text:
(a) The Franchise Tax Board shall revise the California resident income tax return to include a space for the taxpayer’s address of their principal residence and their county of principal residence.

(b) For purposes of this section, “county of principal residence” means the county in which the taxpayer has their principal residence on the date that the taxpayer filed their California resident income tax return.

(c) For the purposes of this section, “principal residence” is used in the same manner it is used in Section 121 of Title 26 of the United States Code.

history: (History: Added by Stats. 2020, Ch. 230, Sec. 4. (SB 592) Effective January 1, 2021.)

article: 3. Tax Forms


kind: section

code: RTC

text:
(a) (1) Beginning January 1, 2023, the Franchise Tax Board shall notify all potential eligible individuals of available paperless filing options offered through the Franchise Tax Board, including the CalFile program and free tax preparation services, including the Volunteer Income Tax Assistance program. Notifications shall contain information about available paperless filing options and information about the CalEITC.

(2) Notifications shall be in any form and manner, including electronic communication, determined by the Franchise Tax Board to incentivize potential eligible individuals to timely file federal and state tax returns.

(3) The Franchise Tax Board may coordinate the notifications with other government entities and nonprofit organizations to improve the efficacy and impact of the notifications.

(b) A negative inference shall not be drawn from a taxpayer’s decision not to file a return using the CalFile program or to file a return under a different method.

(c) For purposes of this section, the following definitions shall apply:

(1) “CalEITC” means the California Earned Income Tax Credit allowed under Section 17052.

(2) “Potential eligible individual” means a taxpayer that was an eligible individual for purposes of the CalEITC in any of the three previous taxable years based on the information available to the Franchise Tax Board.

(d) On or before January 1, 2026, the Franchise Tax Board shall submit, pursuant to Section 9795 of the Government Code, a report to the Legislature that contains all of the following information organized by taxable year for taxable years beginning on or after January 1, 2023, and before January 1, 2025:

(1) The cost to administer and implement the notification requirement under this section.

(2) The total number of tax returns filed using paperless filing options offered through the Franchise Tax Board, including the CalFile program.

(3) An analysis of the discernible efficacy and impact of the notification required under this section.

(4) The number of tax returns filed using paperless filing options offered through the Franchise Tax Board that claimed the CalEITC.

(5) The estimated cost savings potential eligible individuals realized by using paperless filing options offered through the Franchise Tax Board.

(e) This section shall remain in effect only until January 1, 2027, and as of that date is repealed.

history: (History: Amended by Stats. 2023, Ch. 131, Sec. 210. (AB 1754) Effective January 1, 2024. Repealed as of January 1, 2027, by its own provisions.)

division: 2. OTHER TAXES

chapter: 7. Administration of Tax

article: 3. Tax Forms

path: 2. OTHER TAXES > 10.2. ADMINISTRATION OF FRANCHISE AND INCOME TAX LAWS > 7. Administration of Tax > 3. Tax Forms


text:
The Legislature finds and declares all of the following:

(a) In addition to standard services that the Franchise Tax Board provides to all taxpayers and the public, the board also, upon request, provides specialized taxpayer services to individuals and entities.

(b) The provision of specialized taxpayer services imposes additional costs on the agency which are borne by all taxpayers.

(c) The full cost of administering specialized taxpayer services should be paid by the individual or entity that requests and receives the specialized taxpayer services, rather than by all taxpayers.

(d) Establishing a specialized service fee is the most efficient and convenient way to recover the full costs of administering and providing specialized taxpayer services.

(e) The amount of the specialized service fee imposed on an individual or an entity pursuant to this article shall be reasonably related to the actual costs incurred by the board to provide the specialized taxpayer service.

(f) The revenues derived from the fees imposed pursuant to this article are not the proceeds of taxes within the meaning Section 3 of Article XIIIA of the California Constitution.

history: (History: Added by Stats. 2004, Ch. 226, Sec. 10. Effective August 16, 2004.)

article: 4. Tax Service Fees

path: 2. OTHER TAXES > 10.2. ADMINISTRATION OF FRANCHISE AND INCOME TAX LAWS > 7. Administration of Tax > 4. Tax Service Fees


text:
(a) Specialized tax services fees shall be imposed upon the following services provided by the board:

(1) Installment payment programs.

(2) Expedited services for:

(A) Corporation revivor requests.

(B) Tax-exempt status requests.

(C) Limited partnership revival confirmation letter requests.

(b) (1) For periods on or after the effective date of this section and prior to January 1, 2006, the Franchise Tax Board shall publish by notice a schedule of specialized tax services fees to be imposed, which notice shall be exempt from the requirements of Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code. The amounts of these fees under this paragraph shall be calculated in the same general manner as required under paragraph (2).

(2) Commencing on January 1, 2006, the amount of the specialized tax services fees shall be established by the board through regulations adopted pursuant to Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, and shall be established in the manner and in the amounts necessary to reimburse the board for the costs of administering the specialized services, including the board’s direct and indirect costs for providing specialized tax services.

(3) For periods on or after the effective date of this section, and prior to January 1, 2011, the amount of the specialized tax service fee for limited partnership revival confirmation letter requests shall be one hundred dollars ($100). Commencing on January 1, 2011, the specialized tax service fee for limited partnership revival confirmation letter requests shall be calculated in the same general manner as required under paragraph (2).

history: (History: Amended by Stats. 2013, Ch. 239, Sec. 5. (AB 672) Effective January 1, 2014.)

part: 10.2. ADMINISTRATION OF FRANCHISE AND INCOME TAX LAWS

article: 4. Tax Service Fees


text: All fees received by the Franchise Tax Board under this article shall be treated as reimbursement for the board’s costs.

article: 4. Tax Service Fees


text: The Franchise Tax Board shall transmit promptly to the Treasurer all moneys and remittances received by it under this part. It shall at the same time furnish copies of the schedules covering the transmittals to the Controller.

history: (History: Added by Stats. 1993, Ch. 31, Sec. 26. Effective June 16, 1993. Operative January 1, 1994, by Sec. 83 of Ch. 31.)

chapter: 8. Disposition of Proceeds

article: 1. Transfers to General Fund

path: 2. OTHER TAXES > 10.2. ADMINISTRATION OF FRANCHISE AND INCOME TAX LAWS > 8. Disposition of Proceeds > 1. Transfers to General Fund


text: Except for amounts collected or accrued under Sections 17935, 17941, 17948, 19532, and 19561, and revenues deposited pursuant to Section 19602.5, all moneys and remittances received by the Franchise Tax Board as amounts imposed under Part 10 (commencing with Section 17001), and related penalties, additions to tax, and interest imposed under this part, shall be deposited, after clearance of remittances, in the State Treasury and credited to the Personal Income Tax Fund.

history: (History: Amended November 2, 2004, by initiative Proposition 63, Sec. 13. Operative January 1, 2005, pursuant to Sec. 16 of Prop. 63.)

article: 1. Transfers to General Fund


text:
(a) There is in the State Treasury the Behavioral Health Services (BHS) Fund. The estimated revenue from the additional tax imposed under Section 17043 for the applicable fiscal year, as determined under subparagraph (B) of paragraph (3) of subdivision (c), shall be deposited to the BHS Fund on a monthly basis, subject to an annual adjustment as described in this section.

(b) (1) Each fiscal year, the Controller shall deposit on a monthly basis in the BHS Fund an amount equal to the applicable percentage of net personal income tax receipts as defined in paragraph (4).

(2) The applicable percentage referred to in paragraph (1) shall be 1.76 percent.

(3) Monthly deposits to the BHS Fund pursuant to this subdivision are subject to suspension pursuant to subdivision (f).

(4) For purposes of this subdivision, “net personal income tax receipts” refers to amounts received by the Franchise Tax Board and the Employment Development Department under the Personal Income Tax Law, as reported by the Franchise Tax Board to the Department of Finance pursuant to law, regulation, procedure, and practice (commonly referred to as the “102 Report”) in effect on the effective date of the act establishing this section.

(c) No later than March 1, 2006, and each March 1 thereafter, the Department of Finance, in consultation with the Franchise Tax Board, shall determine the annual adjustment amount for the following fiscal year.

(1) The “annual adjustment amount” for a fiscal year shall be an amount equal to the amount determined by subtracting the “revenue adjustment amount” for the applicable revenue adjustment fiscal year, as determined by the Franchise Tax Board under paragraph (3), from the “tax liability adjustment amount” for applicable tax liability adjustment tax year, as determined by the Franchise Tax Board under paragraph (2).

