State + Local Tax
On October 1, 2008, California enacted SBX1 28, which imposes a new penalty of 20% on understatements of corporate taxes in excess of $1 million for tax years beginning on or after January 1, 2003 that remain open under the statute of limitations. The new penalty is imposed in addition to all existing penalties. California taxpayers seeking to avoid the new penalty have until May 31, 2009 to file amended returns for tax years beginning before January 1, 2008. The basics of the new penalty are outlined here.
 For more information regarding the new penalty and other major income tax provisions of the 2008 budget bills, please see “The Income Tax Provisions of California’s Fiscal 2009 Budget Act,” by Eric J. Coffill and David A. Ziring, which was published in the October 28, 2008 edition of State Tax Notes. 2008 STT 209-12 (Oct. 28, 2008).
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