Looking for a Participation Agreement Templates? Download it for free!

Instructions for Form WI-VCP

Note: The deadline for participation in the Tax Shelters Voluntary Compliance Program is May 31, 2008

Purpose of Form

Complete Form WI-VCP if you are reporting unpaid taxes through the Tax Shelters Voluntary Compliance Program. The

Tax Shelters Voluntary Compliance Program was created by 2007 Wisconsin Act 20 (sec. 71.805, Wis. Stats.). This

program allows taxpayers to avoid penalties on past transactions entered into principally for tax avoidance. In order to

receive the benefits of this program, you must participate by May 31, 2008.

Report unpaid taxes through the Tax Shelters Voluntary Compliance Program if you used a “tax avoidance transaction”

that reduced your Wisconsin income or franchise tax liability for a tax year beginning after December 31, 2000 and before

January 1, 2007. A taxpayer who has been contacted by the Internal Revenue Service (IRS) or the Wisconsin Department

of Revenue regarding the tax avoidance transaction may still participate in this program if all other requirements are met.

What is a “Tax Avoidance Transaction?”

A “tax avoidance transaction” is a transaction, plan or arrangement devised for the principal purpose of avoiding federal or

Wisconsin income or franchise tax, including:

•

A “listed transaction” as provided under U.S. Department of the Treasury Regulations (Notice 2004-67, 2004-41

I.R.B. 600, Notice 2005-13, 2005-9 I.R.B. 630. The IRS also maintains a list of these transactions on its web site

at ).

•

A transaction, plan, or arrangement devised for the principal purpose of avoiding Wisconsin income or franchise

tax, without providing a similar benefit for federal income tax purposes.

How to Participate in the Tax Shelters Voluntary Compliance Program

•

Prepare an amended return for each year in which the tax avoidance transaction affected your Wisconsin tax

liability.

•

If the tax avoidance transaction required you to complete Form 8886, Reportable Transaction Disclosure

Statement, for federal income tax purposes, submit a copy of federal Form 8886 providing details of the

transaction. If the tax avoidance transaction did not require Form 8886 for federal income tax purposes, provide

details of the transaction.

•

Complete Form WI-VCP.

•

Enclose a check for full payment of the unpaid tax and interest.

•

Submit the above items to: Wisconsin Department of Revenue, Tax Shelters Program, P.O. Box 8958, Madison,

WI 53708-8958.

Appeal Rights

A taxpayer who uses the Tax Shelters Voluntary Compliance Program may not file an appeal or claim for refund with

respect to the tax avoidance transactions for which the taxpayer participated, except in cases where an appeal or claim

for refund is filed because of an adjustment made to the taxpayer’s federal income tax liability regarding those

transactions.

Form Wi-Vcp - Wisconsin Tax Shelters Voluntary Compliance Program Participation And Agreement Page 2