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(1) A person who transferred Montana property in a section 1031 like-kind exchange on or after December 31, 2001, who recognized some or all of the gain, including boot, realized on the exchange for federal income tax purposes while a nonresident, and who has not met their Montana filing and tax obligations may fulfill their filing and tax obligations without assessment of penalty and part of the applicable interest.

(2) A taxpayer qualifies for the voluntary disclosure program if the taxpayer is described in (1) and did any of the following:

(a) failed to file a return and pay any tax due for a tax year beginning after 2001; or

(b) underreported tax for any tax year beginning after 2001.

(3) A taxpayer does not qualify if:

(a) the taxpayer has been contacted by the department about filing or paying the same delinquent taxes;

(b) the taxpayer has been a party to any criminal investigation or pending civil or criminal litigation for nonpayment, delinquency, or fraud in relation to any tax due; or

(c) one of the tax years is included in an ongoing or unresolved audit.

(4) If the taxpayer qualifies the taxpayer must notify the department by filing the appropriate returns and paying the tax due beginning May 1, 2006, and ending August 31, 2006 and clearly indicating on each return and any separate correspondence that the taxpayer wishes to take advantage of the voluntary disclosure program.

(5) If a taxpayer comes forward under the voluntary disclosure program, the department and the taxpayer will enter into a signed agreement which recognizes that the taxpayer had a filing and tax obligation and that the department will be waiving all penalties associated with voluntary disclosure program and one-half of any interest owed or $100 of accrued interest per tax period, whichever is greater.

(6) The department reserves its right to audit a taxpayer's books and records, subject to statutory time limits. The audit may include all or part of the periods covered under the voluntary disclosure program. The department will assess any tax determined to be due that was not discharged under the voluntary disclosure program. All applicable penalties and interest will apply to additional taxes discovered to be due that have not been paid. If any of the factual representations made in the voluntary disclosure program are found to have been materially misrepresented or a material fact is found to have been omitted by the taxpayer or its representative, the department may reassess the waiver of any penalties and interest that occurred based on the provisions in (1) through (6) .

(7) The application of this rule shall expire on September 1, 2006.

History: 15-1-201, 15-1-211, 15-30-305, MCA; IMP, 15-1-206, 15-30-101, 15-30-105, 15-30-142, 15-30-304, MCA; NEW, 2006 MAR p. 921, Eff. 4/7/06.

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