering the closure of thousands of businesses, resulting in millions of Californians filing for unemployment. The economic impact is widespread, and many communities will continue to struggle for many years to come. | |
| 57 | 57 | ||
| 58 | 58 | (b) With COVID-19 economic stimulus relief exhausted, many businesses are struggling to survive with limited incomes. Business owners around the state have made tough decisions to refinance their homes, exhaust savings, and take on consumer debt to keep their doors open. | |
| 59 | 59 | ||
| 60 | 60 | (c) While making these decisions, business owners still are required to collect and remit all applicable taxes, pay regulatory fees, and pay other business operating expenses with a limited budget. | |
| 61 | 61 | ||
| 62 | 62 | (d) Some businesses may not have the necessary income to satisfy all existing tax obligations. If taxes are not paid, business owners face steep penalties and interest, which may lead to the permanent closure of these businesses and the permanent loss of associated jobs. | |
| 63 | 63 | ||
| 64 | 64 | (e) It is the intent of the Legislature to enact legislation to create a tax amnesty program that would provide taxpayers an avenue to pay overdue tax liability without costly penalties, bringing taxpayers into compliance and helping them recover from the closures caused by the COVID-19 pandemic. | |
| 65 | 65 | ||
| 66 | - | SEC. 2. Article 1.7 (commencing with Section 7067) is added to Chapter 8 of Part 1 of Division 2 of the Revenue and Taxation Code, to read: Article 1.7. California Tax Amnesty and Revenue Recovery Act 7067. The department shall develop and administer a tax amnesty program for taxpayers subject to Part 1 (commencing with Section 6001), as provided in this article.7067.1. The tax amnesty program shall be conducted for a two-month period beginning February 1, 2022, through March 31, 2022, inclusive, or during a timeframe ending no later than June 30, 2022. | |
| 66 | + | SEC. 2. Article 1.7 (commencing with Section 7067) is added to Chapter 8 of Part 1 of Division 2 of the Revenue and Taxation Code, to read: Article 1.7. California Tax Amnesty and Revenue Recovery Act 7067. The department shall develop and administer a tax amnesty program for taxpayers subject to Part 1 (commencing with Section 6001), as provided in this article.7067.1. The tax amnesty program shall be conducted for a two-month period beginning February 1, 2022, through March 31, 2022, inclusive, or during a timeframe ending no later than June 30, 2022. The program shall apply to tax liabilities due and payable for tax reporting periods beginning before January 1, 2021.7067.2. (a) For any taxpayer who meets the requirements of Section 7067.3:(1) The department shall waive all penalties imposed by this part, for the tax reporting periods for which tax amnesty is allowed, for the nonreporting or underreporting of tax liabilities or the nonpayment of any taxes previously determined or proposed to be determined.(2) Except as provided in subdivision (b), a criminal action shall not be brought against the taxpayer, for the tax reporting periods for which tax amnesty is requested, for the nonreporting or underreporting of tax liabilities.(b) This section does not apply to violations of this part for which, as of the first day of the amnesty period specified in Section 7071, (1) the taxpayer is on notice of a criminal investigation by a complaint having been filed against the taxpayer or by written notice having been mailed to the taxpayer that the taxpayer is under criminal investigation, or (2) a court proceeding has already been initiated.(c) A refund or credit shall not be granted of any penalty paid prior to the time the taxpayer makes a request for tax amnesty pursuant to Section 7067.3.7067.3. (a) This article shall apply to any taxpayer that, during the amnesty period specified in Section 7067.1, meets all of the following:(1) Is eligible to participate in the tax amnesty program.(2) Files a completed amnesty application with the department, signed under penalty of perjury, to participate in the tax amnesty program.(3) Within 60 days after the conclusion of the tax amnesty period, does all of the following:(A) Files completed tax returns for all tax reporting periods for which the taxpayer has not previously filed a tax return and files completed amended returns for all tax reporting periods for which the taxpayer underreported their tax liability.(B) Pays in full the taxes and interest due for all periods for which amnesty is requested, or applies for an installment agreement under subdivision (b).(C) For taxpayers that have not paid in full any tax liabilities due and payable for tax reporting periods beginning before January 1, 2021, pays in full the taxes and interest due for each period for that portion of the proposed determination for each period for which amnesty is requested or applies for an installment payment agreement under 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 amnesty program.(b) The department may enter into an installment payment agreement in lieu of the complete payment required under subparagraph (B) of paragraph (3) of subdivision (a), but only if final payment under the terms of that installment payment agreement is due and is paid no later than June 30, 2022. The installment payment agreement shall include interest on the outstanding amount due at the rate prescribed by law. Failure by the taxpayer to fully comply with the terms of the installment payment agreement shall render the waiver of penalties null and void, unless the department determines that the failure was due to reasonable causes, and the total amount of tax, interest, and all penalties shall be immediately due and payable.(c) The application required under paragraph (2) of subdivision (a) shall be in the form and manner specified by the department, but in no case shall a mere payment of any taxes and interest due, in whole or in part, for any period otherwise eligible for amnesty under this part, be deemed to constitute an acceptable amnesty application under this part. For purposes of the preceding sentence, the application of a refund from one period to offset a tax liability for another period otherwise eligible for amnesty shall not be allowed without the filing of an amnesty application under this part.7067.4. (a) Except for taxpayers that have entered into an installment payment agreement pursuant to subdivision (b) of Section 7067.3, there shall be added to the tax for each period for which amnesty could have been requested:(1) For amounts that are due and payable on the last date of the amnesty period, an amount equal to 7.75 percent of the accrued interest payable under Section 6591 for the period beginning on the date in which the tax was due and ending on the last day of the amnesty period specified in Section 7067.1.(2) An amount equal to 7.75 percent of the interest computed under Section 6591 on any final amount, including final deficiencies and self-assessed amounts, for the period beginning on the date in which the tax was due and ending on the last day of the amnesty period specified in Section 7067.1.(b) The penalty imposed by this section is in addition to any other penalty imposed under this part.(c) Article 2 (commencing with Section 6481) of Chapter 5 does not apply with respect to the assessment or collection of any penalty imposed by subdivision (a).7067.5. Any taxpayer that has an existing installment payment agreement under Section 6832 as of the start of the amnesty program, and that does not participate in the amnesty program, may not be subject to the penalty imposed under Section 7067.4.7067.6. The department shall issue forms and instructions and take other actions needed to implement this article. The provisions contained in Section 19740.5, to the extent feasible and practical, shall also apply to the department.7067.7. The Taxpayers Rights Advocate Office, in coordination with the department and the departments external affairs division, shall adequately publicize the tax amnesty program so as to maximize public awareness of the participation in the program. The department shall coordinate to the highest degree possible its publicity efforts and other actions taken in implementing this article with similar programs administered by the Franchise Tax Board.7067.8. Subdivision (b) of Section 19740.6, to the extent feasible and practical, shall also apply to the department.7067.9. (a) A penalty may not be imposed under this article upon a showing by the taxpayer that there was reasonable cause for, and the taxpayer acted in good faith with respect to, that portion.(b) (1) The determination of whether a taxpayer acted with reasonable cause and in good faith under this section is made on a case-by-case basis, taking into account all pertinent facts and circumstances. The most important factor is the extent of the taxpayers effort to assess the taxpayers proper tax liability.(2) Circumstances that may indicate reasonable cause and good faith include an honest misunderstanding of fact or law that is reasonable in light of all of the facts and circumstances, including the experience, knowledge, and education of the taxpayer. An isolated computational or transcriptional error generally is not inconsistent with reasonable cause and good faith. Reliance on the advice of a professional tax advisor does not necessarily demonstrate reasonable cause and good faith. Reasonable cause and good faith is not necessarily indicated by reliance on facts that, unknown to the taxpayer, are incorrect. Reliance on professional tax advice, or other facts, however, constitutes reasonable cause and good faith if, under all the circumstances, the reliance was reasonable and the taxpayer acted in good faith. (3) A taxpayers reliance on erroneous information reported on a return indicates reasonable cause and good faith, provided the taxpayer did not know or have reason to know that the information was incorrect. A taxpayer knows, or has reason to know, that the information on a return is incorrect if the information is inconsistent with other information reported or otherwise furnished to the taxpayer, or with the taxpayers knowledge of the transaction. (4) All facts and circumstances shall be taken into account in determining whether a taxpayer has reasonably relied in good faith on advice, including the opinion of a professional tax advisor, as to the treatment of the taxpayer, or any entity, plan, or arrangement, under state tax law. For example, the taxpayers education, sophistication, and business experience will be relevant in determining whether the taxpayers reliance on written tax advice was reasonable and made in good faith.(5) Advice is any written communication, including, but not limited to, letters, electronic communications, such as emails and text messages, tax returns prepared by a professional tax advisor, or other written communications, setting forth the analysis or conclusion of a person, other than the taxpayer, provided to or for the benefit of the taxpayer and on which the taxpayer relies, directly or indirectly, with respect to the imposition of the Section 7067.4 amnesty penalty. (c) Taxpayers with amounts in dispute as of the start of the amnesty program, or subsequent to the closing of the amnesty period, including under audit, protest, litigation, or claim for refund, shall not be subject to the amnesty penalty imposed under Section 7067.4. | |
| 67 | 67 | ||
| 68 | 68 | SEC. 2. Article 1.7 (commencing with Section 7067) is added to Chapter 8 of Part 1 of Division 2 of the Revenue and Taxation Code, to read: | |
| 69 | 69 | ||
| 70 | 70 | ### SEC. 2. | |
| 71 | 71 | ||
| 72 | - | Article 1.7. California Tax Amnesty and Revenue Recovery Act 7067. The department shall develop and administer a tax amnesty program for taxpayers subject to Part 1 (commencing with Section 6001), as provided in this article.7067.1. The tax amnesty program shall be conducted for a two-month period beginning February 1, 2022, through March 31, 2022, inclusive, or during a timeframe ending no later than June 30, 2022. | |
| 72 | + | Article 1.7. California Tax Amnesty and Revenue Recovery Act 7067. The department shall develop and administer a tax amnesty program for taxpayers subject to Part 1 (commencing with Section 6001), as provided in this article.7067.1. The tax amnesty program shall be conducted for a two-month period beginning February 1, 2022, through March 31, 2022, inclusive, or during a timeframe ending no later than June 30, 2022. The program shall apply to tax liabilities due and payable for tax reporting periods beginning before January 1, 2021.7067.2. (a) For any taxpayer who meets the requirements of Section 7067.3:(1) The department shall waive all penalties imposed by this part, for the tax reporting periods for which tax amnesty is allowed, for the nonreporting or underreporting of tax liabilities or the nonpayment of any taxes previously determined or proposed to be determined.(2) Except as provided in subdivision (b), a criminal action shall not be brought against the taxpayer, for the tax reporting periods for which tax amnesty is requested, for the nonreporting or underreporting of tax liabilities.(b) This section does not apply to violations of this part for which, as of the first day of the amnesty period specified in Section 7071, (1) the taxpayer is on notice of a criminal investigation by a complaint having been filed against the taxpayer or by written notice having been mailed to the taxpayer that the taxpayer is under criminal investigation, or (2) a court proceeding has already been initiated.(c) A refund or credit shall not be granted of any penalty paid prior to the time the taxpayer makes a request for tax amnesty pursuant to Section 7067.3.7067.3. (a) This article shall apply to any taxpayer that, during the amnesty period specified in Section 7067.1, meets all of the following:(1) Is eligible to participate in the tax amnesty program.(2) Files a completed amnesty application with the department, signed under penalty of perjury, to participate in the tax amnesty program.(3) Within 60 days after the conclusion of the tax amnesty period, does all of the following:(A) Files completed tax returns for all tax reporting periods for which the taxpayer has not previously filed a tax return and files completed amended returns for all tax reporting periods for which the taxpayer underreported their tax liability.(B) Pays in full the taxes and interest due for all periods for which amnesty is requested, or applies for an installment agreement under subdivision (b).(C) For taxpayers that have not paid in full any tax liabilities due and payable for tax reporting periods beginning before January 1, 2021, pays in full the taxes and interest due for each period for that portion of the proposed determination for each period for which amnesty is requested or applies for an installment payment agreement under 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 amnesty program.(b) The department may enter into an installment payment agreement in lieu of the complete payment required under subparagraph (B) of paragraph (3) of subdivision (a), but only if final payment under the terms of that installment payment agreement is due and is paid no later than June 30, 2022. The installment payment agreement shall include interest on the outstanding amount due at the rate prescribed by law. Failure by the taxpayer to fully comply with the terms of the installment payment agreement shall render the waiver of penalties null and void, unless the department determines that the failure was due to reasonable causes, and the total amount of tax, interest, and all penalties shall be immediately due and payable.(c) The application required under paragraph (2) of subdivision (a) shall be in the form and manner specified by the department, but in no case shall a mere payment of any taxes and interest due, in whole or in part, for any period otherwise eligible for amnesty under this part, be deemed to constitute an acceptable amnesty application under this part. For purposes of the preceding sentence, the application of a refund from one period to offset a tax liability for another period otherwise eligible for amnesty shall not be allowed without the filing of an amnesty application under this part.7067.4. (a) Except for taxpayers that have entered into an installment payment agreement pursuant to subdivision (b) of Section 7067.3, there shall be added to the tax for each period for which amnesty could have been requested:(1) For amounts that are due and payable on the last date of the amnesty period, an amount equal to 7.75 percent of the accrued interest payable under Section 6591 for the period beginning on the date in which the tax was due and ending on the last day of the amnesty period specified in Section 7067.1.(2) An amount equal to 7.75 percent of the interest computed under Section 6591 on any final amount, including final deficiencies and self-assessed amounts, for the period beginning on the date in which the tax was due and ending on the last day of the amnesty period specified in Section 7067.1.(b) The penalty imposed by this section is in addition to any other penalty imposed under this part.(c) Article 2 (commencing with Section 6481) of Chapter 5 does not apply with respect to the assessment or collection of any penalty imposed by subdivision (a).7067.5. Any taxpayer that has an existing installment payment agreement under Section 6832 as of the start of the amnesty program, and that does not participate in the amnesty program, may not be subject to the penalty imposed under Section 7067.4.7067.6. The department shall issue forms and instructions and take other actions needed to implement this article. The provisions contained in Section 19740.5, to the extent feasible and practical, shall also apply to the department.7067.7. The Taxpayers Rights Advocate Office, in coordination with the department and the departments external affairs division, shall adequately publicize the tax amnesty program so as to maximize public awareness of the participation in the program. The department shall coordinate to the highest degree possible its publicity efforts and other actions taken in implementing this article with similar programs administered by the Franchise Tax Board.7067.8. Subdivision (b) of Section 19740.6, to the extent feasible and practical, shall also apply to the department.7067.9. (a) A penalty may not be imposed under this article upon a showing by the taxpayer that there was reasonable cause for, and the taxpayer acted in good faith with respect to, that portion.