Income/Franchise:
California: Limited Time Resolution for Some Eligible Transactions Subject to NEST Penalty is Extended
FTB Notice 2023-03, Cal. Fran. Tax Bd. (11/13/23). The California Franchise Tax Board (FTB) issued FTB Notice 2023-03, which extends its recently created resolution process allowing certain eligible taxpayers to resolve “eligible transactions” that may be subject to the non-economic substance transaction (NEST) understatement penalty under Cal. Revenue and Taxation Code (RTC) section 19774 by providing reduced penalties [see FTB Notice 2023-02, Cal. Fran. Tax Bd. (5/31/23) and State Tax Matters, Issue 2023-23, for more details on this program as originally announced]. Under FTB Notice 2023-03, such eligible taxpayers may submit a complete and signed “Notice 2023-02 Closing Agreement” and pay all taxes, applicable penalties, and accrued interest (or enter into a qualifying installment payment arrangement) by January 31, 2024, rather than by November 17, 2023. Please contact us with any questions.
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