Charleston, W. Va. -- Virgil T. Helton, State Tax Commissioner, today announced the Voluntary Compliance Program (VCP), a program that provides taxpayers who have participated in abusive tax shelters the opportunity to voluntarily come forward. The State Tax Department will be aggressively pursuing taxpayers that participated in listed transactions, which are tax shelters designated by the Internal Revenue Service (IRS) as abusive tax avoidance transactions (ATAT).

According to Commissioner Helton, "the State Tax Department has joined forces with the IRS, numerous other states, the Federation of Tax Administrators, and the Multi-State Tax Commission by sharing common data bases, audit techniques, strategies, and training in an effort to identify taxpayers and schemes".

These abusive shelters cost honest taxpayers substantially by shifting the tax burden to other businesses that do pay their taxes. A number of studies estimate that the IRS and the states are losing billions of dollars annually because of these abusive tax schemes. These transactions create inflated tax deductions and artificial losses that are used to avoid paying taxes. Most of these abusive transactions involve the use of pass-through entities, both domestic and foreign, to create a confusing paper trail.

This program runs from August 1, 2006 through November 1, 2006. In order to participate, taxpayers and tax preparers must complete a VCP form and remit their payment by November 1, 2006. Those taxpayers who have used these schemes and fail to take advantage of this offer will incur substantial penalties and prosecution when they are discovered through the audit process.

For more information please access the Department's website at http://www.wvtax.gov/vci.htm, or call the Compliance Division at 558-8751.

 

   

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