North Carolina and the Resolution Initiative
North Carolina has secretly or informally (whatever you want to call it), established a Resolution Initiative. North Carolina has not publicly released any information on the Initiative; however, the "election to participate" form should be made available.
Several of the larger accounting firms have released publications discussing the Initiative. I have provided links to a couple of them:
Since you can click on the above links to get all of the details, I will only provide a high-level summary:
- The Resolution Initiative applies to corporate income and franchise tax.
- The NC DOR is contacting taxpayers under audit to participate.
- Taxpayers not currently under audit may also participate.
- Taxpayers desiring to participate must sign a participation agreement by September 15, 2009.
A taxpayer that opts out of the agreement after submitting the agreement to the NC DOR, will be faced with expedited assessments and final determinations.
It appears as though North Carolina is attempting to resolve technically controversial issues quickly in order to raise revenue, while providing a "carrot" (waiver of all applicable civil penalties; and waiver of all rights to assess any additional corporate tax, interest or penalties except for adjustments relating to federal corrections) to taxpayers.What Should You Do?Taxpayers who have some of the issues being targeted by the Initiative, should seriously consider this opportunity. However, like all opportunities, there are pros and cons which must be weighed before action is taken.
If you have any questions or would like assistance in analyzing this "opportunity," please contact me at firstname.lastname@example.org.
Brian Strahle is the owner of LEVERAGE SALT, LLC where he provides state and local tax technical services to accounting firms, law firms and tax research organizations across the United States. He also writes a weekly column in Tax Analysts State Tax Notes entitled, "The SALT Effect." For more info, visit his website: www.leveragestateandlocaltax.com
You can reach Brian at email@example.com.
Because state and local taxes are deceptively simple and endlessly complicated.