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FTB Issues Letters to Over 1 Million California Tax Payers Seeking Tax Returns



More than one million people who did not file a 2012 state income tax return are receiving letters seeking those returns or to verify that they do not have a tax filing requirement, according to the Franchise Tax Board (FTB).

Since the 1950s, FTB has contacted people who have California income, but did not file a tax return. Last year, FTB collected more than $727 million through these efforts.

Each year FTB receives more than 400 million income records from third parties such as banks, employers, state departments, the IRS, and other sources. FTB matches these income records against its records of tax returns filed. While this program mainly identifies wage earners and self-employed individuals who have not filed, it also detects other nonfilers through information sources such as occupational licenses and mortgage interest payments.

Those contacted have 30 days to file a state tax return or show why one is not due. For people who do not respond, FTB issues a tax assessment using income records to estimate the amount of state tax due. The assessment includes interest, fees, and penalties that can total up to 50 percent of the tax.

FTB provides more information for those receiving a letter at ftb.ca.gov. Taxpayers can search for: Respond to request/demand for tax return. Using this online service, individuals can request more time to reply, retrieve information that can assist in filing a tax return, request tax forms, learn about payment options, sign up to receive an email reminder to file, and access other services. They can also call FTB at 866.204.7902 for help.

The extended deadline to file a 2012 state tax return was October 15, 2013. Last year, California taxpayers filed more than 16 million tax returns.

Source: Franchise Tax Board News Release, January 23, 2014

In accordance with Circular 230 Disclosure

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Betty Williams has a broad range of experience handling civil and criminal tax controversy matters including income tax, employment tax, sales and use tax, property tax and IRS, FTB, and SBE audits, protests, and appeals. She has represented clients before the U.S. Tax Court and the U.S. District Courts in California. Betty has obtained penalty abatement for numerous clients ranging from a few thousand to more than $2 million in late filing and late payment penalties. She has assisted numerous clients in the United States and abroad in the 2009, 2011 and 2012 IRS and FTB voluntary disclosure initiatives. She also represents foreign financial institutions regarding Foreign Account Tax Compliance Act (FATCA) compliance. She has experience defending criminal tax matters and negotiating plea agreements in areas such as structuring, tax evasion, and the failure to file a tax return.