N.C. Department of Revenue Offers Taxpayers
Chance for Reprieve
RALEIGH – North Carolina Department of Revenue Secretary Norris
Tolson today announced a new voluntary compliance program that gives
taxpayers a one-time opportunity to avoid fees, penalties and prosecution
if they come forward voluntarily and pay past-due taxes and interest
accrued from engaging in income-shifting tax strategies or other tax
shelter activities that reduce or eliminate their state taxes.
“Courts have upheld that taxpayers who engage in income-shifting
or tax shelter strategies must pay their fair share of taxes in accordance
with the North Carolina Revenue Laws,” said Tolson. “The
department has an obligation to identify those taxpayers that have
participated in income-shifting schemes and collect those revenues.
“This new program will give taxpayers a window of opportunity
to correct their returns, pay the taxes they owe and avoid further
penalty,” Tolson added.
The voluntary compliance program will allow corporate and individual
income taxpayers who have underreported their tax liability to correct
their returns and pay their tax bill along with any interest that
has accrued. In exchange, the department will waive all civil penalties
and will not pursue further legal action up to and including prosecution.
This program is available for all tax years from Nov. 2, 1992 to the
All individual and corporate taxpayers who have engaged in tax strategies
where income that would otherwise be taxable in North Carolina is
shifted to out-of-state or other tax shelters to eliminate or minimize
their tax burden are eligible to participate. They must meet additional
criteria. Please see the department’s website at www.dor.state.nc.us/compliance/
for more information.
For taxpayers with current assessments, the deadline for paying the
tax and interest is Jan. 31, 2005. All other taxpayers must sign and
return a voluntary compliance agreement by Feb. 28, 2005 and pay all
taxes and interest due by April 15, 2005. After the compliance program
ends, the department will vigorously pursue taxpayers who have engaged
in income-shifting or tax shelter strategies. For those found to be
involved in these strategies, civil penalties can amount to more than
60 percent of the tax due.
(Additional information regarding the voluntary compliance
program is available at www.dor.state.nc.us/compliance/)
Public Affairs Office
P.O. Box 25000, Raleigh, NC 27640-0001
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Last modified on:
10/31/07 03:44:13 PM