Can I file a Voluntary Compliance Initiative amended return reversing less than 100 percent of the potentially abusive tax transaction?
If you reverse only a portion of the potentially abusive tax transaction and it is not based on a determination issued by the IRS or the Franchise Tax Board, the portion that was not reversed will be subject to penalties. These penalties include the noneconomic substance transaction penalty or the accuracy related penalty, the interest based penalty, and the fraud penalty.
