Busy year ahead: tax amnesty program and pro forma pilot among year's challenges.

• Author: Ascierto, Jerry
• Position: California tax

Gerry Goldberg, executive director of the Franchise Tax Board, recently described the FTB's workload as "mind-boggling."

Opening the CalCPA Committee on Taxation's annual liaison meeting with the FTB Oct. 28, Goldberg reported that in addition to a new tax amnesty program, revised pro forma system and an ongoing Voluntary Compliance Initiative, the FTB will consolidate many offsite locations into a centralized campus over the next eight months.

2005 Amnesty Program

The state's budget deficit is the impetus for the 2005 amnesty program, Goldberg said.

"We did not close the deficit last year and there's continual pressure to bring in additional revenue," he said. "I don't see any tax increases, but we will enhance our enforcement capabilities."

Noting that the 2004 amnesty program, which targeted nonfilers, netted a surprising $1.4 billion in revenue, Goldberg said, "We will work with you. The whole purpose of the amnesty program is to get people into the system. The purpose of this amnesty, unlike the last amnesty, which was to increase the number of nonfilers coming in, is to accelerate money."

Carol Williams, the FTB's amnesty project manager, said the program is a limited opportunity for individuals and businesses to pay past-due income, sales or use taxes and related interest for tax year 2002 and prior, and avoid most penalties, fees and criminal prosecution.

"Amnesty is open to all individuals and businesses, except taxpayers under criminal investigation or prosecution on tax-related matters, and abusive tax shelter transactions that were eligible for relief under California's Voluntary Compliance Initiative or the 2003 IRS Offshore Voluntary Compliance Initiative," she said.

The accuracy penalty will increase from 20 percent to 40 percent for post-amnesty assessments, however, the increase does not apply to a taxpayer in audit, protest, appeal, settlement or litigation as of the start of amnesty, or understatements relating to tax shelter items.

The FTB is mailing 2.2 million letters in December and January as part of its outreach efforts, and will launch an aggressive media campaign to bring in participants.

More information on the program can be found at www.ftb.ca.gov/amnesty/faq.html.

California Tax Commission

Goldberg also spoke about the the California Performance Review's recommendation to establish a California Tax Commission.

The proposed move would consolidate the DMV's vehicle licensing fee collection arm, EDD employment...