• California Takes the Initiative Against Abusive Tax Shelters
  • January 16, 2004
  • Law Firm: Nixon Peabody LLP - San Francisco Office
  • Although federal legislation had been introduced in 2003 to reign in abusive tax shelters, such efforts have been stalled in Congress. California, however, has picked up the ball and run with it. Signed into law on October 2, 2003, this new law adopts existing federal law regarding tax shelters and provides a comprehensive set of changes designed to: (1) curtail abusive tax avoidance transactions; (2) enhance penalties for investors, promoters, and organizers of abusive tax shelters, including a new penalty for transactions that lack economic substance; and (3) provide a state voluntary compliance initiative.