(2) (A) (i) The “tax liability adjustment amount” for a tax year is equal to the amount determined by subtracting the estimated tax liability increase from the additional tax imposed under Section 17043 for the applicable year under subparagraph (B) from the amount of the actual tax liability increase from the additional tax imposed under Section 17043 for the applicable tax year, based on the returns filed for that tax year.

(ii) For purposes of the determinations required under this paragraph, actual tax liability increase from the additional tax means the increase in tax liability resulting from the tax of 1 percent imposed under Section 17043 as reflected on the original returns filed by October 15 of the year after the close of the applicable tax year.

(iii) The applicable tax year referred to in this paragraph means the 12-calendar month taxable year beginning on January 1 of the year that is two years before the beginning of the fiscal year for which an annual adjustment amount is calculated.

(B) The “estimated tax liability increase from the additional tax” for each tax year shall be determined by applying an annual growth rate of 7 percent to the “estimated tax liability increase from additional tax” of the immediately preceding tax year.

(3) (A) The “revenue adjustment amount” is equal to the amount determined by subtracting the “estimated revenue from the additional tax” for the applicable fiscal year, as determined under subparagraph (B), from the actual amount transferred for the applicable fiscal year.

(B) (i) The “estimated revenue from the additional tax” for each applicable fiscal year shall be determined by applying an annual growth rate of 7 percent to the “estimated revenue from the additional tax” of the immediately preceding applicable fiscal year.

(ii) The applicable fiscal year referred to in this paragraph means the fiscal year that is two years before the fiscal year for which an annual adjustment amount is calculated.

(d) The Department of Finance shall notify the Legislature and the Controller of the results of the determinations required under subdivision (c) no later than 10 business days after the determinations are final.

(e) If the annual adjustment amount for a fiscal year is a positive number, the Controller shall transfer that amount from the General Fund to the BHS Fund on July 1 of that fiscal year.

(f) If the annual adjustment amount for a fiscal year is a negative number, the Controller shall suspend monthly transfers to the BHS Fund for that fiscal year, as otherwise required by paragraph (1) of subdivision (b), until the total amount of suspended deposits for that fiscal year equals the amount of the negative annual adjustment amount for that fiscal year.

(g) To the extent that there are moneys remaining in the Mental Health Services Fund on the date this section becomes operative, those moneys shall be transferred to the Behavioral Health Services Fund. Amounts owed or encumbered at the time of transfer shall be used in the manner required by the MHSA. Any funds not owed or encumbered by the MHSA may be used in the same manner as any other moneys in the BHS Fund.

(h) This section shall become operative on January 1, 2025, if amendments to the Mental Health Services Act are approved by the voters at the March 5, 2024, statewide primary election.

history: (History: Repealed (in Sec. 7) and added by Stats. 2023, Ch. 790, Sec. 8. (SB 326) Effective October 12, 2023. Operative January 1, 2025, by its own provisions.)

article: 1. Transfers to General Fund


text: The balance of the moneys in the Personal Income Tax Fund shall, upon order of the Controller, be drawn therefrom for the purpose of making refunds under this part or be transferred to the General Fund. All undelivered refund warrants shall be redeposited in the Personal Income Tax Fund upon receipt by the Controller.

article: 1. Transfers to General Fund


text:
(a) Except for fees received for services under Section 23305e, all moneys and remittances received by the Franchise Tax Board as amounts imposed under Part 11 (commencing with Section 23001), and related penalties, additions to tax, fees, and interest imposed under this part, shall be deposited in a special fund in the State Treasury, to be designated the Corporation Tax Fund. The moneys in the fund shall, upon the order of the Controller, be drawn therefrom for the purpose of making refunds under this part or be transferred into the General Fund. All undelivered refund warrants shall be redeposited into the Corporation Tax Fund upon receipt by the Controller. Fees received for services under Section 23305e shall be treated as reimbursement of the Franchise Tax Board’s costs and shall be deposited into the General Fund.

(b) Notwithstanding Section 13340 of the Government Code, all moneys in the Corporation Tax Fund are hereby continuously appropriated, without regard to fiscal year, to the Franchise Tax Board for purposes of making all payments as provided in this section.

history: (History: Amended by Stats. 2001, Ch. 543, Sec. 16. Effective January 1, 2002.)

article: 1. Transfers to General Fund


text: All moneys and remittances received by the Franchise Tax Board as fees imposed under Section 19532 or 19561 shall be treated as reimbursement of the Franchise Tax Board’s costs and shall be deposited into the General Fund.

history: (History: Amended by Stats. 1996, Ch. 952, Sec. 28. Effective January 1, 1997.)

article: 1. Transfers to General Fund


text: All moneys and remittances received by the Franchise Tax Board as amounts imposed under Sections 17935, 17941, and 17948 and related penalties, additions to tax, interest, and other related amounts imposed under this part, shall be deposited, after clearance of remittances, in the State Treasury and credited to the Corporation Tax Fund.

history: (History: Amended by Stats. 2001, Ch. 543, Sec. 17. Effective January 1, 2002.)

article: 1. Transfers to General Fund


text:
(a) The Tax Relief and Refund Account is hereby created in the General Fund. Notwithstanding Section 13340 of the Government Code, all moneys in the Tax Relief and Refund Account are hereby continuously appropriated, without regard to fiscal year, to the Franchise Tax Board for purposes of making all payments as provided in this section.

(b) Notwithstanding any other provision of law, all payments required to be made to taxpayers or other persons from the Personal Income Tax Fund shall be paid from the Tax Relief and Refund Account.

(c) The Controller shall transfer, as needed, to the Tax Relief and Refund Account:

(1) From the unexpended balance of the annual Budget Act appropriation for Item 9100-101-001, Schedule 80-Renter’s Tax Relief, an amount determined by the Franchise Tax Board to be equivalent to the total amount of renters’ assistance credits and refunds allowed under Section 17053.5.

(A) If there is no unexpended balance of the appropriation, as provided for in paragraph (1), the Controller shall transfer sufficient moneys from the Personal Income Tax Fund to make the renters’ assistance credits and refunds until there is an unexpended balance.

(B) Subsequent to there being no unexpended balance of the appropriation, as provided for in paragraph (1), and there being a transfer of moneys from the Personal Income Tax Fund to make the renters’ assistance credits and refunds, reimbursement shall be made from the unexpended balance of the appropriation as provided for in paragraph (1) to the Personal Income Tax Fund. However, if no such appropriation is subsequently made, reimbursement shall be made from the General Fund.

(2) From the disability fund, the amount transferable to the General Fund pursuant to subdivision (a) of Section 1176.5 of the Unemployment Insurance Code.

(3) From the Personal Income Tax Fund, such additional amounts as determined by the Franchise Tax Board to be necessary to make the payments required under this section.

article: 2. Tax Relief and Refund Account

path: 2. OTHER TAXES > 10.2. ADMINISTRATION OF FRANCHISE AND INCOME TAX LAWS > 8. Disposition of Proceeds > 2. Tax Relief and Refund Account


text:
Any person who does any of the following is liable for a penalty of not more than five thousand dollars ($5,000):

(a) With or without intent to evade any requirement of Part 10 (commencing with Section 17001), Part 11 (commencing with Section 23001), or this part or any lawful requirement of the Franchise Tax Board, repeatedly over a period of two years or more, fails to file any return or to supply any information required, or who, with or without that intent, makes, renders, signs, or verifies any false or fraudulent return or statement, or supplies any false or fraudulent information, resulting in an estimated delinquent tax liability of at least fifteen thousand dollars ($15,000).

(b) Aids, abets, advises, encourages, or counsels any person to evade the tax imposed by Part 10 (commencing with Section 17001) or Part 11 (commencing with Section 23001) by not filing any return or supplying any information required under Part 10 (commencing with Section 17001), Part 11 (commencing with Section 23001), or this part, or, by making, rendering, signing, or verifying any false or fraudulent return or statement, or by supplying false or fraudulent information.

(c) Under this part, is required to pay any estimated tax or tax, who willfully fails to pay that estimated tax or tax, at the time or times required by law or regulations.

