California Voluntary Compliance Initiative II
Abusive tax avoidance transactions and offshore financial arrangements
California's "Voluntary Compliance Initiative II" ("VCI II") was enacted as part of Senate Bill 86 ("S.B. 86"), which was signed by Governor Jerry Brown on March 24, 2011. Under the terms of this new initiative, qualified participating taxpayers that file the required amended returns, and pay all tax and interest owing, will receive relief from most California tax penalties for pre-2011 "abusive tax avoidance transactions" ("ATATs") and underreported income from "offshore financial arrangements" ("OFAs").
Voluntary Compliance Initiative II
VCI II will run from August 1, 2011 to October 31, 2011. The legislation effectuates one of Governor Brown's budget proposals, and is estimated to generate approximately $270 million during the 2010-2011 fiscal year. This article summarizes the requirements of VCI II, and discusses some of the possible pros and cons of participation.