California Revenue And Taxation Code Section 19753

(a) This chapter does not apply to violations of this part for which, as of December 31, 2003, any of the following applies: (1) A criminal complaint was filed against the taxpayer in connection with an abusive tax avoidance transaction or transactions. (2) The taxpayer is the subject of a criminal investigation in connection with an abusive tax avoidance transaction or transactions. (b) No refund or credit shall be granted with respect to any penalty paid prior to the time the taxpayer participates in the voluntary compliance initiative authorized by this chapter. (c) For purposes of this chapter, an abusive tax avoidance transaction means a plan or arrangement devised for the principal purpose of avoiding tax. Abusive tax avoidance transactions include, but are not limited to, listed transactions as described in subdivision (a) of Section 18407.