The penalty shall be recovered in the name of the people in any court of competent jurisdiction. Counsel for the Franchise Tax Board may, upon request of the district attorney or other prosecuting attorney, assist the prosecuting attorney in presenting the law or facts to recover the penalty at the trial of a criminal proceeding for violation of this section.

That person is also guilty of a misdemeanor and shall upon conviction be fined not to exceed five thousand dollars ($5,000) or be imprisoned not to exceed one year, or both, at the discretion of the court, together with costs of investigation and prosecution. The preceding sentence shall not apply to any person who is mentally incompetent, or suffers from dementia, Alzheimer’s disease, or similar condition.

(d) For purposes of subdivision (a), the president of a corporation, or the chief operating officer, is the person presumed to be responsible for filing any return or supplying information required from that corporation.

history: (History: Amended by Stats. 2005, Ch. 74, Sec. 72. Effective July 19, 2005.)

chapter: 9. Violations

path: 2. OTHER TAXES > 10.2. ADMINISTRATION OF FRANCHISE AND INCOME TAX LAWS > 9. Violations


text:
(a) Any person who signs his or her spouse’s name on any income tax return, or any schedules or attachments thereto, or who files electronically pursuant to Section 18621.5, without the consent of the spouse as provided in subdivision (b), is guilty of a misdemeanor and shall upon conviction be fined an amount not to exceed five thousand dollars ($5,000) or be imprisoned for a term not to exceed one year, or both, at the discretion of the court, together with costs of investigation and prosecution.

(b) Notwithstanding subdivision (a), any person who signs his or her spouse’s name shall not be guilty of a misdemeanor when one spouse is physically unable by reason of disease or injury to sign a joint return, and the other spouse, with the oral consent of the one who is incapacitated, signs the incapacitated spouse’s name in the proper place on the return followed by the words “By ____, Spouse (or Husband or Wife),” and by the signature of the signing spouse in his or her own right, provided that a dated statement signed by the spouse who is signing the return is attached to and made a part of the return stating each of the following:

(1) The name of the return being filed.

(2) The taxable year.

(3) The reason for the inability of the spouse who is incapacitated to sign the return.

(4) That the spouse who is incapacitated consented to the signing of the return and that the taxpayer and his or her agent, if any, are responsible for the return as made and incur liability for the penalties provided for erroneous, false, or fraudulent returns.

(c) The penalties provided by this section are cumulative and shall not be construed as restricting any other penalty provided by law based upon the same facts, including any penalty under Section 470 of the Penal Code. However, an act or omission which is made punishable in different ways by this section and different provisions of the Penal Code shall not be punished under more than one provision.

history: (History: Amended by Stats. 2016, Ch. 50, Sec. 111. (SB 1005) Effective January 1, 2017.)


text: The prosecutor may, with the consent of the Franchise Tax Board, compromise any penalty for which he or she may bring action under this chapter. The penalties provided by this chapter are additional to all other penalties provided in Part 10 (commencing with Section 17001), Part 11 (commencing with Section 23001), or this part.

history: (History: Amended by Stats. 1993, Ch. 877, Sec. 30.1. Effective October 6, 1993. Operative January 1, 1994, by Sec. 102 of Ch. 877.)


text: The certificate of the Franchise Tax Board to the effect that a return has not been filed or that information has not been supplied as required by this part is prima facie evidence that the return has not been filed or that the information has not been supplied.


text: Any action or prosecution under this chapter shall be instituted within six years after commission of the offense.


text:
(a) Any person who does any of the following shall be guilty of a felony and, upon conviction, shall be fined not more than fifty thousand dollars ($50,000) or imprisoned pursuant to subdivision (h) of Section 1170 of the Penal Code, or both, together with the costs of investigation and prosecution:

(1) Willfully makes and subscribes any return, statement, or other document, that contains or is verified by a written declaration that it is made under penalty of perjury, and he or she does not believe to be true and correct as to every material matter.

(2) Willfully aids or assists in, or procures, counsels, or advises the preparation or presentation under, or in connection with any matter arising under, the Personal Income Tax Law or the Corporation Tax Law, of a return, affidavit, claim, or other document, that is fraudulent or is false as to any material matter, whether or not that falsity or fraud is with the knowledge or consent of the person authorized or required to present that return, affidavit, claim, or document.

(3) Simulates or falsely or fraudulently executes or signs any bond, permit, entry, or other document required by the provisions of the Personal Income Tax Law or the Corporation Tax Law, or by any regulation pursuant to that law, or procures the same to be falsely or fraudulently executed or advises, aids in, or connives at that execution.

(4) Removes, deposits, or conceals, or is concerned in removing, depositing, or concealing, any goods or commodities for or in respect whereof any tax is or shall be imposed, or any property upon which levy is authorized by Chapter 5 (commencing with Section 19201); or Chapter 8 (commencing with Section 688.010) of Division 1 of, and Chapter 5 (commencing with Section 706.010) of Division 2 of, Title 9 of the Code of Civil Procedure, with intent to evade or defeat the assessment or collection of any tax, additions to tax, penalty, or interest imposed by Part 10 (commencing with Section 17001), Part 11 (commencing with Section 23001), or this part.

(5) In connection with any settlement under Section 19442, or offer of that settlement, or in connection with any closing agreement under Section 19441 or offer to enter into that agreement, or compromise under Section 19443, or offer of that compromise, willfully does any of the following:

(A) Conceals from any officer or employee of this state any property belonging to the estate of a taxpayer or other person liable in respect of the tax.

(B) Receives, withholds, destroys, mutilates, or falsifies any book, document, or record, or makes any false statement, relating to the estate or financial condition of the taxpayer or other person liable in respect of the tax.

(b) In the case of a corporation, the fifty thousand dollars ($50,000) limitation specified in subdivision (a) shall be increased to two hundred thousand dollars ($200,000).

(c) The fact that an individual’s name is signed to a return, statement, or other document filed, including a return, statement, or other document filed using electronic technology pursuant to Section 18621.5, shall be prima facie evidence for all purposes that the return, statement, or other document was actually signed by him or her.

(d) For purposes of this section, “person” means the taxpayer, any member of the taxpayer’s family, any corporation, agent, fiduciary, or representative of, or any other individual or entity acting on behalf of, the taxpayer, or any other corporation or entity owned or controlled by the taxpayer, directly or indirectly, or which owns or controls the taxpayer, directly or indirectly.

(e) The changes made to this section by the act adding this subdivision apply to offers made on or after January 1, 1999.

history: (History: Amended by Stats. 2011, Ch. 15, Sec. 572. (AB 109) Effective April 4, 2011. Operative October 1, 2011, by Sec. 636 of Ch. 15, as amended by Stats. 2011, Ch. 39, Sec. 68.)


text: Any person or any officer or employee of any corporation who, within the time required by or under the provisions of this part, willfully fails to file any return or to supply any information with intent to evade any tax imposed by Part 10 (commencing with Section 17001) or Part 11 (commencing with Section 23001), or who, willfully and with like intent, makes, renders, signs, or verifies any false or fraudulent return or statement or supplies any false or fraudulent information, is punishable by imprisonment in the county jail not to exceed one year, or in the state prison, or by fine of not more than twenty thousand dollars ($20,000), or by both the fine and imprisonment, at the discretion of the court, together with the costs of investigation and prosecution.

history: (History: Amended by Stats. 1997, Ch. 605, Sec. 44. Effective January 1, 1998.)


text:
The place of trial for the offenses enumerated in this chapter shall be in the county of residence or principal place of business of the defendant or defendants at the time of commission of the offense. However, if the defendant or defendants had no residence or principal place of business in this state at the time of commission of the offense, the trial shall be held in the County of Sacramento.

