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Form Wi-Vcp - Wisconsin Tax Shelters Voluntary Compliance Program Participation And Agreement Page 3

Penalties That May Otherwise Apply

If a taxpayer has used a tax avoidance transaction and is eligible for the Tax Shelters Voluntary Compliance Program, but

does not participate in the program, the following penalties may apply:

•

If a taxpayer negligently filed an incomplete or incorrect income or franchise tax return, a penalty may apply in the

amount of 25% of the tax otherwise due. If a taxpayer intentionally defeated or evaded income or franchise taxes,

a penalty may apply in the amount of 100% of the tax otherwise due. Additionally, criminal penalties for filing a

false return include a fine of $10,000 or imprisonment.

•

Additionally, 2007 Wisconsin Act 20 enacted requirements to disclose “reportable transactions” and substantial

penalties for failure to disclose these transactions. For Wisconsin purposes, a transaction is a “reportable

transaction” if it is required to be disclosed on federal Form 8886 for federal income tax purposes. Some

reportable transactions, including all listed transactions, may be considered “tax avoidance transactions” which

should be disclosed through the Tax Shelters Voluntary Compliance Program. See Wisconsin Tax Bulletin, issues

154 (December 2007) and 155 (January 2008) for further details on these new disclosure requirements.

Contact Information

If you have questions about the Tax Shelters Voluntary Compliance Program, please contact the Department of Revenue

as indicated below.

E-mail: wivoldis@revenue.wi.gov

Phone: (608) 266-3969

Mail:

Wisconsin Department of Revenue

Tax Shelters Program

P.O. Box 8958

Madison, WI 53708-8958

Fax:

(608) 267-0834

Form Wi-Vcp - Wisconsin Tax Shelters Voluntary Compliance Program Participation And Agreement Page 3