Current through Register Vol. XLI, No. 38, September 20, 2024
8.1.
Election - An eligible taxpayer that meets the requirements of W. Va. Code
§
11-10E-2(d)
with respect to any taxable year to which W. Va. Code §
11-10E-1
et seq. applies may elect to participate in the Voluntary Compliance Program
under one of two procedures described below, for any particular tax avoidance
transaction period. Such election shall be made separately for each taxable
year. Such election, once made, is irrevocable.
8.1.1. Voluntary compliance without appeal -
Once the eligible taxpayer elects to participate in the Voluntary Compliance
Program under this procedure, the Tax Commissioner:
8.1.1.1. Shall abate and not seek to collect
any penalty that may be applicable to the underreporting or underpayment of
West Virginia tax attributable to the use of tax avoidance transactions for
such taxable year;
8.1.1.2. Except
as otherwise provided in W. Va. Code §
11-10E-1
et seq., shall not seek civil or criminal prosecution against the taxpayer for
such taxable year with respect to tax avoidance transactions; and
8.1.1.3. The taxpayer may not file a claim
for credit or refund with respect to the tax avoidance transaction for the
taxable year. Nothing in this subdivision may preclude a taxpayer from filing a
claim for credit or refund for the same taxable year in which a tax avoidance
transaction was reported if such credit or refund is not attributable to the
tax avoidance transaction.
8.1.1.4.
No penalty may be waived or abated under W. Va. Code §
11-10E-1
et seq., or this subdivision if the penalty imposed relates to West Virginia
income tax assessed prior to the August 1, 2006.
8.1.2. Voluntary compliance with appeal -
Once an eligible taxpayer elects to participate in the Voluntary Compliance
Program under this procedure, the Tax Commissioner:
8.1.2.1. Shall abate and not seek to collect
any penalty that may be applicable for the failure to report listed
transactions, with respect to such taxable year;
8.1.2.2. Except as otherwise provided in W.
Va. Code §
11-10E-1
et seq., shall not seek civil or criminal prosecution against the taxpayer for
such taxable year with respect to tax avoidance transactions; and
8.1.2.3. The taxpayer may file a claim for
credit or refund as provided in W. Va. Code §
11-10-1 et
seq., with respect to such taxable year.
8.1.2.4. Notwithstanding any other provision
of the West Virginia Code to the contrary, the taxpayer electing to participate
in the Voluntary Compliance Program with appeal may not file such appeal until
after either of the following:
8.1.2.4.a. The
Tax Commissioner issues a notice of denial; or
8.1.2.4.b. The earlier of:
8.1.2.4.b.1. The date which is 180 days after
the date of a final determination by the Internal Revenue Service with respect
to the transactions at issue;
8.1.2.4.b.2. The date that is three years
after the date the claim for refund or credit was filed; or
8.1.2.4.b.3. One year after full payment of
all tax, including penalty and interest.
8.2. No penalty may be
waived or abated under W. Va. Code §
11-10E-1
et seq., or this subsection if the penalty imposed relates to an amount of West
Virginia income tax assessed prior to August 1, 2006..
8.3. Time period - The eligible taxpayer must
elect the voluntary compliance procedure to be used and complete all other acts
prescribed the Tax Commissioner during the period August 1, 2006 to November 1,
2006.
8.3.1. The eligible taxpayer, during
the time period stated above, is required to complete the following:
8.3.1.1. File an amended return for each
taxable year for which the taxpayer used a tax avoidance transaction to
underreport the taxpayer's West Virginia income tax liability, reporting the
total West Virginia taxable income and income tax for the taxable year computed
without regard to any tax avoidance transactions; and
8.3.1.2. Make a full payment of the
additional income tax and interest due for such taxable year that is
attributable to the use of the tax avoidance transaction.
