Tax News

CCH (cch.taxgroup.com) reports:

Because of the confusion among taxpayers regarding their obligation to file IRS Form 8886 for California corporation franchise and income and personal income tax purposes, the Franchise Tax Board (FT is giving taxpayers an additional 45 days to file. The FTB will soon issue a notice to advise taxpayers of the extended due date of November 15, 2007, and clarify disclosure requirements with respect to reportable transactions.
As previously reported, FTB Notice 2007-3 gave taxpayers 60 days from the date of the Notice to file an IRS Form 8886, Reportable Transaction Disclosure Statement, for each year that they participated in a reportable transaction. (TAXDAY, 2007/08/01, S.9; TAXDAY, 2007/10/05, S.3) There has been some confusion among taxpayers over the categories of reportable transactions and whether they had a requirement to disclose their transactions. In particular, taxpayers have been confused about the "Transactions with Contractual Protection" category of reportable transactions found under Treasury Reg. 1.6011-4(b)(4). A transaction with contractual protection is any transaction where the taxpayer has a right to a full or partial refund of fees paid in the event the tax treatment is not sustained, or where the fee is contingent upon the realization of tax benefits from the transaction.
News Release , California Franchise Tax Board, October 3, 2007.