(b) (1) The determination of whether a taxpayer acted with reasonable cause and in good faith under this section is made on a case-by-case basis, taking into account all pertinent facts and circumstances. The most important factor is the extent of the taxpayers effort to assess the taxpayers proper tax liability.(2) Circumstances that may indicate reasonable cause and good faith include an honest misunderstanding of fact or law that is reasonable in light of all of the facts and circumstances, including the experience, knowledge, and education of the taxpayer. An isolated computational or transcriptional error generally is not inconsistent with reasonable cause and good faith. Reliance on the advice of a professional tax advisor does not necessarily demonstrate reasonable cause and good faith. Reasonable cause and good faith is not necessarily indicated by reliance on facts that, unknown to the taxpayer, are incorrect. Reliance on professional tax advice, or other facts, however, constitutes reasonable cause and good faith if, under all the circumstances, the reliance was reasonable and the taxpayer acted in good faith. (3) A taxpayers reliance on erroneous information reported on a return indicates reasonable cause and good faith, provided the taxpayer did not know or have reason to know that the information was incorrect. A taxpayer knows, or has reason to know, that the information on a return is incorrect if the information is inconsistent with other information reported or otherwise furnished to the taxpayer, or with the taxpayers knowledge of the transaction. (4) All facts and circumstances shall be taken into account in determining whether a taxpayer has reasonably relied in good faith on advice, including the opinion of a professional tax advisor, as to the treatment of the taxpayer, or any entity, plan, or arrangement, under state tax law. For example, the taxpayers education, sophistication, and business experience will be relevant in determining whether the taxpayers reliance on written tax advice was reasonable and made in good faith.(5) Advice is any written communication, including, but not limited to, letters, electronic communications, such as emails and text messages, tax returns prepared by a professional tax advisor, or other written communications, setting forth the analysis or conclusion of a person, other than the taxpayer, provided to or for the benefit of the taxpayer and on which the taxpayer relies, directly or indirectly, with respect to the imposition of the Section 7067.4 amnesty penalty. (c) Taxpayers with amounts in dispute as of the start of the amnesty program, or subsequent to the closing of the amnesty period, including under audit, protest, litigation, or claim for refund, shall not be subject to the amnesty penalty imposed under Section 7067.4. | |
| 73 | 73 | ||
| 74 | - | Article 1.7. California Tax Amnesty and Revenue Recovery Act 7067. The department shall develop and administer a tax amnesty program for taxpayers subject to Part 1 (commencing with Section 6001), as provided in this article.7067.1. The tax amnesty program shall be conducted for a two-month period beginning February 1, 2022, through March 31, 2022, inclusive, or during a timeframe ending no later than June 30, 2022. | |
| 74 | + | Article 1.7. California Tax Amnesty and Revenue Recovery Act 7067. The department shall develop and administer a tax amnesty program for taxpayers subject to Part 1 (commencing with Section 6001), as provided in this article.7067.1. The tax amnesty program shall be conducted for a two-month period beginning February 1, 2022, through March 31, 2022, inclusive, or during a timeframe ending no later than June 30, 2022. The program shall apply to tax liabilities due and payable for tax reporting periods beginning before January 1, 2021.7067.2. (a) For any taxpayer who meets the requirements of Section 7067.3:(1) The department shall waive all penalties imposed by this part, for the tax reporting periods for which tax amnesty is allowed, for the nonreporting or underreporting of tax liabilities or the nonpayment of any taxes previously determined or proposed to be determined.(2) Except as provided in subdivision (b), a criminal action shall not be brought against the taxpayer, for the tax reporting periods for which tax amnesty is requested, for the nonreporting or underreporting of tax liabilities.(b) This section does not apply to violations of this part for which, as of the first day of the amnesty period specified in Section 7071, (1) the taxpayer is on notice of a criminal investigation by a complaint having been filed against the taxpayer or by written notice having been mailed to the taxpayer that the taxpayer is under criminal investigation, or (2) a court proceeding has already been initiated.(c) A refund or credit shall not be granted of any penalty paid prior to the time the taxpayer makes a request for tax amnesty pursuant to Section 7067.3.7067.3. (a) This article shall apply to any taxpayer that, during the amnesty period specified in Section 7067.1, meets all of the following:(1) Is eligible to participate in the tax amnesty program.(2) Files a completed amnesty application with the department, signed under penalty of perjury, to participate in the tax amnesty program.(3) Within 60 days after the conclusion of the tax amnesty period, does all of the following:(A) Files completed tax returns for all tax reporting periods for which the taxpayer has not previously filed a tax return and files completed amended returns for all tax reporting periods for which the taxpayer underreported their tax liability.(B) Pays in full the taxes and interest due for all periods for which amnesty is requested, or applies for an installment agreement under subdivision (b).(C) For taxpayers that have not paid in full any tax liabilities due and payable for tax reporting periods beginning before January 1, 2021, pays in full the taxes and interest due for each period for that portion of the proposed determination for each period for which amnesty is requested or applies for an installment payment agreement under 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 amnesty program.(b) The department may enter into an installment payment agreement in lieu of the complete payment required under subparagraph (B) of paragraph (3) of subdivision (a), but only if final payment under the terms of that installment payment agreement is due and is paid no later than June 30, 2022. The installment payment agreement shall include interest on the outstanding amount due at the rate prescribed by law. Failure by the taxpayer to fully comply with the terms of the installment payment agreement shall render the waiver of penalties null and void, unless the department determines that the failure was due to reasonable causes, and the total amount of tax, interest, and all penalties shall be immediately due and payable.(c) The application required under paragraph (2) of subdivision (a) shall be in the form and manner specified by the department, but in no case shall a mere payment of any taxes and interest due, in whole or in part, for any period otherwise eligible for amnesty under this part, be deemed to constitute an acceptable amnesty application under this part. For purposes of the preceding sentence, the application of a refund from one period to offset a tax liability for another period otherwise eligible for amnesty shall not be allowed without the filing of an amnesty application under this part.7067.4. (a) Except for taxpayers that have entered into an installment payment agreement pursuant to subdivision (b) of Section 7067.3, there shall be added to the tax for each period for which amnesty could have been requested:(1) For amounts that are due and payable on the last date of the amnesty period, an amount equal to 7.75 percent of the accrued interest payable under Section 6591 for the period beginning on the date in which the tax was due and ending on the last day of the amnesty period specified in Section 7067.1.(2) An amount equal to 7.75 percent of the interest computed under Section 6591 on any final amount, including final deficiencies and self-assessed amounts, for the period beginning on the date in which the tax was due and ending on the last day of the amnesty period specified in Section 7067.1.(b) The penalty imposed by this section is in addition to any other penalty imposed under this part.(c) Article 2 (commencing with Section 6481) of Chapter 5 does not apply with respect to the assessment or collection of any penalty imposed by subdivision (a).7067.5. Any taxpayer that has an existing installment payment agreement under Section 6832 as of the start of the amnesty program, and that does not participate in the amnesty program, may not be subject to the penalty imposed under Section 7067.4.7067.6. The department shall issue forms and instructions and take other actions needed to implement this article. The provisions contained in Section 19740.5, to the extent feasible and practical, shall also apply to the department.7067.7. The Taxpayers Rights Advocate Office, in coordination with the department and the departments external affairs division, shall adequately publicize the tax amnesty program so as to maximize public awareness of the participation in the program. The department shall coordinate to the highest degree possible its publicity efforts and other actions taken in implementing this article with similar programs administered by the Franchise Tax Board.7067.8. Subdivision (b) of Section 19740.6, to the extent feasible and practical, shall also apply to the department.7067.9. (a) A penalty may not be imposed under this article upon a showing by the taxpayer that there was reasonable cause for, and the taxpayer acted in good faith with respect to, that portion.(b) (1) The determination of whether a taxpayer acted with reasonable cause and in good faith under this section is made on a case-by-case basis, taking into account all pertinent facts and circumstances. The most important factor is the extent of the taxpayers effort to assess the taxpayers proper tax liability.(2) Circumstances that may indicate reasonable cause and good faith include an honest misunderstanding of fact or law that is reasonable in light of all of the facts and circumstances, including the experience, knowledge, and education of the taxpayer. An isolated computational or transcriptional error generally is not inconsistent with reasonable cause and good faith. Reliance on the advice of a professional tax advisor does not necessarily demonstrate reasonable cause and good faith. Reasonable cause and good faith is not necessarily indicated by reliance on facts that, unknown to the taxpayer, are incorrect. Reliance on professional tax advice, or other facts, however, constitutes reasonable cause and good faith if, under all the circumstances, the reliance was reasonable and the taxpayer acted in good faith. (3) A taxpayers reliance on erroneous information reported on a return indicates reasonable cause and good faith, provided the taxpayer did not know or have reason to know that the information was incorrect. A taxpayer knows, or has reason to know, that the information on a return is incorrect if the information is inconsistent with other information reported or otherwise furnished to the taxpayer, or with the taxpayers knowledge of the transaction. (4) All facts and circumstances shall be taken into account in determining whether a taxpayer has reasonably relied in good faith on advice, including the opinion of a professional tax advisor, as to the treatment of the taxpayer, or any entity, plan, or arrangement, under state tax law. For example, the taxpayers education, sophistication, and business experience will be relevant in determining whether the taxpayers reliance on written tax advice was reasonable and made in good faith.(5) Advice is any written communication, including, but not limited to, letters, electronic communications, such as emails and text messages, tax returns prepared by a professional tax advisor, or other written communications, setting forth the analysis or conclusion of a person, other than the taxpayer, provided to or for the benefit of the taxpayer and on which the taxpayer relies, directly or indirectly, with respect to the imposition of the Section 7067.4 amnesty penalty. (c) Taxpayers with amounts in dispute as of the start of the amnesty program, or subsequent to the closing of the amnesty period, including under audit, protest, litigation, or claim for refund, shall not be subject to the amnesty penalty imposed under Section 7067.4. | |
| 75 | 75 | ||
| 76 | 76 | Article 1.7. California Tax Amnesty and Revenue Recovery Act | |
| 77 | 77 | ||
| 78 | 78 | Article 1.7. California Tax Amnesty and Revenue Recovery Act | |
| 79 | 79 | ||
| 80 | 80 | 7067. The department shall develop and administer a tax amnesty program for taxpayers subject to Part 1 (commencing with Section 6001), as provided in this article. | |
| 81 | 81 | ||
| 82 | 82 | ||
| 83 | 83 | ||
| 84 | 84 | 7067. The department shall develop and administer a tax amnesty program for taxpayers subject to Part 1 (commencing with Section 6001), as provided in this article. | |
| 85 | 85 | ||
| 86 | - | 7067.1. The tax amnesty program shall be conducted for a two-month period beginning February 1, 2022, through March 31, 2022, inclusive, or during a timeframe ending no later than June 30, 2022. | |
| 86 | + | 7067.1. The tax amnesty program shall be conducted for a two-month period beginning February 1, 2022, through March 31, 2022, inclusive, or during a timeframe ending no later than June 30, 2022. The program shall apply to tax liabilities due and payable for tax reporting periods beginning before January 1, 2021. | |
| 87 | 87 | ||
| 88 | 88 | ||
| 89 | 89 | ||
| 90 | - | 7067.1. The tax amnesty program shall be conducted for a two-month period beginning February 1, 2022, through March 31, 2022, inclusive, or during a timeframe ending no later than June 30, 2022. | |
| 90 | + | 7067.1. The tax amnesty program shall be conducted for a two-month period beginning February 1, 2022, through March 31, 2022, inclusive, or during a timeframe ending no later than June 30, 2022. The program shall apply to tax liabilities due and payable for tax reporting periods beginning before January 1, 2021. | |
| 91 | 91 | ||
| 92 | - | 7067.2. (a) For any taxpayer who meets the requirements of Section 7067.3:(1) The department shall waive all penalties imposed by this part, for the tax reporting periods for which tax amnesty is allowed, for the nonreporting or underreporting of tax liabilities or the nonpayment of any taxes previously determined or proposed to be determined.(2) Except as provided in subdivision (b), a criminal action shall not be brought against the taxpayer, for the tax reporting periods for which tax amnesty is requested, for the nonreporting or underreporting of tax liabilities.(b) This section does not apply to violations of this part for which, as of the first day of the amnesty period specified in Section 7071, | |
| 92 | + | 7067.2. (a) For any taxpayer who meets the requirements of Section 7067.3:(1) The department shall waive all penalties imposed by this part, for the tax reporting periods for which tax amnesty is allowed, for the nonreporting or underreporting of tax liabilities or the nonpayment of any taxes previously determined or proposed to be determined.(2) Except as provided in subdivision (b), a criminal action shall not be brought against the taxpayer, for the tax reporting periods for which tax amnesty is requested, for the nonreporting or underreporting of tax liabilities.(b) This section does not apply to violations of this part for which, as of the first day of the amnesty period specified in Section 7071, (1) the taxpayer is on notice of a criminal investigation by a complaint having been filed against the taxpayer or by written notice having been mailed to the taxpayer that the taxpayer is under criminal investigation, or (2) a court proceeding has already been initiated.(c) A refund or credit shall not be granted of any penalty paid prior to the time the taxpayer makes a request for tax amnesty pursuant to Section 7067.3. | |
| 93 | 93 | ||
| 94 | 94 | ||
| 95 | 95 | ||
| 96 | 96 | 7067.2. (a) For any taxpayer who meets the requirements of Section 7067.3: | |
| 97 | 97 | ||
| 98 | 98 | (1) The department shall waive all penalties imposed by this part, for the tax reporting periods for which tax amnesty is allowed, for the nonreporting or underreporting of tax liabilities or the nonpayment of any taxes previously determined or proposed to be determined. | |
| 99 | 99 | ||
| 100 | 100 | (2) Except as provided in subdivision (b), a criminal action shall not be brought against the taxpayer, for the tax reporting periods for which tax amnesty is requested, for the nonreporting or underreporting of tax liabilities. | |
| 101 | 101 | ||
| 102 | - | (b) This section does not apply to violations of this part for which, as of the first day of the amnesty period specified in Section 7071 | |
| 102 | + | (b) This section does not apply to violations of this part for which, as of the first day of the amnesty period specified in Section 7071, (1) the taxpayer is on notice of a criminal investigation by a complaint having been filed against the taxpayer or by written notice having been mailed to the taxpayer that the taxpayer is under criminal investigation, or (2) a court proceeding has already been initiated. | |
| 103 | 103 | ||
| 104 | 104 | (c) A refund or credit shall not be granted of any penalty paid prior to the time the taxpayer makes a request for tax amnesty pursuant to Section 7067.3. | |
| 105 | 105 | ||
| 106 | - | 7067.3. (a) This article shall apply to any taxpayer that, during the amnesty period specified in Section 7067.1, meets all of the following:(1) Is eligible to participate in the tax amnesty program.(2) Files a completed amnesty application with the department, signed under penalty of perjury, to participate in the tax amnesty program.(3) Within 60 days after the conclusion of the tax amnesty period, does all | |