In a criminal case charging a defendant or defendants with committing an offense enumerated in this chapter, the place of trial may be as set forth in this section, or as provided for in Section 1462.2 or Chapter 1 (commencing with Section 777) of Title 3 of Part 2 of the Penal Code.

history: (History: Amended by Stats. 2002, Ch. 784, Sec. 585. Effective January 1, 2003.)


text: Any person required under this part to collect, account for, and pay over any tax or amount required to be withheld who willfully fails to collect or truthfully account for and pay over the tax or amount shall, in addition to other penalties provided by law, be guilty of a felony, and, upon conviction thereof, shall be fined not more than two thousand dollars ($2,000) or imprisoned pursuant to subdivision (h) of Section 1170 of the Penal Code, or both.

history: (History: Amended by Stats. 2011, Ch. 15, Sec. 573. (AB 109) Effective April 4, 2011. Operative October 1, 2011, by Sec. 636 of Ch. 15, as amended by Stats. 2011, Ch. 39, Sec. 68.)


text: Any person who, with or without intent to evade, fails to withhold, pursuant to Section 18662 or 18666, or pay over any tax withheld, is guilty of a misdemeanor, and, upon conviction be fined an amount not to exceed one thousand dollars ($1,000) or imprisoned for not more than one year, or both, at the discretion of the court.


text: If a taxpayer fails to file a return within 60 days after the Franchise Tax Board issues a notice and demand for the return, the Franchise Tax Board may petition the court for a writ of mandate to require the taxpayer to file a return. The judgment shall include costs in favor of the prevailing party.


text: Any individual required to supply information to his or her employer under Section 13040, 13041, or 13042 of the Unemployment Insurance Code, who willfully supplies false or fraudulent information, or who willfully fails to supply information thereunder which would require an increase in the tax to be withheld under Section 13020 of the Unemployment Insurance Code, shall, in addition to any other penalty otherwise provided by law, upon conviction thereof, be fined not more than one thousand dollars ($1,000), or imprisoned not more than one year, or both.


text:
Any tax preparer, as defined in subdivision (b) of Section 19169, who endorses or otherwise negotiates (directly or through an agent) any warrant made in respect of the taxes imposed by Part 10 (commencing with Section 17001) or Part 11 (commencing with Section 23001) which is issued to a taxpayer (other than the tax preparer) shall, in addition to other penalties provided by law, be guilty of a misdemeanor, and upon conviction thereof, shall be fined not more than one thousand dollars ($1,000) or imprisoned not more than one year, or both, together with the costs of prosecution.

This section shall not apply where the tax preparer has advanced the taxpayer an amount of money equal to or greater than the amount of the taxpayer’s tax refund.


text:
(a) Any person or employer who fails to comply with subdivision (b) of Section 19009 shall, in addition to any other penalties provided by law, be guilty of a misdemeanor, and, upon conviction thereof, shall be fined no more than five thousand dollars ($5,000), or imprisoned not more than one year, or both, together with the costs of prosecution.

(b) This section shall not apply:

(1) To any person or employer, if that person or employer shows that there was reasonable doubt as to (A) whether the law required collection of the tax, or (B) who was required by law to collect the tax.

(2) To any person or employer, if that person or employer shows that the failure to comply with the provisions of subdivision (b) of Section 19009 was due to circumstances beyond his or her control.

(c) For purposes of paragraph (2), a lack of funds existing immediately after the payment of wages (whether or not created by the payment of the wages) shall not be considered to be circumstances beyond the control of a person or employer.


text: Whenever it appears to the State Board of Equalization or any court of record of this state that proceedings before it under this part have been instituted or maintained by the taxpayer primarily for delay or that the taxpayer’s position in the proceedings is frivolous or groundless, or that the taxpayer unreasonably failed to pursue available administrative remedies, a penalty in an amount not in excess of five thousand dollars ($5,000) shall be imposed. Any penalty so imposed shall be paid upon notice and demand from the Franchise Tax Board and shall be collected as a tax.


text:
(a) A civil action in the name of the State of California to enjoin any person from further engaging in specified conduct may be commenced at the request of the Franchise Tax Board. Any action under this section shall be brought in accordance with Section 19707. The court may exercise its jurisdiction over that action separate and apart from any other action brought by the State of California against that person.

(b) In any action under subdivision (a), the court may enjoin the person from engaging in the specified conduct or in any other activity subject to penalty under this part, if the court finds both of the following:

(1) That the person has engaged in any specified conduct.

(2) That injunctive relief is appropriate to prevent recurrence of that specified conduct.

(c) For purposes of this section, the term “specified conduct” means any action, or failure to take action, subject to penalty under Section 19173, 19174, 19177, or 19178.

history: (History: Amended by Stats. 2003, Ch. 656, Sec. 12. Effective January 1, 2004.)


text:
(a) The prevailing party may be awarded a judgment for reasonable litigation costs incurred, in the case of any civil proceeding brought by or against the State of California in a court of record of this state in connection with the determination, collection, or refund of any tax, interest, or penalty under this part.

(b) (1) A judgment for reasonable litigation costs shall not be awarded under subdivision (a) unless the court determines that the prevailing party has exhausted all administrative remedies available to that party under this part, including the filing of an appeal as provided in Section 19324. Any failure to agree to an extension of the time for the assessment of any tax shall not be taken into account for purposes of determining whether the prevailing party meets the requirements of the preceding sentence.

(2) An award under subdivision (a) shall be made only for reasonable litigation costs which are allocable to the State of California and not to any other party to the action or proceeding.

(3) No award for reasonable litigation costs may be made under subdivision (a) with respect to any portion of the civil proceeding during which the prevailing party has unreasonably protracted that proceeding.

(c) For purposes of this section:

(1) “Reasonable litigation costs” includes any of the following:

(A) Reasonable court costs.

(B) Based upon prevailing market rates for the kind or quality of services furnished, any of the following:

(i) The reasonable expenses of expert witnesses in connection with the civil proceeding, except that no expert witness shall be compensated at a rate in excess of the highest rate of compensation for expert witnesses paid by the State of California.

(ii) The reasonable cost of any study, analysis, engineering report, test, or project which is found by the court to be necessary for the preparation of the party’s case.

(iii) Reasonable fees paid or incurred for the services of attorneys in connection with the civil proceeding, except that those fees shall not be in excess of one hundred twenty-five dollars ($125) per hour unless the court determines that a special factor, such as the limited availability of qualified attorneys for the proceeding, the difficulty of the issues presented in the case, or the local availability of tax expertise justifies a higher rate. In the case of each calendar year beginning with calendar year 2001, the Franchise Tax Board shall recompute the dollar amount referred to in the preceding sentence. That computation shall be made by increasing the amount in this clause by an amount equal to the cost-of-living adjustment determined under subdivision (h) of Section 17041. If any resulting dollar amount is not a multiple of ten dollars ($10), that dollar amount shall be rounded to the nearest multiple of ten dollars ($10).

(iv) The court may award reasonable attorney fees under subdivision (a) in excess of the attorney fees paid or incurred if the fees are less than the reasonable attorneys’ fees because the attorney is representing the prevailing party for no fee or for a fee which (taking into account all the facts and circumstances) is no more than a nominal fee. This clause shall apply only if the award is paid to the attorney or the attorney’s employer.

(2) (A) “Prevailing party” means any party to any proceeding described in subdivision (a) (other than the State of California or any creditor of the taxpayer involved) that meets either of the following criteria:

(i) Has substantially prevailed with respect to the amount in controversy.

(ii) Has substantially prevailed with respect to the most significant issue or set of issues presented.

(B) (i) A party shall not be treated as the prevailing party in a proceeding to which subdivision (a) applies if the State of California establishes that its position in the proceeding was substantially justified.

(ii) For purposes of clause (i), the position of the State of California shall be presumed not to be substantially justified if the Franchise Tax Board did not follow its applicable published guidance in the administrative proceeding. This presumption may be rebutted.

(iii) For purposes of clause (ii), the term “applicable published guidance” means either of the following:

(I) A regulation, legal ruling, notice, information release, or announcement.

(II) Any chief counsel ruling or determination letter issued to the taxpayer.

(iv) For purposes of clause (i), in determining whether the position of the Franchise Tax Board was substantially justified, the court shall take into account whether the Franchise Tax Board has lost in any California Court of Appeal in another district on substantially similar issues, as reflected in a decision certified for publication.

(C) Any determination under this paragraph as to whether a party is a prevailing party shall be made by either of the following:

(i) The court.

(ii) An agreement of the parties.

(3) The term “civil proceeding” includes a civil action.

(d) For purposes of this section, in the case of multiple actions which could have been joined or consolidated, or a case or cases involving a return or returns of the same taxpayer (including joint returns of married individuals) which could have been joined in a single proceeding in the same court, the actions or cases shall be treated as one civil proceeding regardless of whether the joinder or consolidation actually occurs, unless the court in which the action is brought determines, in its discretion, that it would be inappropriate to treat the actions or cases as joined or consolidated for purposes of this section.

