California Gov. Edmund G. Brown, Jr., has signed legislation easing several corporate franchise and income tax and personal income tax penalties. Specifically, the legislation:
- repeals the “failure to keep records” penalty for material advisors;
- expands the Franchise Tax Board’s Voluntary Disclosure Program to allow S corporations and limited liability companies classified as partnerships relief from failure to file and late filing penalties (operative for voluntary disclosure agreements entered into on or after January 1, 2017); and
- decouples state law from the federal provisions that imposes a $50,000 penalty for each failure to satisfy the federal REIT requirements due to reasonable cause and not willful neglect (operative for taxable years beginning on or after January 1, 2005).
Ch. 176 (A.B. 1719), Laws 2017, effective January 1, 2018, and applicable as noted