| 106 | + | 7067.3. (a) This article shall apply to any taxpayer that, during the amnesty period specified in Section 7067.1, meets all of the following:(1) Is eligible to participate in the tax amnesty program.(2) Files a completed amnesty application with the department, signed under penalty of perjury, to participate in the tax amnesty program.(3) Within 60 days after the conclusion of the tax amnesty period, does all of the following:(A) Files completed tax returns for all tax reporting periods for which the taxpayer has not previously filed a tax return and files completed amended returns for all tax reporting periods for which the taxpayer underreported their tax liability.(B) Pays in full the taxes and interest due for all periods for which amnesty is requested, or applies for an installment agreement under subdivision (b).(C) For taxpayers that have not paid in full any tax liabilities due and payable for tax reporting periods beginning before January 1, 2021, pays in full the taxes and interest due for each period for that portion of the proposed determination for each period for which amnesty is requested or applies for an installment payment agreement under 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 amnesty program.(b) The department may enter into an installment payment agreement in lieu of the complete payment required under subparagraph (B) of paragraph (3) of subdivision (a), but only if final payment under the terms of that installment payment agreement is due and is paid no later than June 30, 2022. The installment payment agreement shall include interest on the outstanding amount due at the rate prescribed by law. Failure by the taxpayer to fully comply with the terms of the installment payment agreement shall render the waiver of penalties null and void, unless the department determines that the failure was due to reasonable causes, and the total amount of tax, interest, and all penalties shall be immediately due and payable.(c) The application required under paragraph (2) of subdivision (a) shall be in the form and manner specified by the department, but in no case shall a mere payment of any taxes and interest due, in whole or in part, for any period otherwise eligible for amnesty under this part, be deemed to constitute an acceptable amnesty application under this part. For purposes of the preceding sentence, the application of a refund from one period to offset a tax liability for another period otherwise eligible for amnesty shall not be allowed without the filing of an amnesty application under this part. | |
| 107 | 107 | ||
| 108 | 108 | ||
| 109 | 109 | ||
| 110 | 110 | 7067.3. (a) This article shall apply to any taxpayer that, during the amnesty period specified in Section 7067.1, meets all of the following: | |
| 111 | 111 | ||
| 112 | 112 | (1) Is eligible to participate in the tax amnesty program. | |
| 113 | 113 | ||
| 114 | 114 | (2) Files a completed amnesty application with the department, signed under penalty of perjury, to participate in the tax amnesty program. | |
| 115 | 115 | ||
| 116 | - | (3) Within 60 days after the conclusion of the tax amnesty period, does all | |
| 116 | + | (3) Within 60 days after the conclusion of the tax amnesty period, does all of the following: | |
| 117 | 117 | ||
| 118 | 118 | (A) Files completed tax returns for all tax reporting periods for which the taxpayer has not previously filed a tax return and files completed amended returns for all tax reporting periods for which the taxpayer underreported their tax liability. | |
| 119 | 119 | ||
| 120 | 120 | (B) Pays in full the taxes and interest due for all periods for which amnesty is requested, or applies for an installment agreement under subdivision (b). | |
| 121 | 121 | ||
| 122 | 122 | (C) For taxpayers that have not paid in full any tax liabilities due and payable for tax reporting periods beginning before January 1, 2021, pays in full the taxes and interest due for each period for that portion of the proposed determination for each period for which amnesty is requested or applies for an installment payment agreement under subdivision (b). | |
| 123 | 123 | ||
| 124 | 124 | (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 amnesty program. | |
| 125 | 125 | ||
| 126 | - | (b) The department may enter into an installment payment agreement in lieu of the complete payment required under subparagraph (B) of paragraph (3) of subdivision (a), but only if final payment under the terms of that installment payment agreement is due and is paid no later than June 30, 2022 | |
| 126 | + | (b) The department may enter into an installment payment agreement in lieu of the complete payment required under subparagraph (B) of paragraph (3) of subdivision (a), but only if final payment under the terms of that installment payment agreement is due and is paid no later than June 30, 2022. The installment payment agreement shall include interest on the outstanding amount due at the rate prescribed by law. Failure by the taxpayer to fully comply with the terms of the installment payment agreement shall render the waiver of penalties null and void, unless the department determines that the failure was due to reasonable causes, and the total amount of tax, interest, and all penalties shall be immediately due and payable. | |
| 127 | 127 | ||
| 128 | 128 | (c) The application required under paragraph (2) of subdivision (a) shall be in the form and manner specified by the department, but in no case shall a mere payment of any taxes and interest due, in whole or in part, for any period otherwise eligible for amnesty under this part, be deemed to constitute an acceptable amnesty application under this part. For purposes of the preceding sentence, the application of a refund from one period to offset a tax liability for another period otherwise eligible for amnesty shall not be allowed without the filing of an amnesty application under this part. | |
| 129 | 129 | ||
| 130 | 130 | 7067.4. (a) Except for taxpayers that have entered into an installment payment agreement pursuant to subdivision (b) of Section 7067.3, there shall be added to the tax for each period for which amnesty could have been requested:(1) For amounts that are due and payable on the last date of the amnesty period, an amount equal to 7.75 percent of the accrued interest payable under Section 6591 for the period beginning on the date in which the tax was due and ending on the last day of the amnesty period specified in Section 7067.1.(2) An amount equal to 7.75 percent of the interest computed under Section 6591 on any final amount, including final deficiencies and self-assessed amounts, for the period beginning on the date in which the tax was due and ending on the last day of the amnesty period specified in Section 7067.1.(b) The penalty imposed by this section is in addition to any other penalty imposed under this part.(c) Article 2 (commencing with Section 6481) of Chapter 5 does not apply with respect to the assessment or collection of any penalty imposed by subdivision (a). | |
| 131 | 131 | ||
| 132 | 132 | ||
| 133 | 133 | ||
| 134 | 134 | 7067.4. (a) Except for taxpayers that have entered into an installment payment agreement pursuant to subdivision (b) of Section 7067.3, there shall be added to the tax for each period for which amnesty could have been requested: | |
| 135 | 135 | ||
| 136 | 136 | (1) For amounts that are due and payable on the last date of the amnesty period, an amount equal to 7.75 percent of the accrued interest payable under Section 6591 for the period beginning on the date in which the tax was due and ending on the last day of the amnesty period specified in Section 7067.1. | |
| 137 | 137 | ||
| 138 | 138 | (2) An amount equal to 7.75 percent of the interest computed under Section 6591 on any final amount, including final deficiencies and self-assessed amounts, for the period beginning on the date in which the tax was due and ending on the last day of the amnesty period specified in Section 7067.1. | |
| 139 | 139 | ||
| 140 | 140 | (b) The penalty imposed by this section is in addition to any other penalty imposed under this part. | |
| 141 | 141 | ||
| 142 | 142 | (c) Article 2 (commencing with Section 6481) of Chapter 5 does not apply with respect to the assessment or collection of any penalty imposed by subdivision (a). | |
| 143 | 143 | ||
| 144 | 144 | 7067.5. Any taxpayer that has an existing installment payment agreement under Section 6832 as of the start of the amnesty program, and that does not participate in the amnesty program, may not be subject to the penalty imposed under Section 7067.4. | |
| 145 | 145 | ||
| 146 | 146 | ||
| 147 | 147 | ||
| 148 | 148 | 7067.5. Any taxpayer that has an existing installment payment agreement under Section 6832 as of the start of the amnesty program, and that does not participate in the amnesty program, may not be subject to the penalty imposed under Section 7067.4. | |
| 149 | 149 | ||
| 150 | 150 | 7067.6. The department shall issue forms and instructions and take other actions needed to implement this article. The provisions contained in Section 19740.5, to the extent feasible and practical, shall also apply to the department. | |
| 151 | 151 | ||
| 152 | 152 | ||
| 153 | 153 | ||
| 154 | 154 | 7067.6. The department shall issue forms and instructions and take other actions needed to implement this article. The provisions contained in Section 19740.5, to the extent feasible and practical, shall also apply to the department. | |
| 155 | 155 | ||
| 156 | 156 | 7067.7. The Taxpayers Rights Advocate Office, in coordination with the department and the departments external affairs division, shall adequately publicize the tax amnesty program so as to maximize public awareness of the participation in the program. The department shall coordinate to the highest degree possible its publicity efforts and other actions taken in implementing this article with similar programs administered by the Franchise Tax Board. | |
| 157 | 157 | ||
| 158 | 158 | ||
| 159 | 159 | ||
| 160 | 160 | 7067.7. The Taxpayers Rights Advocate Office, in coordination with the department and the departments external affairs division, shall adequately publicize the tax amnesty program so as to maximize public awareness of the participation in the program. The department shall coordinate to the highest degree possible its publicity efforts and other actions taken in implementing this article with similar programs administered by the Franchise Tax Board. | |
| 161 | 161 | ||
| 162 | 162 | 7067.8. Subdivision (b) of Section 19740.6, to the extent feasible and practical, shall also apply to the department. | |
| 163 | 163 | ||
| 164 | 164 | ||
| 165 | 165 | ||
| 166 | 166 | 7067.8. Subdivision (b) of Section 19740.6, to the extent feasible and practical, shall also apply to the department. | |
| 167 | 167 | ||
| 168 | - | 7067.9. (a) A penalty may not be imposed under this article upon a showing by the taxpayer that there was reasonable cause for, and the taxpayer acted in good faith with respect to, that portion.(b)(1)The determination of whether a taxpayer acted with reasonable cause and in good faith under this section is made on a case-by-case basis, taking into account all pertinent facts and circumstances. The most important factor is the extent of the taxpayers effort to assess the taxpayers proper tax liability.(2)Circumstances that may indicate reasonable cause and good faith include an honest misunderstanding of fact or law that is reasonable in light of all of the facts and circumstances, including the experience, knowledge, and education of the taxpayer. An isolated computational or transcriptional error generally is not inconsistent with reasonable cause and good faith. Reliance on the advice of a professional tax advisor does not necessarily demonstrate reasonable cause and good faith. Reasonable cause and good faith is not necessarily indicated by reliance on facts that, unknown to the taxpayer, are incorrect. Reliance on professional tax advice, or other facts, however, constitutes reasonable cause and good faith if, under all the circumstances, the reliance was reasonable and the taxpayer acted in good faith. (3)A taxpayers reliance on erroneous information reported on a return indicates reasonable cause and good faith, provided the taxpayer did not know or have reason to know that the information was incorrect. A taxpayer knows, or has reason to know, that the information on a return is incorrect if the information is inconsistent with other information reported or otherwise furnished to the taxpayer, or with the taxpayers knowledge of the transaction. (4)All facts and circumstances shall be taken into account in determining whether a taxpayer has reasonably relied in good faith on advice, including the opinion of a professional tax advisor, as to the treatment of the taxpayer, or any entity, plan, or arrangement, under state tax law. For example, the taxpayers education, sophistication, and business experience will be relevant in determining whether the taxpayers reliance on written tax advice was reasonable and made in good faith.(5)Advice is any written communication, including, but not limited to, letters, electronic communications, such as emails and text messages, tax returns prepared by a professional tax advisor, or other written communications, setting forth the analysis or conclusion of a person, other than the taxpayer, provided to or for the benefit of the taxpayer and on which the taxpayer relies, directly or indirectly, with respect to the imposition of the Section 7067.4 amnesty penalty. (c) | |
| 168 | + | 7067.9. (a) A penalty may not be imposed under this article upon a showing by the taxpayer that there was reasonable cause for, and the taxpayer acted in good faith with respect to, that portion.(b) (1) The determination of whether a taxpayer acted with reasonable cause and in good faith under this section is made on a case-by-case basis, taking into account all pertinent facts and circumstances. The most important factor is the extent of the taxpayers effort to assess the taxpayers proper tax liability.(2) Circumstances that may indicate reasonable cause and good faith include an honest misunderstanding of fact or law that is reasonable in light of all of the facts and circumstances, including the experience, knowledge, and education of the taxpayer. An isolated computational or transcriptional error generally is not inconsistent with reasonable cause and good faith. Reliance on the advice of a professional tax advisor does not necessarily demonstrate reasonable cause and good faith. Reasonable cause and good faith is not necessarily indicated by reliance on facts that, unknown to the taxpayer, are incorrect. Reliance on professional tax advice, or other facts, however, constitutes reasonable cause and good faith if, under all the circumstances, the reliance was reasonable and the taxpayer acted in good faith. (3) A taxpayers reliance on erroneous information reported on a return indicates reasonable cause and good faith, provided the taxpayer did not know or have reason to know that the information was incorrect. A taxpayer knows, or has reason to know, that the information on a return is incorrect if the information is inconsistent with other information reported or otherwise furnished to the taxpayer, or with the taxpayers knowledge of the transaction. (4) All facts and circumstances shall be taken into account in determining whether a taxpayer has reasonably relied in good faith on advice, including the opinion of a professional tax advisor, as to the treatment of the taxpayer, or any entity, plan, or arrangement, under state tax law. For example, the taxpayers education, sophistication, and business experience will be relevant in determining whether the taxpayers reliance on written tax advice was reasonable and made in good faith.(5) Advice is any written communication, including, but not limited to, letters, electronic communications, such as emails and text messages, tax returns prepared by a professional tax advisor, or other written communications, setting forth the analysis or conclusion of a person, other than the taxpayer, provided to or for the benefit of the taxpayer and on which the taxpayer relies, directly or indirectly, with respect to the imposition of the Section 7067.4 amnesty penalty. (c) Taxpayers with amounts in dispute as of the start of the amnesty program, or subsequent to the closing of the amnesty period, including under audit, protest, litigation, or claim for refund, shall not be subject to the amnesty penalty imposed under Section 7067.4. | |
| 169 | 169 | ||
| 170 | 170 | ||
| 171 | 171 | ||
| 172 | 172 | 7067.9. (a) A penalty may not be imposed under this article upon a showing by the taxpayer that there was reasonable cause for, and the taxpayer acted in good faith with respect to, that portion. | |
| 173 | 173 | ||
| 174 | 174 | (b) (1) The determination of whether a taxpayer acted with reasonable cause and in good faith under this section is made on a case-by-case basis, taking into account all pertinent facts and circumstances. The most important factor is the extent of the taxpayers effort to assess the taxpayers proper tax liability. | |
| 175 | 175 | ||
| 176 | - | ||
| 177 | - | ||
| 178 | 176 | (2) Circumstances that may indicate reasonable cause and good faith include an honest misunderstanding of fact or law that is reasonable in light of all of the facts and circumstances, including the experience, knowledge, and education of the taxpayer. An isolated computational or transcriptional error generally is not inconsistent with reasonable cause and good faith. Reliance on the advice of a professional tax advisor does not necessarily demonstrate reasonable cause and good faith. Reasonable cause and good faith is not necessarily indicated by reliance on facts that, unknown to the taxpayer, are incorrect. Reliance on professional tax advice, or other facts, however, constitutes reasonable cause and good faith if, under all the circumstances, the reliance was reasonable and the taxpayer acted in good faith. | |
| 179 | - | ||
| 180 | - | ||
| 181 | 177 | ||
| 182 | 178 | (3) A taxpayers reliance on erroneous information reported on a return indicates reasonable cause and good faith, provided the taxpayer did not know or have reason to know that the information was incorrect. A taxpayer knows, or has reason to know, that the information on a return is incorrect if the information is inconsistent with other information reported or otherwise furnished to the taxpayer, or with the taxpayers knowledge of the transaction. | |
| 183 | 179 | ||
| 184 | - | ||
| 185 | - | ||
| 186 | 180 | (4) All facts and circumstances shall be taken into account in determining whether a taxpayer has reasonably relied in good faith on advice, including the opinion of a professional tax advisor, as to the treatment of the taxpayer, or any entity, plan, or arrangement, under state tax law. For example, the taxpayers education, sophistication, and business experience will be relevant in determining whether the taxpayers reliance on written tax advice was reasonable and made in good faith. | |