(e) An order granting or denying an award for reasonable litigation costs under subdivision (a), in whole or in part, shall be incorporated as a part of the decision or judgment in the case and shall be subject to appeal in the same manner as the decision or judgment.

(f) For purposes of this section, “position of the State of California” includes either of the following:

(1) The position taken by the State of California in the civil proceeding.

(2) Any administrative action or inaction by the Franchise Tax Board (and all subsequent administrative action or inaction) upon which that proceeding is based.

(g) The amendments made by the act amending this subdivision are effective for costs incurred and services performed more than 180 days after the effective date of the act amending this subdivision.

history: (History: Amended by Stats. 1999, Ch. 931, Sec. 33. Effective October 10, 1999.)


text:
Any employer or agent of an employer who provides a wage statement or similar document to any undocumented worker or former undocumented worker at that person’s request for the purpose of documenting that person’s eligibility for legalization pursuant to the federal Immigration Reform and Control Act (Public Law 99-603), shall not be liable for any penalty or criminal or civil violation under this part relative to the undocumented worker or former undocumented worker based on any facts disclosed in the wage statement or similar document so provided.

Nothing in this section shall be construed to limit the liability under any provision of law of any person who engages in the procurement or production of false or fraudulent wage statements or similar documents to any person for purposes of legalization under the federal Immigration Reform and Control Act.

This section does not apply to penalties assessed or criminal actions filed prior to May 1, 1987.

This section does not apply where the Employment Development Department, through independent means, discovers that an employer has withheld personal income tax and disability insurance contributions from workers’ paychecks and has not remitted those moneys to the department.

The immunity from liability pursuant to this section shall apply only to facts disclosed in the wage statement or similar document provided on or after the effective date of this section and only until the date of the termination of the legalization provisions for agricultural and nonagricultural workers of the federal Immigration Reform and Control Act. However, the immunity from liability pursuant to this section shall continue until the cause of action is tolled by the applicable statute of limitations.


text:
(a) Any person who attempts or purports to exercise the powers, rights, and privileges of a corporation that has been suspended pursuant to Section 23301 or who transacts or attempts to transact intrastate business in this state on behalf of a foreign corporation, the rights and privileges of which have been forfeited pursuant to the section, is punishable by a fine of not less than two hundred fifty dollars ($250) and not exceeding one thousand dollars ($1,000), or by imprisonment not exceeding one year, or both fine and imprisonment.

(b) This section shall not apply to any insurer, or to counsel retained by an insurer on behalf of the suspended corporation, who provides a defense for a suspended corporation in a civil action based upon a claim for personal injury, property damage, or economic losses against the suspended corporation, and, in conjunction with this defense, prosecutes subrogation, contribution, or indemnity rights against persons or entities in the name of the suspended corporation.

(c) Nothing in this section shall create or limit any obligation upon an insurer to defend a suspended corporation.

history: (History: Amended by Stats. 1998, Ch. 856, Sec. 2. Effective January 1, 1999.)


text:
(a) Any person who does any of the following is liable for a penalty of not more than five thousand dollars ($5,000):

(1) Utters, passes, or negotiates a state-issued income tax refund warrant generated as a result of the filing of a return knowing that the recipient is not entitled to the refund.

(2) Procures a state-issued income tax refund, in any form, generated as a result of the filing of a return knowing that the recipient is not entitled to the refund.

(3) Aids, abets, advises, encourages, or counsels any individual to utter, pass, or negotiate a state-issued income tax refund warrant, or to procure a state-issued income tax refund, in any form, generated as a result of the filing of a return, knowing that the recipient is not entitled to a refund.

(b) The fact that an individual’s name is endorsed to a state-issued refund warrant shall be prima facie evidence for all purposes that the refund warrant was actually signed by him or her.

(c) The penalty shall be recovered in the name of the people in any court of competent jurisdiction. Counsel for the Franchise Tax Board may, upon request of the district attorney or other prosecuting attorney, assist the prosecuting attorney in presenting the law or facts to recover the penalty at the trial of a criminal proceeding for violation of this section.

(d) The person is also guilty of a misdemeanor and upon conviction shall be punishable by a fine not to exceed ten thousand dollars ($10,000) or by imprisonment not to exceed one year, or both, at the discretion of the court, together with costs of investigation and prosecution.

(e) Any individual guilty under this part shall be subject to Section 502.01 of the Penal Code.

history: (History: Amended by Stats. 2004, Ch. 163, Sec. 1. Effective January 1, 2005.)


text:
(a) Any person who, with intent to defraud, does any of the following is liable for a penalty of not more than ten thousand dollars ($10,000):

(1) Willfully utters, passes, or negotiates a state-issued income tax refund warrant generated as a result of the filing of a return knowing that the recipient is not entitled to the refund.

(2) Willfully procures a state-issued income tax refund, in any form, generated as a result of the filing of a return knowing that the recipient is not entitled to the refund.

(3) Willfully aids, abets, advises, encourages, or counsels any individual to utter, pass, or negotiate a state-issued income tax refund warrant, or to procure a state-issued income tax refund, in any form, generated as a result of the filing of a return, knowing the recipient is not entitled to the refund.

(b) The person is also punishable by imprisonment in a county jail not to exceed one year, or in the state prison, or by a fine not to exceed fifty thousand dollars ($50,000), or by both that fine and imprisonment, at the discretion of the court, together with the costs of investigation and prosecution.

(c) The fact that an individual’s name is endorsed to a state-issued refund warrant shall be prima facie evidence for all purposes that the refund warrant was actually signed by him or her.

(d) The penalty shall be recovered in the name of the people in any court of competent jurisdiction. Counsel for the Franchise Tax Board may, upon request of the district attorney or other prosecuting attorney, assist the prosecuting attorney in presenting the law or facts to recover the penalty at the trial or a criminal proceeding for violation of this section.

(e) Any individual guilty under this part shall be subject to Section 502.01 of the Penal Code.

history: (History: Amended by Stats. 2004, Ch. 163, Sec. 2. Effective January 1, 2005.)


text:
(a) (1) Restitution orders or any other amounts imposed by a court of competent jurisdiction for criminal offenses upon a person or any other entity that are due and payable to the Franchise Tax Board may be collected by the Franchise Tax Board in any manner provided by law for collection of a delinquent income tax liability, including, but not limited to, issuance of an order and levy under Article 4 (commencing with Section 706.070) of Chapter 5 of Division 2 of Title 9 of Part 2 of the Code of Civil Procedure in the manner provided for earnings withholding orders for taxes.

(2) Amounts imposed by a court of competent jurisdiction as an order of restitution for criminal offenses shall be treated as final and due and payable to the State of California on the date that amount is established on the records of the Franchise Tax Board.

(b) Part 10 (commencing with Section 17001), this part, Part 10.7 (commencing with Section 21001), and Part 11 (commencing with Section 23001) shall apply to amounts collected under this section in the same manner and with the same force and effect and to the full extent as if the language of those laws had been incorporated in full into this section, except to the extent that any provision is either inconsistent with this section or is not relevant to this section.

(c) Notwithstanding Chapter 6 (commencing with Section 19301), no refund or credit may be allowed for any amounts paid or payments applied under this section.

(d) Amounts authorized to be collected pursuant to this section shall accrue interest at the greater of the rate applicable to the amounts being collected or the rate provided under Section 19521 from and after the date the amounts are established on the records of the Franchise Tax Board.

(e) Amounts authorized to be collected pursuant to this section are not subject to Section 19255.

(f) Notwithstanding Section 19204 or Chapter 14 (commencing with Section 7150) of Division 7 of Title 1 of the Government Code, any portion of the amounts authorized to be collected under this section that remain unsatisfied may be collected by the recording of a Notice of State Tax Lien. The Franchise Tax Board may record or extend a recorded Notice of State Tax Lien at any time until the amount due, including any accrued interest, is paid in full.

(g) The Franchise Tax Board may retain those amounts ordered to be paid by a court of competent jurisdiction by a person or any other entity for the costs of investigation incurred by the Franchise Tax Board.

