Sacramento, Calif. — The California Franchise Tax Board, the department that administers state personal income taxes and corporation taxes, has subpoenaed two major insurance companies that it says may have insured certain abusive tax shelters against government enforcement actions.
The FTB said that the subpoenas demand the names and addresses of all California residents, persons with mailing addresses in California, and businesses doing business in California who were issued insurance policies or who sought to procure policies for tax liability, fiscal event, tax indemnity or any similar product from 1999 through 2002.
FTB spokeswoman Denise Azimi said that the board has no idea how many potential clients may have purchased the insurance, and said that the board could not disclose which companies it subpoenaed.
The subpoenas require the insurers to provide documents pertaining to the marketing, sales and issuance of the tax liability insurance policies, “particularly as they may relate to the proliferation of abusive tax shelters,” the FTB said.
The announcement was made days before the board’s relief program for taxpayers who’ve invested in abusive tax shelters ended.
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