| 187 | - | ||
| 188 | - | ||
| 189 | 181 | ||
| 190 | 182 | (5) Advice is any written communication, including, but not limited to, letters, electronic communications, such as emails and text messages, tax returns prepared by a professional tax advisor, or other written communications, setting forth the analysis or conclusion of a person, other than the taxpayer, provided to or for the benefit of the taxpayer and on which the taxpayer relies, directly or indirectly, with respect to the imposition of the Section 7067.4 amnesty penalty. | |
| 191 | 183 | ||
| 184 | + | (c) Taxpayers with amounts in dispute as of the start of the amnesty program, or subsequent to the closing of the amnesty period, including under audit, protest, litigation, or claim for refund, shall not be subject to the amnesty penalty imposed under Section 7067.4. | |
| 192 | 185 | ||
| 193 | - | ||
| 194 | - | (c) | |
| 195 | - | ||
| 196 | - | ||
| 197 | - | ||
| 198 | - | (b) Taxpayers with amounts in dispute as of the start of the amnesty program, or subsequent to the closing of the amnesty period, including under audit, protest, litigation, or claim for refund, shall not be subject to the amnesty penalty imposed under Section 7067.4. 7067.4 with respect to those amounts. | |
| 199 | - | ||
| 200 | - | SEC. 3. Chapter 9.2 (commencing with Section 19740) is added to Part 10.2 of Division 2 of the Revenue and Taxation Code, to read: CHAPTER 9.2. California Tax Amnesty and Revenue Recovery Act 19740. The Franchise Tax Board shall administer a tax amnesty program for taxpayers subject to Part 10 (commencing with Section 17001) and Part 11 (commencing with Section 23001), as provided in this chapter.19740.1. The tax amnesty program shall be conducted during a two-month period beginning February 1, 2022, and ending March 31, 2022, inclusive, or during a timeframe ending no later than June 30, 2022, pursuant to Section 19740.3. September 1, 2022, and ending October 31, 2022, inclusive. The program shall apply to tax liabilities for taxable years beginning on or after January 1, 2020, and before January 1, 2021.19740.2. (a) For any taxpayer that meets each of the requirements of Section 19740.3, both of the following apply:(1) The Franchise Tax Board shall waive all unpaid penalties and fees imposed by this part for each the 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), a criminal action shall not 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, 2021, September 1, 2022, any of the following applies:(1) The taxpayer is on notice of a criminal investigation by a complaint having been filed against the taxpayer.(2) The taxpayer is under criminal investigation.(3) A criminal court proceeding has already been initiated.(c) This section shall not apply to any nonreported or underreported tax liability amounts attributable to tax shelter items that could have been reported under either the voluntary compliance initiative under Chapter 9.5 (commencing with Section 19751) or the Internal Revenue Services Offshore Voluntary Compliance Initiative described in Revenue Procedure 2003-11, or the Internal Revenue Services Voluntary Disclosure Program.(d) A refund or credit not shall not be granted 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 19740.3.(e) Notwithstanding Chapter 6 (commencing with Section 19301), a taxpayer may not file a claim for refund or credit for any amounts paid in connection with the tax amnesty program under this chapter.19740.3. (a) This chapter shall apply to any taxpayer who satisfies all of the following requirements:(1) During the tax amnesty program period specified in Section 19740.1, is eligible to participate in the tax amnesty program.(2) During the tax amnesty program period specified in Section 19740.1, files a completed amnesty application with the Franchise Tax Board, signed under penalty of perjury, electing to participate in the tax amnesty program.(3) Within 60 days after the conclusion of the tax amnesty period, does either both of the following:(A) (i) For any the taxable year eligible for the tax amnesty program where the taxpayer has not filed any required return, files a completed original tax return for that year.(ii) For any the taxable year eligible for the tax amnesty program 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 that 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 the taxable year for which amnesty is requested or applies for an installment payment agreement under subdivision (b).(4) 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 within 60 days after the conclusion of the tax amnesty period, the full amount due shall be treated as paid during the amnesty period.(5) 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 amnesty program.(b) (1) 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, 2022. December 31, 2023. (2) Any installment payment agreement authorized by this subdivision shall include interest on the outstanding amount due at the rate prescribed in Section 19521.(3) Failure by the taxpayer to fully comply with the terms of an installment payment agreement under this subdivision shall render the waiver of penalties and fees under Section 19740.2 null and void, unless the Franchise Tax Board determines that the failure was due to reasonable cause and not due to willful neglect.(4) In the case of any failure described under paragraph (3), 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 participation in the amnesty program will be available to as many taxpayers as possible without otherwise compromising the Franchise Tax Boards 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 program 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 19740.2. (d)(e) All revenues derived pursuant to subdivision (c) shall be subject to Sections 19602 and 19604.19740.4. 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.19740.5. (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 19733.(b) Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code does not apply to any standard, criterion, procedure, determination, rule, notice, or guideline established or issued by the Franchise Tax Board pursuant to this chapter.19740.6. (a) The Taxpayers Rights Advocates Advocate Office, in coordination with the Franchise Tax Board and the Franchise Tax Boards existing public outreach programs, shall adequately publicize the tax amnesty program so as to maximize public awareness and to make taxpayers aware of the program. (b) The Franchise Tax Board shall make reasonable efforts to identify taxpayer liabilities and, to the extent practicable, will send written notice to taxpayers of their eligibility for the tax amnesty program. 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 program, nor shall that failure be grounds for abating the penalty imposed under Section 19777.6.19740.7. Any taxpayer who has an existing installment payment agreement under Section 19008 as of the start of the amnesty program, and who does not participate in the amnesty program, may shall not be subject to the penalty imposed under Section 19777.6 with respect to amounts payable under that agreement.19740.8. (a) A penalty may shall not be imposed under this chapter upon a showing by the taxpayer that there was reasonable cause for, and the taxpayer acted in good faith with respect to, that portion.(b)(1)The determination of whether a taxpayer acted with reasonable cause and in good faith under this section is made on a case-by-case basis, taking into account all pertinent facts and circumstances. The most important factor is the extent of the taxpayers effort to assess the taxpayers proper tax liability.(2)Circumstances that may indicate reasonable cause and good faith include an honest misunderstanding of fact or law that is reasonable in light of all of the facts and circumstances, including the experience, knowledge, and education of the taxpayer. An isolated computational or transcriptional error generally is not inconsistent with reasonable cause and good faith. Reliance on an information return or on the advice of a professional tax advisor does not necessarily demonstrate reasonable cause and good faith. Reasonable cause and good faith is not necessarily indicated by reliance on facts that, unknown to the taxpayer, are incorrect. Reliance on an information return, professional advice, or other facts, however, constitutes reasonable cause and good faith if, under all the circumstances, that reliance was reasonable and the taxpayer acted in good faith. For example, reliance on erroneous information, such as an error relating to the cost or adjusted basis of property, the date property was placed in service, or the amount of opening or closing inventory, inadvertently included in data compiled by the various divisions of a multidivisional corporation or in financial books and records prepared by those divisions generally indicates reasonable cause and good faith, provided the corporation employed internal controls and procedures, reasonable under the circumstances, that were designed to identify such factual errors.(3)Reasonable cause and good faith ordinarily is not indicated by the mere fact that there is an appraisal of the value of property. Other factors to consider include the methodology and assumptions underlying the appraisal, the appraised value, the relationship between appraised value and purchase price, the circumstances under which the appraisal was obtained, and the appraisers relationship to the taxpayer or to the activity in which the property is used.(4)A taxpayers reliance on erroneous information reported on a Form W-2, Form 1099, or other information return indicates reasonable cause and good faith, provided the taxpayer did not know or have reason to know that the information was incorrect. A taxpayer knows, or has reason to know, that the information on an information return is incorrect if that information is inconsistent with other information reported or otherwise furnished to the taxpayer, or with the taxpayers knowledge of the transaction. This knowledge includes, for example, the taxpayers knowledge of the terms of the taxpayers employment relationship or of the rate of return on a payors obligation.(c)(1)All facts and circumstances shall be taken into account in determining whether a taxpayer has reasonably relied in good faith on advice, including the opinion of a professional tax advisor, as to the treatment of the taxpayer, or any entity, plan, or arrangement, under state or federal tax law. For example, the taxpayers education, sophistication, and business experience will be relevant in determining whether the taxpayers reliance on tax advice was reasonable and made in good faith. In no event will a taxpayer be considered to have reasonably relied in good faith on advice, including an opinion, unless the requirements of this paragraph are satisfied. The fact that these requirements are satisfied, however, will not necessarily establish that the taxpayer reasonably relied on the advice, including the opinion of a tax advisor, in good faith. For example, reliance may not be reasonable or in good faith if the taxpayer knew, or reasonably should have known, that the advisor lacked knowledge in the relevant aspects of state or federal tax law.(2)The advice must be based upon all pertinent facts and circumstances and the law as it relates to those facts and circumstances. For example, the advice must take into account the taxpayers purposes, and the relative weight of those purposes, for entering into a transaction and for structuring a transaction in a particular manner. In addition, the requirements of this paragraph are not satisfied if the taxpayer fails to disclose a fact that it knows, or reasonably should know, to be relevant to the proper tax treatment of an item.(3)The advice must not be based on unreasonable factual or legal assumptions, including assumptions as to future events, and must not unreasonably rely on the representations, statements, findings, or agreements of the taxpayer or any other person. For example, the advice must not be based upon a representation or assumption the taxpayer knows, or has reason to know, is unlikely to be true, such as an inaccurate representation or assumption as to the taxpayers purposes for entering into a transaction or for structuring a transaction in a particular manner.(4)A taxpayer may not rely on an opinion or advice that a regulation is invalid to establish that the taxpayer acted with reasonable cause and good faith unless the taxpayer adequately disclosed the position that the regulation in question is invalid.(5)Advice is any written communication, including, but not limited to, letters, electronic communications, such as emails and text messages, tax returns prepared by a professional tax advisor, or other written communication, setting forth the analysis or conclusion of a person, other than the taxpayer, provided to or for the benefit of the taxpayer and on which the taxpayer relies, directly or indirectly, with respect to the imposition of the Section 19777.6 amnesty penalty. (d)(b) Taxpayers with amounts in dispute as of the start of the amnesty program, or subsequent to the closing of the amnesty period, including under audit, protest, litigation, or claim for refund, shall not be subject to the amnesty penalty imposed under Section 19777.6. 19777.6 with respect to those amounts. | |
| 186 | + | SEC. 3. Chapter 9.2 (commencing with Section 19740) is added to Part 10.2 of Division 2 of the Revenue and Taxation Code, to read: CHAPTER 9.2. California Tax Amnesty and Revenue Recovery Act 19740. The Franchise Tax Board shall administer a tax amnesty program for taxpayers subject to Part 10 (commencing with Section 17001) and Part 11 (commencing with Section 23001), as provided in this chapter.19740.1. The tax amnesty program shall be conducted during a two-month period beginning February 1, 2022, and ending March 31, 2022, inclusive, or during a timeframe ending no later than June 30, 2022, pursuant to Section 19740.3. The program shall apply to tax liabilities for taxable years beginning before January 1, 2021.19740.2. (a) For any taxpayer that meets each of the requirements of Section 19740.3, both of the following 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), a criminal action shall not 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, 2021, any of the following applies:(1) The taxpayer is on notice of a criminal investigation by a complaint having been filed against the taxpayer.(2) The taxpayer is under criminal investigation.(3) A court proceeding has already been initiated.(c) This section shall not apply to any nonreported or underreported tax liability amounts attributable to tax shelter items that could have been reported under either the voluntary compliance initiative under Chapter 9.5 (commencing with Section 19751) or the Internal Revenue Services Offshore Voluntary Compliance Initiative described in Revenue Procedure 2003-11, or the Internal Revenue Services Voluntary Disclosure Program.(d) A refund or credit not shall be granted 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 19740.3.(e) Notwithstanding Chapter 6 (commencing with Section 19301), a taxpayer may not file a claim for refund or credit for any amounts paid in connection with the tax amnesty program under this chapter.19740.3. (a) This chapter shall apply to any taxpayer who satisfies all of the following requirements:(1) During the tax amnesty program period specified in Section 19740.1, is eligible to participate in the tax amnesty program.(2) During the tax amnesty program period specified in Section 19740.1, files a completed amnesty application with the Franchise Tax Board, signed under penalty of perjury, electing to participate in the tax amnesty program.(3) Within 60 days after the conclusion of the tax amnesty period, does either of the following:(A) (i) For any taxable year eligible for the tax amnesty program 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 program 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 that 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 subdivision (b).(4) 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 within 60 days after the conclusion of the tax amnesty period, the full amount due shall be treated as paid during the amnesty period.(5) 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 amnesty program.(b) (1) 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, 2022.(2) Any installment payment agreement authorized by this subdivision shall include interest on the outstanding amount due at the rate prescribed in Section 19521.(3) Failure by the taxpayer to fully comply with the terms of an installment payment agreement under this subdivision shall render the waiver of penalties and fees under Section 19740.2 null and void, unless the Franchise Tax Board determines that the failure was due to reasonable cause and not due to willful neglect.(4) In the case of any failure described under paragraph (3), 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 participation in the amnesty program will be available to as many taxpayers as possible without otherwise compromising the Franchise Tax Boards ability to enforce and collect the taxes imposed under Part 10 (commencing with Section 17001) and Part 11 (commencing with Section 23001).(d) All revenues derived pursuant to subdivision (c) shall be subject to Sections 19602 and 19604.19740.4. 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.19740.5. (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 19733.(b) Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code does not apply to any standard, criterion, procedure, determination, rule, notice, or guideline established or issued by the Franchise Tax Board pursuant to this chapter.19740.6. (a) The Taxpayers Rights Advocates Office, in coordination with the Franchise Tax Board and the Franchise Tax Boards existing public outreach programs, shall adequately publicize the tax amnesty program so as to maximize public awareness and to make taxpayers aware of the program. (b) The Franchise Tax Board shall make reasonable efforts to identify taxpayer liabilities and, to the extent practicable, will send written notice to taxpayers of their eligibility for the tax amnesty program. 