States See Son of Boss Benefits; Tax Administrators Praise Efforts

IRS Press Release
March 24, 2005

WASHINGTON - As part of a larger partnership between the Internal Revenue Service and state tax agencies, states are beginning to see early results from the Son of Boss settlement initiative.

Many taxpayers who participated in the Son of Boss initiative also amended their state tax returns. Arizona, Illinois, Maine, Maryland, Michigan, New York, Ohio, Utah and Virginia are among the states benefiting from the initiative and have collected more than $23.5 million from voluntary state tax return amendments.

In addition, the IRS information shared with the states has initially resulted in $161 million in disallowed losses claimed and assessments of nearly $16 million in taxes, interest and penalties for Colorado, Connecticut, Maine, Maryland, Missouri, North Dakota, Pennsylvania, Utah and Virginia combined. More states are expected to show significant benefits as the initiative progresses.

Separately, a number of states have also pursued Son of Boss participants through their own state compliance initiatives. The California Franchise Tax Board through its voluntary compliance initiative has collected $132 million to date from Son of Boss participants, while the New York State Department of Taxation and Finance has collected approximately $45 million through a similar program.

To date, information from 1,015 cases has been shared with 34 states.

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