Sacramento, Calif. (March 18, 2004) -- The California Franchise Tax Board -- the department that administers the revenue and taxation code for the state -- is sending some 10,000 letters to tax shelter promoters advising them of a state law that requires them to turn over their client lists to FTB auditors by April 30.
As part of the effort, the organization also sent letters of notification to 125 accounting and law firms as well as other businesses that may have promoted abusive tax shelters.
The state’s tax shelter enforcement legislation, signed into law in October, increased the penalties against shelter promoters and taxpayers who use them. California estimates that it loses between $600 million to $1 billion through abusive tax shelters.
To date, California has collected more than $113 million through its Voluntary Compliance Initiative, a limited-time program that allows taxpayers who have used abusive tax shelters to come forward and avoid larger penalties. This latest crackdown comes on the heels of the FTB sending out 18,000 notification letters to taxpayers it identified as candidates for the voluntary initiative.
-- WebCPA staff
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