Tax News

CCH (cch.taxgroup.com) reports:

  Friday, September 12, 2008, is the deadline to apply for the California corporation franchise and income tax and personal income tax penalty relief available to participants in "bogus optional basis" (BO or certain "employee stock ownership plan" (ESOP) transactions that was announced in Franchise Tax Board (FT Notice 2008-4.

  To participate, taxpayers must submit a signed and completed closing agreement by September 12, 2008 and pay all tax, penalties, and interest relating to the eligible BOB and ESOP transactions.

  The following relief is available to participating taxpayers:

  -- reduction of the 40% non-economic substance transaction (NEST) penalty to 20%;

  -- cancellation of the 100% interest based penalty if the assessment is not final; and

  -- for participants who have not yet received an assessment, the FTB will only assess the 20 percent accuracy-related penalty on the underpayment relating to the eligible BOB or ESOP transactions.

Press Release , California Franchise Tax Board, September 11, 2008.