(h) This section shall apply on and after January 1, 2011, to amounts authorized to be collected pursuant to this section that are due and payable to the Franchise Tax Board before, on, or after January 1, 2011.

history: (History: Added by Stats. 2010, Ch. 359, Sec. 2. (AB 1530) Effective January 1, 2011.)


text: The Franchise Tax Board shall administer a tax amnesty program for taxpayers subject to Part 10 (commencing with Section 17001) and Part 11 (commencing with Section 23001), as provided in this chapter.

history: (History: Added by Stats. 2004, Ch. 226, Sec. 11. Effective August 16, 2004.)

chapter: 9.1. Tax Amnesty

path: 2. OTHER TAXES > 10.2. ADMINISTRATION OF FRANCHISE AND INCOME TAX LAWS > 9.1. Tax Amnesty


text: The tax amnesty program shall be conducted during a two-month period beginning February 1, 2005, and ending March 31, 2005, inclusive, or during a timeframe ending no later than June 30, 2005, pursuant to Section 19733. The program shall apply to tax liabilities for taxable years beginning before January 1, 2003.


text:
(a) For any taxpayer who meets each of the requirements of Section 19733 both of the following apply:

(1) The Franchise Tax Board shall waive all unpaid penalties and fees imposed by this part for each taxable year for which tax amnesty is allowed, but only to the extent of the amount of any penalty or fee that is owed as a result of previous nonreporting or underreporting of tax liabilities or prior nonpayment of any taxes previously assessed or proposed to be assessed for that taxable year.

(2) Except as provided in subdivision (b), no criminal action shall be brought against the taxpayer for the taxable years for which tax amnesty is allowed for the nonreporting or underreporting of tax liabilities or the nonpayment of any taxes previously assessed or proposed to be assessed.

(b) This chapter shall not apply to violations of this part, for which, as of February 1, 2005, any of the following applies:

(1) The taxpayer is on notice of a criminal investigation by a complaint having been filed against the taxpayer.

(2) The taxpayer is under criminal investigation.

(3) A court proceeding has already been initiated.

(c) This section shall not apply to any nonreported or underreported tax liability amounts attributable to tax shelter items that could have been reported under either the voluntary compliance initiative under Chapter 9.5 (commencing with Section 19751) or the Internal Revenue Service’s Offshore Voluntary Compliance Initiative described in Revenue Procedure 2003–11.

(d) No refund or credit shall be granted with respect to any penalty or fee paid with respect to a taxable year prior to the time the taxpayer makes a request for tax amnesty for that taxable year pursuant to Section 19733.

(e) Notwithstanding Chapter 6 (commencing with Section 19301), a taxpayer may not file a claim for refund or credit for any amounts paid in connection with the tax amnesty program under this chapter.

history: (History: Amended by Stats. 2005, Ch. 398, Sec. 4. Effective September 29, 2005.)


text:
(a) This chapter shall apply to any taxpayer who satisfies all of the following requirements:

(1) During the tax amnesty program period specified in Section 19731, is eligible to participate in the tax amnesty program.

(2) During the tax amnesty program period specified in Section 19731, files a completed amnesty application with the Franchise Tax Board, signed under penalty of perjury, electing to participate in the tax amnesty program.

(3) Within 60 days after the conclusion of the tax amnesty period, does the following:

(A) (i) For any taxable year eligible for the tax amnesty program where the taxpayer has not filed any required return, files a completed original tax return for that year, or

(ii) For any taxable year eligible for the tax amnesty program where the taxpayer filed a return but underreported tax liability on that return, files an amended return for that year.

(B) Pays in full any taxes and interest due for each taxable year described in clauses (i) and (ii) of subparagraph (A), as applicable, for which amnesty is requested, or applies for an installment payment agreement under subdivision (b). For taxpayers who have not paid in full any taxes previously proposed to be assessed, pays in full the taxes and interest due for that portion of the proposed assessment for each taxable year for which amnesty is requested or applies for an installment payment agreement under subdivision (b).

(4) For purposes of complying with the full payment provisions of paragraph (3) of subdivision (a), if the full amount due is paid within the period set forth in paragraph (3) of subdivision (c) of Section 19101 after the date the Franchise Tax Board mails a notice resulting from the filing of an amnesty application or the full amount is paid within 60 days after the conclusion of the tax amnesty period, the full amount due shall be treated as paid during the amnesty period.

(5) In the case of any taxpayer that has filed for bankruptcy protection under Title 11 of the United States Code, submits an order from a Federal Bankruptcy Court allowing the taxpayer to participate in the amnesty program.

(b) (1) For purposes of complying with the full payment provisions of subparagraph (B) of paragraph (3) of subdivision (a), the Franchise Tax Board may enter into an installment payment agreement, but only if final payment under the terms of that installment payment agreement is due and is paid no later than June 30, 2006.

(2) Any installment payment agreement authorized by this subdivision shall include interest on the outstanding amount due at the rate prescribed in Section 19521.

(3) Failure by the taxpayer to fully comply with the terms of an installment payment agreement under this subdivision shall render the waiver of penalties and fees under Section 19732 null and void, unless the Franchise Tax Board determines that the failure was due to reasonable cause and not due to willful neglect.

(4) In the case of any failure described under paragraph (3), the total amount of tax, interest, fees, and all penalties shall become immediately due and payable.

(c) (1) The application required under paragraph (2) of subdivision (a) shall be in the form and manner specified by the Franchise Tax Board, but in no case shall a mere payment of any taxes and interest due, in whole or in part, for any taxable year otherwise eligible for amnesty under this part, be deemed to constitute an acceptable amnesty application under this part. For purposes of the prior sentence, the application of a refund from one taxable year to offset a tax liability from another taxable year otherwise eligible for amnesty shall not, without the filing of an amnesty application, be deemed to constitute an acceptable amnesty application under this part.

(2) The Legislature specifically intends that the Franchise Tax Board, in administering the amnesty application requirement under this part, make the amnesty application process as streamlined as possible to ensure participation in the amnesty program will be available to as many taxpayers as possible without otherwise compromising the Franchise Tax Board’s ability to enforce and collect the taxes imposed under Part 10 (commencing with Section 17001) and Part 11 (commencing with Section 23001).

(d) Upon the conclusion of the tax amnesty program period, the Franchise Tax Board may propose a deficiency upon any return filed pursuant to subparagraph (A) of paragraph (3) of subdivision (a), impose penalties and fees, or initiate criminal action under this part with respect to the difference between the amount shown on that return and the correct amount of tax. This action shall not invalidate any waivers previously granted under Section 19732.

(e) All revenues derived pursuant to subdivision (c) shall be subject to Sections 19602 and 19604.

history: (History: Amended by Stats. 2005, Ch. 398, Sec. 5. Effective September 29, 2005. Applicable as provided in Sec. 10 of Ch. 398.)


text: Notwithstanding any other provision of this chapter, if any overpayment of tax shown on an original or amended return filed under this article is refunded or credited within 180 days after the return is filed, no interest shall be allowed under Section 19340 on that overpayment.


text:
(a) The Franchise Tax Board may issue forms, instructions, notices, rules, or guidelines, and take any other necessary actions, needed to implement this chapter, specifically including any forms, instructions, notices, rules, or guidelines that specify the form and manner of any acceptable form of amnesty application described in Section 19733.

(b) Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code does not apply to any standard, criterion, procedure, determination, rule, notice, or guideline established or issued by the Franchise Tax Board pursuant to this chapter.


text:
(a) The Franchise Tax Board shall conduct a public outreach program and adequately publicize the tax amnesty program so as to maximize public awareness and to make taxpayers aware of the program. In addition, the Franchise Tax Board shall make taxpayers aware of the new and increased penalties associated with taxpayer failure to participate in the tax amnesty program.

(b) The Franchise Tax Board shall make reasonable efforts to identify taxpayer liabilities and, to the extent practicable, will send written notice to taxpayers of their eligibility for the tax amnesty program. However, failure of the Franchise Tax Board to notify a taxpayer of the existence or correct amount of a tax liability eligible for amnesty shall not preclude the taxpayer from participating in the tax amnesty program, nor shall such failure be grounds for abating the penalty imposed under Section 19777.5.


text: Any taxpayer who has an existing installment payment agreement under Section 19008 as of the start of the amnesty program, and who does not participate in the amnesty program, may not be subject to the penalty imposed under Section 19777.5 with respect to amounts payable under that agreement.

history: (History: Amended by Stats. 2005, Ch. 398, Sec. 7. Effective September 29, 2005. Applicable as provided in Sec. 10 of Ch. 398.)


text:
(a) The Franchise Tax Board shall develop and administer a voluntary compliance initiative for taxpayers subject to Part 10 (commencing with Section 17001) and Part 11 (commencing with Section 23001), as provided in this article.

