Governor Schwarzenegger has just signed S.B. 1100 authorizing an amnesty to run from February 1, 2005 through March 31, 2005. The program shall apply to personal income, corporation, franchise (income), and sales and use taxes for reporting periods beginning before January 1, 2003. Penalties, but not interest, will be waived. In order to be eligible, taxpayers must either not have filed California tax returns, underreported income on tax returns they did file, claimed excessive deductions, or paid their taxes late. Taxpayers already under investigation for tax issues and taxpayers who could have participated in California’s Voluntary Compliance Initiative or the 2003 IRS Offshore Voluntary Compliance Initiative are not eligible. To participate, taxpayers must submit completed and signed amnesty applications by March 31, 2005, and amended or missing tax returns and payment of liabilities and interest must be remitted by May 31, 2005. An installment payment agreement plan will also be available, with all payments due by June 30, 2006. The amnesty application will be available online by January 15, 2005 and tax forms for 1994 through 2003 are currently available at http://www.ftb.ca.gov/index.html; for years before 1994 taxpayers may order forms by calling (800) 852-5711. Eligible taxpayers who do not participate in the 2005 amnesty will face an increase in accuracy-related penalties from 20% to 40% on new tax assessments and an amnesty penalty of 50% on the unpaid interest for years included in the 2005 amnesty. For an update on this news item, click here. (Senate Bill 1100, effective as noted above)