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 program, nor shall that failure be grounds for abating the penalty imposed under Section 19777.6.19740.7. Any taxpayer who has an existing installment payment agreement under Section 19008 as of the start of the amnesty program, and who does not participate in the amnesty program, may not be subject to the penalty imposed under Section 19777.6 with respect to amounts payable under that agreement.19740.8. (a) A penalty may not be imposed under this chapter upon a showing by the taxpayer that there was reasonable cause for, and the taxpayer acted in good faith with respect to, that portion.(b) (1) The determination of whether a taxpayer acted with reasonable cause and in good faith under this section is made on a case-by-case basis, taking into account all pertinent facts and circumstances. The most important factor is the extent of the taxpayers effort to assess the taxpayers proper tax liability.(2) Circumstances that may indicate reasonable cause and good faith include an honest misunderstanding of fact or law that is reasonable in light of all of the facts and circumstances, including the experience, knowledge, and education of the taxpayer. An isolated computational or transcriptional error generally is not inconsistent with reasonable cause and good faith. Reliance on an information return or on the advice of a professional tax advisor does not necessarily demonstrate reasonable cause and good faith. Reasonable cause and good faith is not necessarily indicated by reliance on facts that, unknown to the taxpayer, are incorrect. Reliance on an information return, professional advice, or other facts, however, constitutes reasonable cause and good faith if, under all the circumstances, that reliance was reasonable and the taxpayer acted in good faith. For example, reliance on erroneous information, such as an error relating to the cost or adjusted basis of property, the date property was placed in service, or the amount of opening or closing inventory, inadvertently included in data compiled by the various divisions of a multidivisional corporation or in financial books and records prepared by those divisions generally indicates reasonable cause and good faith, provided the corporation employed internal controls and procedures, reasonable under the circumstances, that were designed to identify such factual errors.(3) Reasonable cause and good faith ordinarily is not indicated by the mere fact that there is an appraisal of the value of property. Other factors to consider include the methodology and assumptions underlying the appraisal, the appraised value, the relationship between appraised value and purchase price, the circumstances under which the appraisal was obtained, and the appraisers relationship to the taxpayer or to the activity in which the property is used.(4) A taxpayers reliance on erroneous information reported on a Form W-2, Form 1099, or other information return indicates reasonable cause and good faith, provided the taxpayer did not know or have reason to know that the information was incorrect. A taxpayer knows, or has reason to know, that the information on an information return is incorrect if that information is inconsistent with other information reported or otherwise furnished to the taxpayer, or with the taxpayers knowledge of the transaction. This knowledge includes, for example, the taxpayers knowledge of the terms of the taxpayers employment relationship or of the rate of return on a payors obligation.(c) (1) All facts and circumstances shall be taken into account in determining whether a taxpayer has reasonably relied in good faith on advice, including the opinion of a professional tax advisor, as to the treatment of the taxpayer, or any entity, plan, or arrangement, under state or federal tax law. For example, the taxpayers education, sophistication, and business experience will be relevant in determining whether the taxpayers reliance on tax advice was reasonable and made in good faith. In no event will a taxpayer be considered to have reasonably relied in good faith on advice, including an opinion, unless the requirements of this paragraph are satisfied. The fact that these requirements are satisfied, however, will not necessarily establish that the taxpayer reasonably relied on the advice, including the opinion of a tax advisor, in good faith. For example, reliance may not be reasonable or in good faith if the taxpayer knew, or reasonably should have known, that the advisor lacked knowledge in the relevant aspects of state or federal tax law.(2) The advice must be based upon all pertinent facts and circumstances and the law as it relates to those facts and circumstances. For example, the advice must take into account the taxpayers purposes, and the relative weight of those purposes, for entering into a transaction and for structuring a transaction in a particular manner. In addition, the requirements of this paragraph are not satisfied if the taxpayer fails to disclose a fact that it knows, or reasonably should know, to be relevant to the proper tax treatment of an item.(3) The advice must not be based on unreasonable factual or legal assumptions, including assumptions as to future events, and must not unreasonably rely on the representations, statements, findings, or agreements of the taxpayer or any other person. For example, the advice must not be based upon a representation or assumption the taxpayer knows, or has reason to know, is unlikely to be true, such as an inaccurate representation or assumption as to the taxpayers purposes for entering into a transaction or for structuring a transaction in a particular manner.(4) A taxpayer may not rely on an opinion or advice that a regulation is invalid to establish that the taxpayer acted with reasonable cause and good faith unless the taxpayer adequately disclosed the position that the regulation in question is invalid.(5) Advice is any written communication, including, but not limited to, letters, electronic communications, such as emails and text messages, tax returns prepared by a professional tax advisor, or other written communication, setting forth the analysis or conclusion of a person, other than the taxpayer, provided to or for the benefit of the taxpayer and on which the taxpayer relies, directly or indirectly, with respect to the imposition of the Section 19777.6 amnesty penalty. (d) Taxpayers with amounts in dispute as of the start of the amnesty program, or subsequent to the closing of the amnesty period, including under audit, protest, litigation, or claim for refund, shall not be subject to the amnesty penalty imposed under Section 19777.6. | |
| 201 | 187 | ||
| 202 | 188 | SEC. 3. Chapter 9.2 (commencing with Section 19740) is added to Part 10.2 of Division 2 of the Revenue and Taxation Code, to read: | |
| 203 | 189 | ||
| 204 | 190 | ### SEC. 3. | |
| 205 | 191 | ||
| 206 | - | CHAPTER 9.2. California Tax Amnesty and Revenue Recovery Act 19740. The Franchise Tax Board shall administer a tax amnesty program for taxpayers subject to Part 10 (commencing with Section 17001) and Part 11 (commencing with Section 23001), as provided in this chapter.19740.1. The tax amnesty program shall be conducted during a two-month period beginning February 1, 2022, and ending March 31, 2022, inclusive, or during a timeframe ending no later than June 30, 2022, pursuant to Section 19740.3. | |
| 192 | + | CHAPTER 9.2. California Tax Amnesty and Revenue Recovery Act 19740. The Franchise Tax Board shall administer a tax amnesty program for taxpayers subject to Part 10 (commencing with Section 17001) and Part 11 (commencing with Section 23001), as provided in this chapter.19740.1. The tax amnesty program shall be conducted during a two-month period beginning February 1, 2022, and ending March 31, 2022, inclusive, or during a timeframe ending no later than June 30, 2022, pursuant to Section 19740.3. The program shall apply to tax liabilities for taxable years beginning before January 1, 2021.19740.2. (a) For any taxpayer that meets each of the requirements of Section 19740.3, both of the following 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), a criminal action shall not 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, 2021, any of the following applies:(1) The taxpayer is on notice of a criminal investigation by a complaint having been filed against the taxpayer.(2) The taxpayer is under criminal investigation.(3) A court proceeding has already been initiated.(c) This section shall not apply to any nonreported or underreported tax liability amounts attributable to tax shelter items that could have been reported under either the voluntary compliance initiative under Chapter 9.5 (commencing with Section 19751) or the Internal Revenue Services Offshore Voluntary Compliance Initiative described in Revenue Procedure 2003-11, or the Internal Revenue Services Voluntary Disclosure Program.(d) A refund or credit not shall be granted 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 19740.3.(e) Notwithstanding Chapter 6 (commencing with Section 19301), a taxpayer may not file a claim for refund or credit for any amounts paid in connection with the tax amnesty program under this chapter.19740.3. (a) This chapter shall apply to any taxpayer who satisfies all of the following requirements:(1) During the tax amnesty program period specified in Section 19740.1, is eligible to participate in the tax amnesty program.(2) During the tax amnesty program period specified in Section 19740.1, files a completed amnesty application with the Franchise Tax Board, signed under penalty of perjury, electing to participate in the tax amnesty program.(3) Within 60 days after the conclusion of the tax amnesty period, does either of the following:(A) (i) For any taxable year eligible for the tax amnesty program 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 program 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 that 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 subdivision (b).(4) 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 within 60 days after the conclusion of the tax amnesty period, the full amount due shall be treated as paid during the amnesty period.(5) 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 amnesty program.(b) (1) 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, 2022.(2) Any installment payment agreement authorized by this subdivision shall include interest on the outstanding amount due at the rate prescribed in Section 19521.(3) Failure by the taxpayer to fully comply with the terms of an installment payment agreement under this subdivision shall render the waiver of penalties and fees under Section 19740.2 null and void, unless the Franchise Tax Board determines that the failure was due to reasonable cause and not due to willful neglect.(4) In the case of any failure described under paragraph (3), 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 participation in the amnesty program will be available to as many taxpayers as possible without otherwise compromising the Franchise Tax Boards ability to enforce and collect the taxes imposed under Part 10 (commencing with Section 17001) and Part 11 (commencing with Section 23001).(d) All revenues derived pursuant to subdivision (c) shall be subject to Sections 19602 and 19604.19740.4. 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.19740.5. (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 19733.(b) Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code does not apply to any standard, criterion, procedure, determination, rule, notice, or guideline established or issued by the Franchise Tax Board pursuant to this chapter.19740.6. (a) The Taxpayers Rights Advocates Office, in coordination with the Franchise Tax Board and the Franchise Tax Boards existing public outreach programs, shall adequately publicize the tax amnesty program so as to maximize public awareness and to make taxpayers aware of the program. (b) The Franchise Tax Board shall make reasonable efforts to identify taxpayer liabilities and, to the extent practicable, will send written notice to taxpayers of their eligibility for the tax amnesty program. 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 program, nor shall that failure be grounds for abating the penalty imposed under Section 19777.6.19740.7. Any taxpayer who has an existing installment payment agreement under Section 19008 as of the start of the amnesty program, and who does not participate in the amnesty program, may not be subject to the penalty imposed under Section 19777.6 with respect to amounts payable under that agreement.19740.8. (a) A penalty may not be imposed under this chapter upon a showing by the taxpayer that there was reasonable cause for, and the taxpayer acted in good faith with respect to, that portion.(b) (1) The determination of whether a taxpayer acted with reasonable cause and in good faith under this section is made on a case-by-case basis, taking into account all pertinent facts and circumstances. The most important factor is the extent of the taxpayers effort to assess the taxpayers proper tax liability.(2) Circumstances that may indicate reasonable cause and good faith include an honest misunderstanding of fact or law that is reasonable in light of all of the facts and circumstances, including the experience, knowledge, and education of the taxpayer. An isolated computational or transcriptional error generally is not inconsistent with reasonable cause and good faith. Reliance on an information return or on the advice of a professional tax advisor does not necessarily demonstrate reasonable cause and good faith. Reasonable cause and good faith is not necessarily indicated by reliance on facts that, unknown to the taxpayer, are incorrect. Reliance on an information return, professional advice, or other facts, however, constitutes reasonable cause and good faith if, under all the circumstances, that reliance was reasonable and the taxpayer acted in good faith. For example, reliance on erroneous information, such as an error relating to the cost or adjusted basis of property, the date property was placed in service, or the amount of opening or closing inventory, inadvertently included in data compiled by the various divisions of a multidivisional corporation or in financial books and records prepared by those divisions generally indicates reasonable cause and good faith, provided the corporation employed internal controls and procedures, reasonable under the circumstances, that were designed to identify such factual errors.(3) Reasonable cause and good faith ordinarily is not indicated by the mere fact that there is an appraisal of the value of property. Other factors to consider include the methodology and assumptions underlying the appraisal, the appraised value, the relationship between appraised value and purchase price, the circumstances under which the appraisal was obtained, and the appraisers relationship to the taxpayer or to the activity in which the property is used.(4) A taxpayers reliance on erroneous information reported on a Form W-2, Form 1099, or other information return indicates reasonable cause and good faith, provided the taxpayer did not know or have reason to know that the information was incorrect. A taxpayer knows, or has reason to know, that the information on an information return is incorrect if that information is inconsistent with other information reported or otherwise furnished to the taxpayer, or with the taxpayers knowledge of the transaction. This knowledge includes, for example, the taxpayers knowledge of the terms of the taxpayers employment relationship or of the rate of return on a payors obligation.(c) (1) All facts and circumstances shall be taken into account in determining whether a taxpayer has reasonably relied in good faith on advice, including the opinion of a professional tax advisor, as to the treatment of the taxpayer, or any entity, plan, or arrangement, under state or federal tax law. For example, the taxpayers education, sophistication, and business experience will be relevant in determining whether the taxpayers reliance on tax advice was reasonable and made in good faith. In no event will a taxpayer be considered to have reasonably relied in good faith on advice, including an opinion, unless the requirements of this paragraph are satisfied. The fact that these requirements are satisfied, however, will not necessarily establish that the taxpayer reasonably relied on the advice, including the opinion of a tax advisor, in good faith. For example, reliance may not be reasonable or in good faith if the taxpayer knew, or reasonably should have known, that the advisor lacked knowledge in the relevant aspects of state or federal tax law.(2) The advice must be based upon all pertinent facts and circumstances and the law as it relates to those facts and circumstances. For example, the advice must take into account the taxpayers purposes, and the relative weight of those purposes, for entering into a transaction and for structuring a transaction in a particular manner. In addition, the requirements of this paragraph are not satisfied if the taxpayer fails to disclose a fact that it knows, or reasonably should know, to be relevant to the proper tax treatment of an item.(3) The advice must not be based on unreasonable factual or legal assumptions, including assumptions as to future events, and must not unreasonably rely on the representations, statements, findings, or agreements of the taxpayer or any other person. For example, the advice must not be based upon a representation or assumption the taxpayer knows, or has reason to know, is unlikely to be true, such as an inaccurate representation or assumption as to the taxpayers purposes for entering into a transaction or for structuring a transaction in a particular manner.(4) A taxpayer may not rely on an opinion or advice that a regulation is invalid to establish that the taxpayer acted with reasonable cause and good faith unless the taxpayer adequately disclosed the position that the regulation in question is invalid.(5) Advice is any written communication, including, but not limited to, letters, electronic communications, such as emails and text messages, tax returns prepared by a professional tax advisor, or other written communication, setting forth the analysis or conclusion of a person, other than the taxpayer, provided to or for the benefit of the taxpayer and on which the taxpayer relies, directly or indirectly, with respect to the imposition of the Section 19777.6 amnesty penalty. (d) Taxpayers with amounts in dispute as of the start of the amnesty program, or subsequent to the closing of the amnesty period, including under audit, protest, litigation, or claim for refund, shall not be subject to the amnesty penalty imposed under Section 19777.6. | |
