Multistate Tax Shelter Program Achieves Results

MADISON – From May 1, 2007 through October 1, 2007, Wisconsin collected over $1.5 million through the Multistate Tax Shelter Voluntary Compliance Program. This program encouraged taxpayers to pay taxes they previously avoided using transactions identified as “abusive tax shelters.” The Multistate Tax Commission (MTC) coordinated this program.


In the recently agreed upon compromise budget, Governor Doyle included a similar program to be facilitated by the Wisconsin Department of Revenue.  The combined programs are expected to generate approximately $10.2 million in general fund tax revenue.


“Creating policy measures such as voluntary tax compliance programs encourages taxpayers to pay what they owe,” stated Roger M. Ervin, Secretary of the Department of Revenue.  “The State benefits by generating extra revenue it may not have ever seen.”


The program was available to taxpayers who used abusive transactions identified by the IRS as “listed transactions” or “reportable transactions,” as well as tax shelters that affect state tax liability without affecting federal tax liability. The program was especially targeted to taxpayers who previously disclosed tax shelters to some states but not to others affected by those same transactions.


To participate in the program, eligible taxpayers were required to file amended returns during the period of May 1, 2007 through October 1, 2007 for all states (or remaining states) affected by the abusive tax shelter. The MTC accepted these amended returns and forwarded them to the affected states. 


Taxpayers who participated in this program were granted a waiver of civil and criminal penalties if they met the conditions of participation, voluntarily disclosed the details of the abusive tax shelters which were used, and paid the full amount of tax and interest due.



There were 23 states participating in the Multistate Voluntary Compliance Program. In total, these states collected over $21 million in previously unpaid taxes through the program.