W. Va. Code R. § 110-10E-8

Current through Register Vol. XLI, No. 50, December 13, 2024

Section 110-10E-8 - Election, Voluntary Compliance With and Without Appeal, Eligible Taxpayer Status, Time Periods

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.

W. Va. Code R. § 110-10E-8