| 207 | 193 | ||
| 208 | - | CHAPTER 9.2. California Tax Amnesty and Revenue Recovery Act 19740. The Franchise Tax Board shall administer a tax amnesty program for taxpayers subject to Part 10 (commencing with Section 17001) and Part 11 (commencing with Section 23001), as provided in this chapter.19740.1. The tax amnesty program shall be conducted during a two-month period beginning February 1, 2022, and ending March 31, 2022, inclusive, or during a timeframe ending no later than June 30, 2022, pursuant to Section 19740.3. | |
| 194 | + | CHAPTER 9.2. California Tax Amnesty and Revenue Recovery Act 19740. The Franchise Tax Board shall administer a tax amnesty program for taxpayers subject to Part 10 (commencing with Section 17001) and Part 11 (commencing with Section 23001), as provided in this chapter.19740.1. The tax amnesty program shall be conducted during a two-month period beginning February 1, 2022, and ending March 31, 2022, inclusive, or during a timeframe ending no later than June 30, 2022, pursuant to Section 19740.3. The program shall apply to tax liabilities for taxable years beginning before January 1, 2021.19740.2. (a) For any taxpayer that meets each of the requirements of Section 19740.3, both of the following 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), a criminal action shall not 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, 2021, any of the following applies:(1) The taxpayer is on notice of a criminal investigation by a complaint having been filed against the taxpayer.(2) The taxpayer is under criminal investigation.(3) A court proceeding has already been initiated.(c) This section shall not apply to any nonreported or underreported tax liability amounts attributable to tax shelter items that could have been reported under either the voluntary compliance initiative under Chapter 9.5 (commencing with Section 19751) or the Internal Revenue Services Offshore Voluntary Compliance Initiative described in Revenue Procedure 2003-11, or the Internal Revenue Services Voluntary Disclosure Program.(d) A refund or credit not shall be granted 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 19740.3.(e) Notwithstanding Chapter 6 (commencing with Section 19301), a taxpayer may not file a claim for refund or credit for any amounts paid in connection with the tax amnesty program under this chapter.19740.3. (a) This chapter shall apply to any taxpayer who satisfies all of the following requirements:(1) During the tax amnesty program period specified in Section 19740.1, is eligible to participate in the tax amnesty program.(2) During the tax amnesty program period specified in Section 19740.1, files a completed amnesty application with the Franchise Tax Board, signed under penalty of perjury, electing to participate in the tax amnesty program.(3) Within 60 days after the conclusion of the tax amnesty period, does either of the following:(A) (i) For any taxable year eligible for the tax amnesty program 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 program 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 that 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 subdivision (b).(4) 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 within 60 days after the conclusion of the tax amnesty period, the full amount due shall be treated as paid during the amnesty period.(5) 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 amnesty program.(b) (1) 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, 2022.(2) Any installment payment agreement authorized by this subdivision shall include interest on the outstanding amount due at the rate prescribed in Section 19521.(3) Failure by the taxpayer to fully comply with the terms of an installment payment agreement under this subdivision shall render the waiver of penalties and fees under Section 19740.2 null and void, unless the Franchise Tax Board determines that the failure was due to reasonable cause and not due to willful neglect.(4) In the case of any failure described under paragraph (3), 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 participation in the amnesty program will be available to as many taxpayers as possible without otherwise compromising the Franchise Tax Boards ability to enforce and collect the taxes imposed under Part 10 (commencing with Section 17001) and Part 11 (commencing with Section 23001).(d) All revenues derived pursuant to subdivision (c) shall be subject to Sections 19602 and 19604.19740.4. 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.19740.5. (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 19733.(b) Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code does not apply to any standard, criterion, procedure, determination, rule, notice, or guideline established or issued by the Franchise Tax Board pursuant to this chapter.19740.6. (a) The Taxpayers Rights Advocates Office, in coordination with the Franchise Tax Board and the Franchise Tax Boards existing public outreach programs, shall adequately publicize the tax amnesty program so as to maximize public awareness and to make taxpayers aware of the program. (b) The Franchise Tax Board shall make reasonable efforts to identify taxpayer liabilities and, to the extent practicable, will send written notice to taxpayers of their eligibility for the tax amnesty program. 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 program, nor shall that failure be grounds for abating the penalty imposed under Section 19777.6.19740.7. Any taxpayer who has an existing installment payment agreement under Section 19008 as of the start of the amnesty program, and who does not participate in the amnesty program, may not be subject to the penalty imposed under Section 19777.6 with respect to amounts payable under that agreement.19740.8. (a) A penalty may not be imposed under this chapter upon a showing by the taxpayer that there was reasonable cause for, and the taxpayer acted in good faith with respect to, that portion.(b) (1) The determination of whether a taxpayer acted with reasonable cause and in good faith under this section is made on a case-by-case basis, taking into account all pertinent facts and circumstances. The most important factor is the extent of the taxpayers effort to assess the taxpayers proper tax liability.(2) Circumstances that may indicate reasonable cause and good faith include an honest misunderstanding of fact or law that is reasonable in light of all of the facts and circumstances, including the experience, knowledge, and education of the taxpayer. An isolated computational or transcriptional error generally is not inconsistent with reasonable cause and good faith. Reliance on an information return or on the advice of a professional tax advisor does not necessarily demonstrate reasonable cause and good faith. Reasonable cause and good faith is not necessarily indicated by reliance on facts that, unknown to the taxpayer, are incorrect. Reliance on an information return, professional advice, or other facts, however, constitutes reasonable cause and good faith if, under all the circumstances, that reliance was reasonable and the taxpayer acted in good faith. For example, reliance on erroneous information, such as an error relating to the cost or adjusted basis of property, the date property was placed in service, or the amount of opening or closing inventory, inadvertently included in data compiled by the various divisions of a multidivisional corporation or in financial books and records prepared by those divisions generally indicates reasonable cause and good faith, provided the corporation employed internal controls and procedures, reasonable under the circumstances, that were designed to identify such factual errors.(3) Reasonable cause and good faith ordinarily is not indicated by the mere fact that there is an appraisal of the value of property. Other factors to consider include the methodology and assumptions underlying the appraisal, the appraised value, the relationship between appraised value and purchase price, the circumstances under which the appraisal was obtained, and the appraisers relationship to the taxpayer or to the activity in which the property is used.(4) A taxpayers reliance on erroneous information reported on a Form W-2, Form 1099, or other information return indicates reasonable cause and good faith, provided the taxpayer did not know or have reason to know that the information was incorrect. A taxpayer knows, or has reason to know, that the information on an information return is incorrect if that information is inconsistent with other information reported or otherwise furnished to the taxpayer, or with the taxpayers knowledge of the transaction. This knowledge includes, for example, the taxpayers knowledge of the terms of the taxpayers employment relationship or of the rate of return on a payors obligation.(c) (1) All facts and circumstances shall be taken into account in determining whether a taxpayer has reasonably relied in good faith on advice, including the opinion of a professional tax advisor, as to the treatment of the taxpayer, or any entity, plan, or arrangement, under state or federal tax law. For example, the taxpayers education, sophistication, and business experience will be relevant in determining whether the taxpayers reliance on tax advice was reasonable and made in good faith. In no event will a taxpayer be considered to have reasonably relied in good faith on advice, including an opinion, unless the requirements of this paragraph are satisfied. The fact that these requirements are satisfied, however, will not necessarily establish that the taxpayer reasonably relied on the advice, including the opinion of a tax advisor, in good faith. For example, reliance may not be reasonable or in good faith if the taxpayer knew, or reasonably should have known, that the advisor lacked knowledge in the relevant aspects of state or federal tax law.(2) The advice must be based upon all pertinent facts and circumstances and the law as it relates to those facts and circumstances. For example, the advice must take into account the taxpayers purposes, and the relative weight of those purposes, for entering into a transaction and for structuring a transaction in a particular manner. In addition, the requirements of this paragraph are not satisfied if the taxpayer fails to disclose a fact that it knows, or reasonably should know, to be relevant to the proper tax treatment of an item.(3) The advice must not be based on unreasonable factual or legal assumptions, including assumptions as to future events, and must not unreasonably rely on the representations, statements, findings, or agreements of the taxpayer or any other person. For example, the advice must not be based upon a representation or assumption the taxpayer knows, or has reason to know, is unlikely to be true, such as an inaccurate representation or assumption as to the taxpayers purposes for entering into a transaction or for structuring a transaction in a particular manner.(4) A taxpayer may not rely on an opinion or advice that a regulation is invalid to establish that the taxpayer acted with reasonable cause and good faith unless the taxpayer adequately disclosed the position that the regulation in question is invalid.(5) Advice is any written communication, including, but not limited to, letters, electronic communications, such as emails and text messages, tax returns prepared by a professional tax advisor, or other written communication, setting forth the analysis or conclusion of a person, other than the taxpayer, provided to or for the benefit of the taxpayer and on which the taxpayer relies, directly or indirectly, with respect to the imposition of the Section 19777.6 amnesty penalty. (d) Taxpayers with amounts in dispute as of the start of the amnesty program, or subsequent to the closing of the amnesty period, including under audit, protest, litigation, or claim for refund, shall not be subject to the amnesty penalty imposed under Section 19777.6. | |
| 209 | 195 | ||
| 210 | 196 | CHAPTER 9.2. California Tax Amnesty and Revenue Recovery Act | |
| 211 | 197 | ||
| 212 | 198 | CHAPTER 9.2. California Tax Amnesty and Revenue Recovery Act | |
| 213 | 199 | ||
| 214 | 200 | 19740. The Franchise Tax Board shall administer a tax amnesty program for taxpayers subject to Part 10 (commencing with Section 17001) and Part 11 (commencing with Section 23001), as provided in this chapter. | |
| 215 | 201 | ||
| 216 | 202 | ||
| 217 | 203 | ||
| 218 | 204 | 19740. The Franchise Tax Board shall administer a tax amnesty program for taxpayers subject to Part 10 (commencing with Section 17001) and Part 11 (commencing with Section 23001), as provided in this chapter. | |
| 219 | 205 | ||
| 220 | - | 19740.1. The tax amnesty program shall be conducted during a two-month period beginning February 1, 2022, and ending March 31, 2022, inclusive, or during a timeframe ending no later than June 30, 2022, pursuant to Section 19740.3. | |
| 206 | + | 19740.1. The tax amnesty program shall be conducted during a two-month period beginning February 1, 2022, and ending March 31, 2022, inclusive, or during a timeframe ending no later than June 30, 2022, pursuant to Section 19740.3. The program shall apply to tax liabilities for taxable years beginning before January 1, 2021. | |
| 221 | 207 | ||
| 222 | 208 | ||
| 223 | 209 | ||
| 224 | - | 19740.1. The tax amnesty program shall be conducted during a two-month period beginning February 1, 2022, and ending March 31, 2022, inclusive, or during a timeframe ending no later than June 30, 2022, pursuant to Section 19740.3. | |
| 210 | + | 19740.1. The tax amnesty program shall be conducted during a two-month period beginning February 1, 2022, and ending March 31, 2022, inclusive, or during a timeframe ending no later than June 30, 2022, pursuant to Section 19740.3. The program shall apply to tax liabilities for taxable years beginning before January 1, 2021. | |
| 225 | 211 | ||
| 226 | - | 19740.2. (a) For any taxpayer that meets each of the requirements of Section 19740.3, both of the following apply:(1) The Franchise Tax Board shall waive all unpaid penalties and fees imposed by this part for each | |
| 212 | + | 19740.2. (a) For any taxpayer that meets each of the requirements of Section 19740.3, both of the following 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), a criminal action shall not 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, 2021, any of the following applies:(1) The taxpayer is on notice of a criminal investigation by a complaint having been filed against the taxpayer.(2) The taxpayer is under criminal investigation.(3) A court proceeding has already been initiated.(c) This section shall not apply to any nonreported or underreported tax liability amounts attributable to tax shelter items that could have been reported under either the voluntary compliance initiative under Chapter 9.5 (commencing with Section 19751) or the Internal Revenue Services Offshore Voluntary Compliance Initiative described in Revenue Procedure 2003-11, or the Internal Revenue Services Voluntary Disclosure Program.(d) A refund or credit not shall be granted 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 19740.3.(e) Notwithstanding Chapter 6 (commencing with Section 19301), a taxpayer may not file a claim for refund or credit for any amounts paid in connection with the tax amnesty program under this chapter. | |
| 227 | 213 | ||
| 228 | 214 | ||
| 229 | 215 | ||
| 230 | 216 | 19740.2. (a) For any taxpayer that meets each of the requirements of Section 19740.3, both of the following apply: | |
| 231 | 217 | ||
| 232 | - | (1) The Franchise Tax Board shall waive all unpaid penalties and fees imposed by this part for each | |
| 218 | + | (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. | |
| 233 | 219 | ||
| 234 | 220 | (2) Except as provided in subdivision (b), a criminal action shall not 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. | |
| 235 | 221 | ||
| 236 | - | (b) This chapter shall not apply to violations of this part, for which, as of February 1, 2021, | |
| 222 | + | (b) This chapter shall not apply to violations of this part, for which, as of February 1, 2021, any of the following applies: | |
| 237 | 223 | ||
| 238 | 224 | (1) The taxpayer is on notice of a criminal investigation by a complaint having been filed against the taxpayer. | |
| 239 | 225 | ||
| 240 | 226 | (2) The taxpayer is under criminal investigation. | |
| 241 | 227 | ||
| 242 | - | (3) A | |
| 228 | + | (3) A court proceeding has already been initiated. | |
| 243 | 229 | ||
| 244 | 230 | (c) This section shall not apply to any nonreported or underreported tax liability amounts attributable to tax shelter items that could have been reported under either the voluntary compliance initiative under Chapter 9.5 (commencing with Section 19751) or the Internal Revenue Services Offshore Voluntary Compliance Initiative described in Revenue Procedure 2003-11, or the Internal Revenue Services Voluntary Disclosure Program. | |
| 245 | 231 | ||
| 246 | - | (d) A refund or credit not shall | |
| 232 | + | (d) A refund or credit not shall be granted 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 19740.3. | |
| 247 | 233 | ||
| 248 | 234 | (e) Notwithstanding Chapter 6 (commencing with Section 19301), a taxpayer may not file a claim for refund or credit for any amounts paid in connection with the tax amnesty program under this chapter. | |
| 249 | 235 | ||
| 250 | - | 19740.3. (a) This chapter shall apply to any taxpayer who satisfies all of the following requirements:(1) During the tax amnesty program period specified in Section 19740.1, is eligible to participate in the tax amnesty program.(2) During the tax amnesty program period specified in Section 19740.1, files a completed amnesty application with the Franchise Tax Board, signed under penalty of perjury, electing to participate in the tax amnesty program.(3) Within 60 days after the conclusion of the tax amnesty period, does either | |
