LOS ANGELES CITY BUSINESS TAX VOLUNTARY DISCLOSURE PROGRAM

TAX BRIEF

October 2011
The City of Los Angeles has enacted a new Voluntary Disclosure Program (VDA), which provides penalty relief for qualified taxpayers who have not registered with the City to report and remit their LA City Business tax. The program becomes effective on October 4, 2011. Qualifying taxpayers who participate in the program may abate applicable penalties, but not, interest on their delinquent Business Tax liabilities. Taxpayers may also be eligible for reduced look-back periods, limiting the taxpayers overall tax exposure. A qualifying taxpayer must meet all of the following criteria to be eligible for the VDA program: Engaged in business in the City of Los Angeles Have not previously filed an application for a LA business tax registration certificate or renewal form(s) Have not been previously contacted by the City regarding delinquent tax liabilities and is not currently under audit or otherwise contesting such liabilities Voluntarily files an application for business tax registration certificate or renewal form(s) with the city for all years for which taxpayer was engaged in business in Los Angeles Cooperates with an investigation of the taxes at issues in the VDA and provide all books and records requested Failure to timely file application for business tax registration certificate or renewal form(s) or to pay taxes was due to reasonable cause and was not due to intentional disregard of the law or fraud or an intent to evade the provisions of the city code The VDA contains such terms and conditions as are necessary to effectuate the VDA program During the first year (12 months) of the program, qualifying taxpayers will only be assessed and liable for back taxes for the prior three years, as opposed to the normal eight-year limitation period. However, after the first year of the program, the assessment period will increase to five years. If you conduct business within the City of Los Angeles, and have not registered for the City Business Tax, please contact one of our professionals in the State and Local Tax Practice to determine if you may be liable for such taxes, and whether you qualify for the VDA program.

Thank you for your time and continued support of the Enterprise Zone program As always, please call if you would like to discuss any of these items further. Your Tax Partners, Mark G. Cook, Partner Steven J. Cupingood, Partner Todd Northrup, Partner Javier Ramirez, Partner Richard A. Linder, Partner David Neighbors, Partner Don G. Leve, Partner Thomas E. Wendler, Partner Jon Widdowson, Partner Michael Wu, Partner Dan B. Faulk, Partner

IRS Circular 230 Disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this communication (including attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code, or (ii) promoting, marketing or recommending to another party any matters addressed herein. Notice: Opinions, conclusions, and other information in this message are not intended to represent recommendations or advice to you or any other person. Each persons circumstances are unique, and we strongly suggest you discuss your specific situation with your professional advisor before taking any action based on the information herein or information to which this message refers.