(b) The voluntary compliance initiative shall be conducted during the period from January 1, 2004, to April 15, 2004, inclusive, pursuant to Section 19754. This initiative shall apply to tax liabilities attributable to the use of abusive tax avoidance transactions for taxable years beginning before January 1, 2003.

(c) The Franchise Tax Board shall issue forms and instructions and may take any other actions necessary, including the use of closing agreements, to implement this article.

(d) The Franchise Tax Board shall publicize the voluntary compliance initiative so as to maximize public awareness of and participation in the initiative. The Franchise Tax Board shall coordinate to the highest degree possible its publicity efforts and other actions taken in implementing this article.

(e) Any correspondence mailed by the Franchise Tax Board to a taxpayer at the taxpayer’s last known address outlining the voluntary compliance initiative under this article constitutes “contact” within the meaning of Treasury Regulation Section 1.6664-2(c)(3), relating to qualified amended returns, and paragraph (3) of the former subdivision (e) of Section 19773 and Section 19777.

history: (History: Amended (as added by Stats. 2003, Ch. 656) by Stats. 2011, Ch. 14, Sec. 11. (SB 86) Effective March 24, 2011.)

chapter: 9.5. Tax Shelters

article: 1. Voluntary Compliance Initiative One

path: 2. OTHER TAXES > 10.2. ADMINISTRATION OF FRANCHISE AND INCOME TAX LAWS > 9.5. Tax Shelters > 1. Voluntary Compliance Initiative One


text:
Any taxpayer who meets the requirements of Section 19754 may elect the application of either, but not both, of the following:

(a) Voluntary compliance without appeal. If this option is elected, then each of the following shall apply:

(1) The Franchise Tax Board shall waive or abate all penalties imposed by this part, for all taxable years where the taxpayer elects to participate in the initiative, as a result of the underreporting of tax liabilities attributable to the use of abusive tax avoidance transactions.

(2) Except as provided in Section 19753, no criminal action shall be brought against the taxpayer for the taxable years with respect to issues for which the taxpayer voluntarily complies under this article.

(3) No penalty may be waived or abated under this article if the penalty imposed is attributable to an assessment of taxes that became final prior to December 31, 2003.

(4) Notwithstanding Chapter 6 (commencing with Section 19301) of this part, the taxpayer may not file a claim for refund for the amounts paid in connection with abusive tax avoidance transactions under this article.

(b) Voluntary compliance with appeal. If this option is elected, then each of the following shall apply:

(1) The Franchise Tax Board shall waive or abate all penalties, except the accuracy related penalty under Section 19164 (as in effect immediately before enactment of the act adding this section), imposed by this part, for each of the taxable years for which the taxpayer elects to participate in the initiative, that are owed as a result of the underreporting of tax liabilities attributable to the use of abusive tax avoidance transactions.

(2) Except as provided in Section 19753, no criminal action may be brought against the taxpayer for each of the taxable years for which the taxpayer voluntarily complies under this section.

(3) No penalty may be waived under this article if the penalty imposed is attributable to an assessment of taxes that became due and payable prior to December 31, 2003.

(4) The taxpayer may file a claim for refund under Chapter 6 (commencing with Section 19301) of this part. Notwithstanding Section 19331, the taxpayer may not file an appeal to the board until after either of the following:

(A) The date the Franchise Tax Board takes action on the claim for refund for the tax year to which this article applies.

(B) The later of either of the following dates:

(i) The date that is 180 days after the date of a final determination by the Internal Revenue Service with respect to the transaction or transactions to which this article applies.

(ii) The date that is four years after the date the claim for refund was filed or one year after full payment of all tax, including penalty and interest was made, whichever date is later.

(5) The taxpayer shall be subject to the accuracy related penalty under Section 19164.

(A) The penalty may be assessed:

(i) When the Franchise Tax Board takes action on the claim for refund.

(ii) When a federal determination becomes final for the same issue, in which case the penalty shall be assessed (and may not be abated) if the penalty was assessed at the federal level.

(B) In determining the amount of the underpayment of tax, Treasury Regulation Section 1.6664-2(c)(2), as promulgated under Section 6664 of the Internal Revenue Code, relating to qualified amended returns, shall not apply. The amount of the underpayment is the difference between the amount of tax shown on the original return and the correct amount of tax for the taxable year. The underpayment amount shall not be less than the amount of the claim for refund filed by the taxpayer under paragraph (4) that was denied.

(C) The penalty is due and payable upon notice and demand pursuant to Section 19049. Only after the taxpayer has paid all amounts due, including the penalty, and the claim is denied in whole or in part, may the taxpayer file an appeal under Chapter 6 (commencing with Section 19301), of this part in conjunction with the appeal filed under paragraph (4).

(c) A taxpayer’s election under this section shall be made for all taxable years of the taxpayer governed by this article. A separate election for each taxable year governed by this article is not allowed.

history: (History: Amended (as added by Stats. 2003, Ch. 656) by Stats. 2011, Ch. 14, Sec. 13. (SB 86) Effective March 24, 2011.)

article: 1. Voluntary Compliance Initiative One


text:
(a) This article 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 article.

(c) For purposes of this article, 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 paragraph (4) of subdivision (a) of Section 18407.

history: (History: Amended (as added by Stats. 2003, Ch. 656) by Stats. 2011, Ch. 14, Sec. 15. (SB 86) Effective March 24, 2011.)

article: 1. Voluntary Compliance Initiative One


text:
(a) The voluntary compliance initiative described in this article applies to any taxpayer who was not eligible to participate in the Internal Revenue Service’s Offshore Voluntary Compliance Initiative described in Revenue Procedure 2003–11, and during the period from January 1, 2004, to April 15, 2004, does both of the following:

(1) Files an amended tax return under this part for each taxable year for which the taxpayer has previously filed a tax return using an abusive tax avoidance transaction to underreport the taxpayer’s tax liability for that taxable year. Each amended return shall report all income from all sources, without regard to the abusive tax avoidance transaction.

(2) Except as provided in subdivision (b), pays in full all taxes and interest due.

(b) The Franchise Tax Board may enter into an installment payment agreement in lieu of the full payment required under paragraph (2) of subdivision (a). Any installment payment agreement authorized by this subdivision shall include interest on the unpaid amount at the rate prescribed in Section 19521. Failure by the taxpayer to fully comply with the terms of the installment payment agreement shall render the waiver of penalties null and void, and the total amount of tax, interest, and all penalties shall be immediately due and payable.

(c) After April 15, 2004, the Franchise Tax Board may issue a deficiency assessment upon an amended return filed pursuant to subdivision (a), impose penalties, or initiate criminal action under this part with respect to the difference between the amount shown on that return and the correct amount of tax. This action shall not invalidate any waivers granted under Section 19752.

(d) In addition to any other authority to examine returns, for the purpose of improving state tax administration, the Franchise Tax Board may inquire into the facts and circumstances related to the use of abusive tax avoidance transactions to underreport the tax liabilities for which a taxpayer has participated in the voluntary compliance initiative under this article. Taxpayers shall cooperate fully with inquiries described in this subdivision. Failure by a taxpayer to fully cooperate in an inquiry described in this subdivision shall render the waiver of penalties under this article null and void and the taxpayer may be assessed any penalties that may apply.

history: (History: Amended (as added by Stats. 2003, Ch. 656) by Stats. 2011, Ch. 14, Sec. 17. (SB 86) Effective March 24, 2011.)

article: 1. Voluntary Compliance Initiative One


text:
(a) (1) Notwithstanding Section 19057, and except as provided in paragraph (2), with respect to proposed deficiency assessments related to an abusive tax avoidance transaction, a notice of a proposed deficiency assessment may be mailed to the taxpayer within eight years after the return was filed, or within the period otherwise provided in Article 3 (commencing with Section 19031) of Chapter 4 of this part, whichever expires later.

(2) For notices mailed on or after August 1, 2011, with respect to proposed deficiency assessments related to an abusive tax avoidance transaction, a notice of a proposed deficiency assessment may be mailed to the taxpayer within 12 years after the return was filed, or within the period otherwise provided in Article 3 (commencing with Section 19031) of Chapter 4 of this part, whichever expires later.

