California Commences New Tax Amnesty Program

by Mike Godfrey, Tax-News.com, Washington

04 February 2005

The state of California has begun a tax amnesty scheme which gives taxpayers the opportunity to discharge previously unpaid sales and use tax bills whilst avoiding penalties and criminal prosecution.

The amnesty program began on February 1 and will be operational until March 31, 2005, and according to the California State Board of Equalization, offers taxpayers a chance to “correct past errors” of unreported and unpaid sales and use tax for reporting periods that began prior to January 1, 2003.

"This is an incredible opportunity for California taxpayers to avoid certain penalties and possible criminal prosecution, while providing revenue to fund state and local emergency, fire, safety, health and transportation projects,” announced BOE Chairman John Chiang prior to the commencement to the amnesty.

"It is our hope that taxpayers will take this opportunity to review their records, find any oversights in their returns, and file for amnesty in order to avoid substantial new penalties," added Chiang.

The Franchise Tax Board is administering a similar amnesty program for franchise and income taxes.

Such amnesty programs have become a popular revenue raiser for California’s tax authorities after a similar scheme last year managed to bring in some $800 million in tax, tens times the amount originally forecast.

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