| 236 | + | 19740.3. (a) This chapter shall apply to any taxpayer who satisfies all of the following requirements:(1) During the tax amnesty program period specified in Section 19740.1, is eligible to participate in the tax amnesty program.(2) During the tax amnesty program period specified in Section 19740.1, files a completed amnesty application with the Franchise Tax Board, signed under penalty of perjury, electing to participate in the tax amnesty program.(3) Within 60 days after the conclusion of the tax amnesty period, does either of the following:(A) (i) For any taxable year eligible for the tax amnesty program 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 program 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 that 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 subdivision (b).(4) 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 within 60 days after the conclusion of the tax amnesty period, the full amount due shall be treated as paid during the amnesty period.(5) 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 amnesty program.(b) (1) 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, 2022.(2) Any installment payment agreement authorized by this subdivision shall include interest on the outstanding amount due at the rate prescribed in Section 19521.(3) Failure by the taxpayer to fully comply with the terms of an installment payment agreement under this subdivision shall render the waiver of penalties and fees under Section 19740.2 null and void, unless the Franchise Tax Board determines that the failure was due to reasonable cause and not due to willful neglect.(4) In the case of any failure described under paragraph (3), 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 participation in the amnesty program will be available to as many taxpayers as possible without otherwise compromising the Franchise Tax Boards ability to enforce and collect the taxes imposed under Part 10 (commencing with Section 17001) and Part 11 (commencing with Section 23001).(d) All revenues derived pursuant to subdivision (c) shall be subject to Sections 19602 and 19604. | |
| 251 | 237 | ||
| 252 | 238 | ||
| 253 | 239 | ||
| 254 | 240 | 19740.3. (a) This chapter shall apply to any taxpayer who satisfies all of the following requirements: | |
| 255 | 241 | ||
| 256 | 242 | (1) During the tax amnesty program period specified in Section 19740.1, is eligible to participate in the tax amnesty program. | |
| 257 | 243 | ||
| 258 | 244 | (2) During the tax amnesty program period specified in Section 19740.1, files a completed amnesty application with the Franchise Tax Board, signed under penalty of perjury, electing to participate in the tax amnesty program. | |
| 259 | 245 | ||
| 260 | - | (3) Within 60 days after the conclusion of the tax amnesty period, does either | |
| 246 | + | (3) Within 60 days after the conclusion of the tax amnesty period, does either of the following: | |
| 261 | 247 | ||
| 262 | - | (A) (i) For any | |
| 248 | + | (A) (i) For any taxable year eligible for the tax amnesty program where the taxpayer has not filed any required return, files a completed original tax return for that year. | |
| 263 | 249 | ||
| 264 | - | (ii) For any | |
| 250 | + | (ii) For any taxable year eligible for the tax amnesty program where the taxpayer filed a return but underreported tax liability on that return, files an amended return for that year. | |
| 265 | 251 | ||
| 266 | - | (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 that 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 | |
| 252 | + | (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 that 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 subdivision (b). | |
| 267 | 253 | ||
| 268 | 254 | (4) 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 within 60 days after the conclusion of the tax amnesty period, the full amount due shall be treated as paid during the amnesty period. | |
| 269 | 255 | ||
| 270 | 256 | (5) 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 amnesty program. | |
| 271 | 257 | ||
| 272 | - | (b) (1) 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, 2022. | |
| 258 | + | (b) (1) 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, 2022. | |
| 273 | 259 | ||
| 274 | 260 | (2) Any installment payment agreement authorized by this subdivision shall include interest on the outstanding amount due at the rate prescribed in Section 19521. | |
| 275 | 261 | ||
| 276 | 262 | (3) Failure by the taxpayer to fully comply with the terms of an installment payment agreement under this subdivision shall render the waiver of penalties and fees under Section 19740.2 null and void, unless the Franchise Tax Board determines that the failure was due to reasonable cause and not due to willful neglect. | |
| 277 | 263 | ||
| 278 | 264 | (4) In the case of any failure described under paragraph (3), the total amount of tax, interest, fees, and all penalties shall become immediately due and payable. | |
| 279 | 265 | ||
| 280 | 266 | (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. | |
| 281 | 267 | ||
| 282 | 268 | (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 participation in the amnesty program will be available to as many taxpayers as possible without otherwise compromising the Franchise Tax Boards ability to enforce and collect the taxes imposed under Part 10 (commencing with Section 17001) and Part 11 (commencing with Section 23001). | |
| 283 | 269 | ||
| 284 | - | (d) Upon the conclusion of the tax amnesty program 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 19740.2. | |
| 285 | - | ||
| 286 | - | (d) | |
| 287 | - | ||
| 288 | - | ||
| 289 | - | ||
| 290 | - | (e) All revenues derived pursuant to subdivision (c) shall be subject to Sections 19602 and 19604. | |
| 270 | + | (d) All revenues derived pursuant to subdivision (c) shall be subject to Sections 19602 and 19604. | |
| 291 | 271 | ||
| 292 | 272 | 19740.4. 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. | |
| 293 | 273 | ||
| 294 | 274 | ||
| 295 | 275 | ||
| 296 | 276 | 19740.4. 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. | |
| 297 | 277 | ||
| 298 | 278 | 19740.5. (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 19733.(b) Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code does not apply to any standard, criterion, procedure, determination, rule, notice, or guideline established or issued by the Franchise Tax Board pursuant to this chapter. | |
| 299 | 279 | ||
| 300 | 280 | ||
| 301 | 281 | ||
| 302 | 282 | 19740.5. (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 19733. | |
| 303 | 283 | ||
| 304 | 284 | (b) Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code does not apply to any standard, criterion, procedure, determination, rule, notice, or guideline established or issued by the Franchise Tax Board pursuant to this chapter. | |
| 305 | 285 | ||
| 306 | - | 19740.6. (a) The Taxpayers Rights Advocates | |
| 286 | + | 19740.6. (a) The Taxpayers Rights Advocates Office, in coordination with the Franchise Tax Board and the Franchise Tax Boards existing public outreach programs, shall adequately publicize the tax amnesty program so as to maximize public awareness and to make taxpayers aware of the program. (b) The Franchise Tax Board shall make reasonable efforts to identify taxpayer liabilities and, to the extent practicable, will send written notice to taxpayers of their eligibility for the tax amnesty program. 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 program, nor shall that failure be grounds for abating the penalty imposed under Section 19777.6. | |
| 307 | 287 | ||
| 308 | 288 | ||
| 309 | 289 | ||
| 310 | - | 19740.6. (a) The Taxpayers Rights Advocates | |
| 290 | + | 19740.6. (a) The Taxpayers Rights Advocates Office, in coordination with the Franchise Tax Board and the Franchise Tax Boards existing public outreach programs, shall adequately publicize the tax amnesty program so as to maximize public awareness and to make taxpayers aware of the program. | |
| 311 | 291 | ||
| 312 | 292 | (b) The Franchise Tax Board shall make reasonable efforts to identify taxpayer liabilities and, to the extent practicable, will send written notice to taxpayers of their eligibility for the tax amnesty program. 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 program, nor shall that failure be grounds for abating the penalty imposed under Section 19777.6. | |
| 313 | 293 | ||
| 314 | - | 19740.7. Any taxpayer who has an existing installment payment agreement under Section 19008 as of the start of the amnesty program, and who does not participate in the amnesty program, may | |
| 294 | + | 19740.7. Any taxpayer who has an existing installment payment agreement under Section 19008 as of the start of the amnesty program, and who does not participate in the amnesty program, may not be subject to the penalty imposed under Section 19777.6 with respect to amounts payable under that agreement. | |
| 315 | 295 | ||
| 316 | 296 | ||
| 317 | 297 | ||
| 318 | - | 19740.7. Any taxpayer who has an existing installment payment agreement under Section 19008 as of the start of the amnesty program, and who does not participate in the amnesty program, may | |
| 298 | + | 19740.7. Any taxpayer who has an existing installment payment agreement under Section 19008 as of the start of the amnesty program, and who does not participate in the amnesty program, may not be subject to the penalty imposed under Section 19777.6 with respect to amounts payable under that agreement. | |
| 319 | 299 | ||
| 320 | - | 19740.8. (a) A penalty may | |
| 300 | + | 19740.8. (a) A penalty may not be imposed under this chapter upon a showing by the taxpayer that there was reasonable cause for, and the taxpayer acted in good faith with respect to, that portion.(b) (1) The determination of whether a taxpayer acted with reasonable cause and in good faith under this section is made on a case-by-case basis, taking into account all pertinent facts and circumstances. The most important factor is the extent of the taxpayers effort to assess the taxpayers proper tax liability.(2) Circumstances that may indicate reasonable cause and good faith include an honest misunderstanding of fact or law that is reasonable in light of all of the facts and circumstances, including the experience, knowledge, and education of the taxpayer. An isolated computational or transcriptional error generally is not inconsistent with reasonable cause and good faith. Reliance on an information return or on the advice of a professional tax advisor does not necessarily demonstrate reasonable cause and good faith. Reasonable cause and good faith is not necessarily indicated by reliance on facts that, unknown to the taxpayer, are incorrect. Reliance on an information return, professional advice, or other facts, however, constitutes reasonable cause and good faith if, under all the circumstances, that reliance was reasonable and the taxpayer acted in good faith. For example, reliance on erroneous information, such as an error relating to the cost or adjusted basis of property, the date property was placed in service, or the amount of opening or closing inventory, inadvertently included in data compiled by the various divisions of a multidivisional corporation or in financial books and records prepared by those divisions generally indicates reasonable cause and good faith, provided the corporation employed internal controls and procedures, reasonable under the circumstances, that were designed to identify such factual errors.(3) Reasonable cause and good faith ordinarily is not indicated by the mere fact that there is an appraisal of the value of property. Other factors to consider include the methodology and assumptions underlying the appraisal, the appraised value, the relationship between appraised value and purchase price, the circumstances under which the appraisal was obtained, and the appraisers relationship to the taxpayer or to the activity in which the property is used.(4) A taxpayers reliance on erroneous information reported on a Form W-2, Form 1099, or other information return indicates reasonable cause and good faith, provided the taxpayer did not know or have reason to know that the information was incorrect. A taxpayer knows, or has reason to know, that the information on an information return is incorrect if that information is inconsistent with other information reported or otherwise furnished to the taxpayer, or with the taxpayers knowledge of the transaction. This knowledge includes, for example, the taxpayers knowledge of the terms of the taxpayers employment relationship or of the rate of return on a payors obligation.(c) (1) All facts and circumstances shall be taken into account in determining whether a taxpayer has reasonably relied in good faith on advice, including the opinion of a professional tax advisor, as to the treatment of the taxpayer, or any entity, plan, or arrangement, under state or federal tax law. For example, the taxpayers education, sophistication, and business experience will be relevant in determining whether the taxpayers reliance on tax advice was reasonable and made in good faith. In no event will a taxpayer be considered to have reasonably relied in good faith on advice, including an opinion, unless the requirements of this paragraph are satisfied. The fact that these requirements are satisfied, however, will not necessarily establish that the taxpayer reasonably relied on the advice, including the opinion of a tax advisor, in good faith. For example, reliance may not be reasonable or in good faith if the taxpayer knew, or reasonably should have known, that the advisor lacked knowledge in the relevant aspects of state or federal tax law.(2) The advice must be based upon all pertinent facts and circumstances and the law as it relates to those facts and circumstances. For example, the advice must take into account the taxpayers purposes, and the relative weight of those purposes, for entering into a transaction and for structuring a transaction in a particular manner. In addition, the requirements of this paragraph are not satisfied if the taxpayer fails to disclose a fact that it knows, or reasonably should know, to be relevant to the proper tax treatment of an item.(3) The advice must not be based on unreasonable factual or legal assumptions, including assumptions as to future events, and must not unreasonably rely on the representations, statements, findings, or agreements of the taxpayer or any other person. For example, the advice must not be based upon a representation or assumption the taxpayer knows, or has reason to know, is unlikely to be true, such as an inaccurate representation or assumption as to the taxpayers purposes for entering into a transaction or for structuring a transaction in a particular manner.(4) A taxpayer may not rely on an opinion or advice that a regulation is invalid to establish that the taxpayer acted with reasonable cause and good faith unless the taxpayer adequately disclosed the position that the regulation in question is invalid.(5) Advice is any written communication, including, but not limited to, letters, electronic communications, such as emails and text messages, tax returns prepared by a professional tax advisor, or other written communication, setting forth the analysis or conclusion of a person, other than the taxpayer, provided to or for the benefit of the taxpayer and on which the taxpayer relies, directly or indirectly, with respect to the imposition of the Section 19777.6 amnesty penalty. (d) Taxpayers with amounts in dispute as of the start of the amnesty program, or subsequent to the closing of the amnesty period, including under audit, protest, litigation, or claim for refund, shall not be subject to the amnesty penalty imposed under Section 19777.6. | |
| 321 | 301 | ||
| 322 | 302 | ||
| 323 | 303 | ||
| 324 | - | 19740.8. (a) A penalty may | |
| 304 | + | 19740.8. (a) A penalty may not be imposed under this chapter upon a showing by the taxpayer that there was reasonable cause for, and the taxpayer acted in good faith with respect to, that portion. | |
| 325 | 305 | ||
| 326 | 306 | (b) (1) The determination of whether a taxpayer acted with reasonable cause and in good faith under this section is made on a case-by-case basis, taking into account all pertinent facts and circumstances. The most important factor is the extent of the taxpayers effort to assess the taxpayers proper tax liability. | |
| 327 | 307 | ||
| 328 | - | ||
| 329 | - | ||
| 330 | 308 | (2) Circumstances that may indicate reasonable cause and good faith include an honest misunderstanding of fact or law that is reasonable in light of all of the facts and circumstances, including the experience, knowledge, and education of the taxpayer. An isolated computational or transcriptional error generally is not inconsistent with reasonable cause and good faith. Reliance on an information return or on the advice of a professional tax advisor does not necessarily demonstrate reasonable cause and good faith. Reasonable cause and good faith is not necessarily indicated by reliance on facts that, unknown to the taxpayer, are incorrect. Reliance on an information return, professional advice, or other facts, however, constitutes reasonable cause and good faith if, under all the circumstances, that reliance was reasonable and the taxpayer acted in good faith. For example, reliance on erroneous information, such as an error relating to the cost or adjusted basis of property, the date property was placed in service, or the amount of opening or closing inventory, inadvertently included in data compiled by the various divisions of a multidivisional corporation or in financial books and records prepared by those divisions generally indicates reasonable cause and good faith, provided the corporation employed internal controls and procedures, reasonable under the circumstances, that were designed to identify such factual errors. | |
| 331 | - | ||
| 332 | - | ||
| 333 | 309 | ||
| 334 | 310 | (3) Reasonable cause and good faith ordinarily is not indicated by the mere fact that there is an appraisal of the value of property. Other factors to consider include the methodology and assumptions underlying the appraisal, the appraised value, the relationship between appraised value and purchase price, the circumstances under which the appraisal was obtained, and the appraisers relationship to the taxpayer or to the activity in which the property is used. | |
| 335 | 311 | ||
| 336 | - | ||
| 337 | - | ||
| 338 | 312 | (4) A taxpayers reliance on erroneous information reported on a Form W-2, Form 1099, or other information return indicates reasonable cause and good faith, provided the taxpayer did not know or have reason to know that the information was incorrect. A taxpayer knows, or has reason to know, that the information on an information return is incorrect if that information is inconsistent with other information reported or otherwise furnished to the taxpayer, or with the taxpayers knowledge of the transaction. This knowledge includes, for example, the taxpayers knowledge of the terms of the taxpayers employment relationship or of the rate of return on a payors obligation. | |
