Jump to Navigation

ASK THE EDD ATTORNEY – DIDN'T FILE YOUR 2013 FTB INCOME TAX RETURN? READ THIS . . .

By Robert S. Schriebman
February 19, 2015

Introduction

In early February 2015, the California Franchise Tax Board (FTB) issued a news release stating that the FTB will be contacting more than one million people who earned money in 2013 but did not file a state income tax return. Each year the FTB receives more than 500 million income tax records from banks, employers, the IRS, and other third parties. The FTB matches these income tax records against its database of tax returns. In addition, the FTB detects others who have earned income but did not file a return through sources such as occupational licenses and mortgage interest payments.

The FTB started sending out contact letters to non filers in January 2015 and will continue to send out these letters throughout the year. Those contacted by the FTB have thirty (30) days to file a state tax return or to notify the FTB to explain why they are exempt from filing. Failure to respond to an FTB notice may cause the FTB to issue a Notice of Proposed Assessment (NPA). The NPA requires the filing of a response in a timely manner or the deficiency set forth in the NPA will become a final assessment subject to enforced collection such as the filing of a Notice of State Tax Lien, bank account levy, wage garnishment, or a combination of all of these.

Some taxpayers have earned too little taxable income to require the filing of a return, but these people may be owed a refund. The FTB refund statutes are very complicated, and you can lose your refund if you fail to file a timely return or claim. If you are entitled to a refund and you file a late return there is no penalty. Penalties only attach when taxes are owed, but these penalties may be abated for reasonable cause such as sickness or a death in the family.

Failure to file an FTB income tax return when you are required to do so may subject you to stiff fines and even criminal exposure. Usually the failure to file for one year does not show a criminal state of mind. However, the failure to file required returns for several years in a row definitely shows a pattern of conduct that can subject you to criminal prosecution.

Even if you believe that you are not required to file a tax return you should consider doing so. Filing a return starts the statute of limitations for examination. If no return is filed there is no statute of limitations to prevent the FTB from auditing you.

If you have been contacted by the FTB for failure to file a return you can visit the FTB’s web site at www.ftb.ca.gov. You can also call the FTB at 866.204.7902.

Source: News Release, California Franchise Tax Board, February 8, 2015

***

Robert Schriebman has a successful practice in the Rolling Hills Estates area of Los Angeles County serving clients throughout California and the United States. He has successfully dedicated more than 40 years to helping individual taxpayers, business owners, CPAs, Enrolled Agents, and tax attorneys navigate the complicated tax systems of the federal and state governments.

Robert Schriebman has written the only 2 books ever published dealing with how California Employment Development Department (EDD) operates. See “California Tax Collection Practice and Procedures” and “California Taxation Practice and Procedure”, both published by Commerce Clearing House.

Robert Schriebman has written over 20 books including the major manual used nationally by practitioners and the IRS, “IRS Tax Collection Procedures – A Manual for Practitioners” published by Commerce Clearing House.

Robert Schriebman has written over 20 books including the major manual used nationally by practitioners and the IRS, “IRS Tax Collection Procedures – A Manual for Practitioners” published by Commerce Clearing House in addition to the only 2 books ever published dealing with how California Employment Development Department (EDD) operates. See “California Tax Collection Practice and Procedures” and “California Taxation Practice and Procedure”, both published by Commerce Clearing House.

Web Site Article 162