| 339 | - | ||
| 340 | - | ||
| 341 | 313 | ||
| 342 | 314 | (c) (1) All facts and circumstances shall be taken into account in determining whether a taxpayer has reasonably relied in good faith on advice, including the opinion of a professional tax advisor, as to the treatment of the taxpayer, or any entity, plan, or arrangement, under state or federal tax law. For example, the taxpayers education, sophistication, and business experience will be relevant in determining whether the taxpayers reliance on tax advice was reasonable and made in good faith. In no event will a taxpayer be considered to have reasonably relied in good faith on advice, including an opinion, unless the requirements of this paragraph are satisfied. The fact that these requirements are satisfied, however, will not necessarily establish that the taxpayer reasonably relied on the advice, including the opinion of a tax advisor, in good faith. For example, reliance may not be reasonable or in good faith if the taxpayer knew, or reasonably should have known, that the advisor lacked knowledge in the relevant aspects of state or federal tax law. | |
| 343 | 315 | ||
| 344 | - | ||
| 345 | - | ||
| 346 | 316 | (2) The advice must be based upon all pertinent facts and circumstances and the law as it relates to those facts and circumstances. For example, the advice must take into account the taxpayers purposes, and the relative weight of those purposes, for entering into a transaction and for structuring a transaction in a particular manner. In addition, the requirements of this paragraph are not satisfied if the taxpayer fails to disclose a fact that it knows, or reasonably should know, to be relevant to the proper tax treatment of an item. | |
| 347 | - | ||
| 348 | - | ||
| 349 | 317 | ||
| 350 | 318 | (3) The advice must not be based on unreasonable factual or legal assumptions, including assumptions as to future events, and must not unreasonably rely on the representations, statements, findings, or agreements of the taxpayer or any other person. For example, the advice must not be based upon a representation or assumption the taxpayer knows, or has reason to know, is unlikely to be true, such as an inaccurate representation or assumption as to the taxpayers purposes for entering into a transaction or for structuring a transaction in a particular manner. | |
| 351 | 319 | ||
| 352 | - | ||
| 353 | - | ||
| 354 | 320 | (4) A taxpayer may not rely on an opinion or advice that a regulation is invalid to establish that the taxpayer acted with reasonable cause and good faith unless the taxpayer adequately disclosed the position that the regulation in question is invalid. | |
| 355 | - | ||
| 356 | - | ||
| 357 | 321 | ||
| 358 | 322 | (5) Advice is any written communication, including, but not limited to, letters, electronic communications, such as emails and text messages, tax returns prepared by a professional tax advisor, or other written communication, setting forth the analysis or conclusion of a person, other than the taxpayer, provided to or for the benefit of the taxpayer and on which the taxpayer relies, directly or indirectly, with respect to the imposition of the Section 19777.6 amnesty penalty. | |
| 359 | 323 | ||
| 324 | + | (d) Taxpayers with amounts in dispute as of the start of the amnesty program, or subsequent to the closing of the amnesty period, including under audit, protest, litigation, or claim for refund, shall not be subject to the amnesty penalty imposed under Section 19777.6. | |
| 360 | 325 | ||
| 361 | - | ||
| 362 | - | (d) | |
| 363 | - | ||
| 364 | - | ||
| 365 | - | ||
| 366 | - | (b) Taxpayers with amounts in dispute as of the start of the amnesty program, or subsequent to the closing of the amnesty period, including under audit, protest, litigation, or claim for refund, shall not be subject to the amnesty penalty imposed under Section 19777.6. 19777.6 with respect to those amounts. | |
| 367 | - | ||
| 368 | - | SEC. 4. Section 19777.6 is added to the Revenue and Taxation Code, to read:19777.6. (a) There shall be added to the tax for each the taxable year for which amnesty could have been requested:(1) For amounts that are due and payable on the last day of the amnesty period, an amount equal to 7.75 percent of the accrued interest payable under Section 19101 for the period beginning on the last date prescribed by law for the payment of that tax (determined without regard to extensions) and ending on the last day of the amnesty period specified in Section 19740.1.(2) For amounts that become due and payable after the last date of the amnesty period, an amount equal to 7.75 percent of the interest computed under Section 19101 on any final amount, including final deficiencies and self-assessed amounts, for the period beginning on the last date prescribed by law for the payment of the tax for the year of the deficiency, determined without regard to extensions, and ending on the last day of the amnesty period specified in Section 19740.1.(3) For purposes of paragraph (2), Sections 19107, 19108, 19110, and 19113 shall apply in determining the amount computed under Section 19101.(4) For purposes of this section, due and payable shall have the same meaning as in Section 19221.(b) The penalty imposed by this section is in addition to any other penalty imposed under Part 10 (commencing with Section 17001), Part 11 (commencing with Section 23001), or this part.(c) This section does not apply to any amounts that are treated as paid during the amnesty program period under paragraph (4) of subdivision (a) of Section 19740.3 or paragraph (1) of subdivision (b) of Section 19740.3.(d) Article 3 (commencing with Section 19031), (relating to deficiency assessments) shall not apply with respect to the assessment or collection of any penalty imposed by subdivision (a).(e) (1) Notwithstanding Chapter 6 (commencing with Section 19301), a taxpayer may not file a claim for refund or credit for any amounts paid in connection with the penalty imposed in subdivision (a), except as provided in paragraph (2).(2) A taxpayer may file a claim for refund for any amounts paid to satisfy a penalty imposed under subdivision (a) on the grounds that the amount of the penalty was not properly computed by the Franchise Tax Board. | |
| 326 | + | SEC. 4. Section 19777.6 is added to the Revenue and Taxation Code, to read:19777.6. (a) There shall be added to the tax for each taxable year for which amnesty could have been requested:(1) For amounts that are due and payable on the last day of the amnesty period, an amount equal to 7.75 percent of the accrued interest payable under Section 19101 for the period beginning on the last date prescribed by law for the payment of that tax (determined without regard to extensions) and ending on the last day of the amnesty period specified in Section 19740.1.(2) For amounts that become due and payable after the last date of the amnesty period, an amount equal to 7.75 percent of the interest computed under Section 19101 on any final amount, including final deficiencies and self-assessed amounts, for the period beginning on the last date prescribed by law for the payment of the tax for the year of the deficiency, determined without regard to extensions, and ending on the last day of the amnesty period specified in Section 19740.1.(3) For purposes of paragraph (2), Sections 19107, 19108, 19110, and 19113 shall apply in determining the amount computed under Section 19101.(b) The penalty imposed by this section is in addition to any other penalty imposed under Part 10 (commencing with Section 17001), Part 11 (commencing with Section 23001), or this part.(c) This section does not apply to any amounts that are treated as paid during the amnesty program period under paragraph (4) of subdivision (a) of Section 19740.3 or paragraph (1) of subdivision (b) of Section 19740.3.(d) Article 3 (commencing with Section 19031), (relating to deficiency assessments) shall not apply with respect to the assessment or collection of any penalty imposed by subdivision (a).(e) (1) Notwithstanding Chapter 6 (commencing with Section 19301), a taxpayer may not file a claim for refund or credit for any amounts paid in connection with the penalty imposed in subdivision (a), except as provided in paragraph (2).(2) A taxpayer may file a claim for refund for any amounts paid to satisfy a penalty imposed under subdivision (a) on the grounds that the amount of the penalty was not properly computed by the Franchise Tax Board. | |
| 369 | 327 | ||
| 370 | 328 | SEC. 4. Section 19777.6 is added to the Revenue and Taxation Code, to read: | |
| 371 | 329 | ||
| 372 | 330 | ### SEC. 4. | |
| 373 | 331 | ||
| 374 | - | 19777.6. (a) There shall be added to the tax for each | |
| 332 | + | 19777.6. (a) There shall be added to the tax for each taxable year for which amnesty could have been requested:(1) For amounts that are due and payable on the last day of the amnesty period, an amount equal to 7.75 percent of the accrued interest payable under Section 19101 for the period beginning on the last date prescribed by law for the payment of that tax (determined without regard to extensions) and ending on the last day of the amnesty period specified in Section 19740.1.(2) For amounts that become due and payable after the last date of the amnesty period, an amount equal to 7.75 percent of the interest computed under Section 19101 on any final amount, including final deficiencies and self-assessed amounts, for the period beginning on the last date prescribed by law for the payment of the tax for the year of the deficiency, determined without regard to extensions, and ending on the last day of the amnesty period specified in Section 19740.1.(3) For purposes of paragraph (2), Sections 19107, 19108, 19110, and 19113 shall apply in determining the amount computed under Section 19101.(b) The penalty imposed by this section is in addition to any other penalty imposed under Part 10 (commencing with Section 17001), Part 11 (commencing with Section 23001), or this part.(c) This section does not apply to any amounts that are treated as paid during the amnesty program period under paragraph (4) of subdivision (a) of Section 19740.3 or paragraph (1) of subdivision (b) of Section 19740.3.(d) Article 3 (commencing with Section 19031), (relating to deficiency assessments) shall not apply with respect to the assessment or collection of any penalty imposed by subdivision (a).(e) (1) Notwithstanding Chapter 6 (commencing with Section 19301), a taxpayer may not file a claim for refund or credit for any amounts paid in connection with the penalty imposed in subdivision (a), except as provided in paragraph (2).(2) A taxpayer may file a claim for refund for any amounts paid to satisfy a penalty imposed under subdivision (a) on the grounds that the amount of the penalty was not properly computed by the Franchise Tax Board. | |
| 375 | 333 | ||
| 376 | - | 19777.6. (a) There shall be added to the tax for each | |
| 334 | + | 19777.6. (a) There shall be added to the tax for each taxable year for which amnesty could have been requested:(1) For amounts that are due and payable on the last day of the amnesty period, an amount equal to 7.75 percent of the accrued interest payable under Section 19101 for the period beginning on the last date prescribed by law for the payment of that tax (determined without regard to extensions) and ending on the last day of the amnesty period specified in Section 19740.1.(2) For amounts that become due and payable after the last date of the amnesty period, an amount equal to 7.75 percent of the interest computed under Section 19101 on any final amount, including final deficiencies and self-assessed amounts, for the period beginning on the last date prescribed by law for the payment of the tax for the year of the deficiency, determined without regard to extensions, and ending on the last day of the amnesty period specified in Section 19740.1.(3) For purposes of paragraph (2), Sections 19107, 19108, 19110, and 19113 shall apply in determining the amount computed under Section 19101.(b) The penalty imposed by this section is in addition to any other penalty imposed under Part 10 (commencing with Section 17001), Part 11 (commencing with Section 23001), or this part.(c) This section does not apply to any amounts that are treated as paid during the amnesty program period under paragraph (4) of subdivision (a) of Section 19740.3 or paragraph (1) of subdivision (b) of Section 19740.3.(d) Article 3 (commencing with Section 19031), (relating to deficiency assessments) shall not apply with respect to the assessment or collection of any penalty imposed by subdivision (a).(e) (1) Notwithstanding Chapter 6 (commencing with Section 19301), a taxpayer may not file a claim for refund or credit for any amounts paid in connection with the penalty imposed in subdivision (a), except as provided in paragraph (2).(2) A taxpayer may file a claim for refund for any amounts paid to satisfy a penalty imposed under subdivision (a) on the grounds that the amount of the penalty was not properly computed by the Franchise Tax Board. | |
| 377 | 335 | ||
| 378 | - | 19777.6. (a) There shall be added to the tax for each | |
| 336 | + | 19777.6. (a) There shall be added to the tax for each taxable year for which amnesty could have been requested:(1) For amounts that are due and payable on the last day of the amnesty period, an amount equal to 7.75 percent of the accrued interest payable under Section 19101 for the period beginning on the last date prescribed by law for the payment of that tax (determined without regard to extensions) and ending on the last day of the amnesty period specified in Section 19740.1.(2) For amounts that become due and payable after the last date of the amnesty period, an amount equal to 7.75 percent of the interest computed under Section 19101 on any final amount, including final deficiencies and self-assessed amounts, for the period beginning on the last date prescribed by law for the payment of the tax for the year of the deficiency, determined without regard to extensions, and ending on the last day of the amnesty period specified in Section 19740.1.(3) For purposes of paragraph (2), Sections 19107, 19108, 19110, and 19113 shall apply in determining the amount computed under Section 19101.(b) The penalty imposed by this section is in addition to any other penalty imposed under Part 10 (commencing with Section 17001), Part 11 (commencing with Section 23001), or this part.(c) This section does not apply to any amounts that are treated as paid during the amnesty program period under paragraph (4) of subdivision (a) of Section 19740.3 or paragraph (1) of subdivision (b) of Section 19740.3.(d) Article 3 (commencing with Section 19031), (relating to deficiency assessments) shall not apply with respect to the assessment or collection of any penalty imposed by subdivision (a).(e) (1) Notwithstanding Chapter 6 (commencing with Section 19301), a taxpayer may not file a claim for refund or credit for any amounts paid in connection with the penalty imposed in subdivision (a), except as provided in paragraph (2).(2) A taxpayer may file a claim for refund for any amounts paid to satisfy a penalty imposed under subdivision (a) on the grounds that the amount of the penalty was not properly computed by the Franchise Tax Board. | |
| 379 | 337 | ||
| 380 | 338 | ||
| 381 | 339 | ||
| 382 | - | 19777.6. (a) There shall be added to the tax for each | |
| 340 | + | 19777.6. (a) There shall be added to the tax for each taxable year for which amnesty could have been requested: | |
| 383 | 341 | ||
| 384 | 342 | (1) For amounts that are due and payable on the last day of the amnesty period, an amount equal to 7.75 percent of the accrued interest payable under Section 19101 for the period beginning on the last date prescribed by law for the payment of that tax (determined without regard to extensions) and ending on the last day of the amnesty period specified in Section 19740.1. | |
| 385 | 343 | ||
| 386 | 344 | (2) For amounts that become due and payable after the last date of the amnesty period, an amount equal to 7.75 percent of the interest computed under Section 19101 on any final amount, including final deficiencies and self-assessed amounts, for the period beginning on the last date prescribed by law for the payment of the tax for the year of the deficiency, determined without regard to extensions, and ending on the last day of the amnesty period specified in Section 19740.1. | |
| 387 | 345 | ||
| 388 | 346 | (3) For purposes of paragraph (2), Sections 19107, 19108, 19110, and 19113 shall apply in determining the amount computed under Section 19101. | |
| 389 | - | ||
| 390 | - | (4) For purposes of this section, due and payable shall have the same meaning as in Section 19221. | |
| 391 | 347 | ||
| 392 | 348 | (b) The penalty imposed by this section is in addition to any other penalty imposed under Part 10 (commencing with Section 17001), Part 11 (commencing with Section 23001), or this part. | |
| 393 | 349 | ||
| 394 | 350 | (c) This section does not apply to any amounts that are treated as paid during the amnesty program period under paragraph (4) of subdivision (a) of Section 19740.3 or paragraph (1) of subdivision (b) of Section 19740.3. | |
| 395 | 351 | ||
| 396 | 352 | (d) Article 3 (commencing with Section 19031), (relating to deficiency assessments) shall not apply with respect to the assessment or collection of any penalty imposed by subdivision (a). | |
| 397 | 353 | ||
| 398 | 354 | (e) (1) Notwithstanding Chapter 6 (commencing with Section 19301), a taxpayer may not file a claim for refund or credit for any amounts paid in connection with the penalty imposed in subdivision (a), except as provided in paragraph (2). | |
| 399 | 355 | ||
| 400 | 356 | (2) A taxpayer may file a claim for refund for any amounts paid to satisfy a penalty imposed under subdivision (a) on the grounds that the amount of the penalty was not properly computed by the Franchise Tax Board. | |
| 401 | 357 | ||
| 402 | 358 | SEC. 5. No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution. | |
| 403 | 359 | ||
| 404 | 360 | SEC. 5. No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution. | |
| 405 | 361 | ||
| 406 | 362 | SEC. 5. No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution. | |
| 407 | 363 | ||
| 408 | 364 | ### SEC. 5. |