(b) This section shall apply to any return filed under this part on or after January 1, 2000. Paragraph (2) of subdivision (a) shall apply to taxable years that have not been closed by a statute of limitations, res judicata, or otherwise, as of August 1, 2011.

history: (History: Amended (as added by Stats. 2003, Ch. 656) by Stats. 2011, Ch. 14, Sec. 20. (SB 86) Effective March 24, 2011.)

path: 2. OTHER TAXES > 10.2. ADMINISTRATION OF FRANCHISE AND INCOME TAX LAWS > 9.5. Tax Shelters > 2. Statute of Limitations for Abusive Tax Avoidance Transactions


text:
(a) The Franchise Tax Board shall develop and administer a voluntary compliance initiative for taxpayers subject to Part 10 (commencing with Section 17001) and Part 11 (commencing with Section 23001), as provided in this article.

(b) The voluntary compliance initiative shall be conducted during the period from August 1, 2011, to October 31, 2011, inclusive, pursuant to Section 19764. This initiative shall apply to tax liabilities attributable to the use of abusive tax avoidance transactions and to unreported income from the use of offshore financial arrangements for taxable years beginning before January 1, 2011.

(c) The Franchise Tax Board shall issue forms and instructions and may take any other actions necessary, including the use of closing agreements, to implement this article.

(d) The Franchise Tax Board shall publicize the voluntary compliance initiative so as to maximize public awareness of and participation in the initiative. The Franchise Tax Board shall coordinate to the highest degree possible its publicity efforts and other actions taken in implementing this article.

(e) Any correspondence mailed by the Franchise Tax Board to a taxpayer at the taxpayer’s last known address outlining the voluntary compliance initiative under this article constitutes “contact” within the meaning of Treasury Regulation Section 1.6664-2(c)(3), relating to qualified amended returns, and Sections 19164.5 and 19777.

history: (History: Added by Stats. 2011, Ch. 14, Sec. 21. (SB 86) Effective March 24, 2011.)

article: 3. Voluntary Compliance Initiative Two

path: 2. OTHER TAXES > 10.2. ADMINISTRATION OF FRANCHISE AND INCOME TAX LAWS > 9.5. Tax Shelters > 3. Voluntary Compliance Initiative Two


text:
(a) Any taxpayer who meets the requirements of Section 19764 may elect to participate in the voluntary compliance initiative under this article.

(b) For taxpayers electing to participate in the voluntary compliance initiative under this article, all of the following shall apply:

(1) (A) Except as provided in subparagraph (B), the Franchise Tax Board shall waive or abate all penalties imposed by this part, for all taxable years where the taxpayer elects to participate in the initiative, as a result of the unreported tax liabilities attributable to the use of abusive tax avoidance transactions and to unreported income from the use of offshore financial arrangements.

(B) The penalties imposed under Section 19138 or 19777.5 may not be waived.

(2) Except as provided in Section 19763, no criminal action shall be brought against the taxpayer for the taxable years with respect to issues for which the taxpayer voluntarily complies under this article.

(3) No penalty assessed after July 31, 2011, may be waived or abated under this article if the penalty imposed is attributable to an assessment of taxes that became final prior to July 31, 2011. For purposes of this paragraph, assessment of taxes does not include taxes self-assessed on an original or amended return filed before August 1, 2011.

(4) Notwithstanding Chapter 6 (commencing with Section 19301) of this part, no refund or credit shall be allowed for amounts paid in connection with abusive tax avoidance transactions or unreported income from the use of offshore financial arrangements under this article.

article: 3. Voluntary Compliance Initiative Two


text:
(a) This article does not apply to violations of this part for which, as of July 31, 2011, any of the following applies:

(1) A criminal complaint was filed against the taxpayer in connection with an abusive tax avoidance transaction, transactions, or unreported income from the use of an offshore financial arrangement or arrangements.

(2) The taxpayer is the subject of a criminal investigation in connection with an abusive tax avoidance transaction, transactions, or unreported income from the use of an offshore financial arrangement or arrangements.

(b) No refund or credit shall be allowed with respect to any penalty paid prior to the time the taxpayer participates in the voluntary compliance initiative authorized by this article.

(c) For purposes of this article, an “abusive tax avoidance transaction” has the same meaning as in Section 19777, as amended by the act adding this section.

article: 3. Voluntary Compliance Initiative Two


text:
(a) The voluntary compliance initiative described in this article applies to any taxpayer who, during the period from August 1, 2011, to October 31, 2011, makes an election as described in Section 19762 and does both of the following:

(1) (A) Files an amended tax return under this part for each taxable year for which the taxpayer has previously filed a tax return using an abusive tax avoidance transaction or an offshore financial arrangement to underreport the taxpayer’s tax liability for that taxable year or failed to include income from the offshore financial arrangement. Each amended return shall report all income from all sources, without regard to the abusive tax avoidance transaction, including all income from offshore financial arrangements. No deduction shall be allowed for transaction costs associated with an abusive tax avoidance transaction or for transaction or other costs associated with unreported income from the use of an offshore financial arrangement.

(B) For purposes of this article, an “offshore financial arrangement” means any transaction involving financial arrangements that in any manner rely on the use of offshore payment cards, including credit, debit, or charge cards, issued by banks in foreign jurisdictions or offshore financial arrangements, including arrangements with foreign banks, financial institutions, corporations, partnerships, trusts, or other entities to avoid or evade income or franchise tax.

(2) Except as provided in subdivision (b), pays in full all taxes and interest due.

(b) The Franchise Tax Board may enter into an installment payment agreement in lieu of the full payment required by paragraph (2) of subdivision (a), but only if final payment under the terms of that installment payment agreement is due and paid no later than June 15, 2012. Any installment payment agreement authorized by this subdivision shall include interest on the unpaid amount at the rate prescribed in Section 19521. Failure by the taxpayer to fully comply with the terms of the installment payment agreement shall render the waiver of penalties null and void, and the total amount of tax, interest, and all penalties shall be immediately due and payable.

(c) After October 31, 2011, the Franchise Tax Board may issue a deficiency assessment upon an amended return filed pursuant to subdivision (a), impose penalties, or initiate criminal action under this part with respect to the difference between the amount shown on that return and the correct amount of tax. This action shall not invalidate any waivers granted under Section 19762.

(d) In addition to any other authority to examine returns, for the purpose of improving state tax administration, the Franchise Tax Board may inquire into the facts and circumstances related to the use of abusive tax avoidance transactions or offshore financial arrangements to underreport the tax liabilities for which a taxpayer has participated in the voluntary compliance initiative under this article. Taxpayers shall cooperate fully with inquiries described in this subdivision. Failure by a taxpayer to fully cooperate in an inquiry described in this subdivision shall render the waiver of penalties under this article null and void and the taxpayer may be assessed any penalties that may apply.

article: 3. Voluntary Compliance Initiative Two


text:
(a) Section 6707A of the Internal Revenue Code, relating to penalty for failure to include reportable transaction information with a return, shall apply, except as otherwise provided.

(b) (1) Section 6707A(b)(1) of the Internal Revenue Code, relating to amount of penalty, is modified by substituting the phrase “or which would have resulted from such transaction if such transaction were respected for state tax purposes” for the phrase “or which would have resulted from such transaction if such transaction were respected for Federal tax purposes.”

(2) The penalty amounts in Section 6707A(b)(2)(A) of the Internal Revenue Code are modified by substituting “$30,000 ($15,000” for “$200,000 ($100,000.”

(3) The penalty amounts in Section 6707A(b)(2)(B) of the Internal Revenue Code are modified by substituting “$15,000 ($5,000” for “$50,000 ($10,000.”

(4) The penalty amounts in Section 6707A(b)(3) of the Internal Revenue Code, relating to minimum penalty, are modified by substituting “$2,500 ($1,250” for “$10,000 ($5,000.”

(c) (1) Section 6707A(c)(1) of the Internal Revenue Code, relating to reportable transaction, is modified to include reportable transactions within the meaning of paragraph (3) of subdivision (a) of Section 18407.

(2) Section 6707A(c)(2) of the Internal Revenue Code, relating to listed transaction, is modified to include listed transactions within the meaning of paragraph (4) of subdivision (a) of Section 18407.

(d) The penalty under this section only applies to taxpayers with taxable income greater than two hundred thousand dollars ($200,000).

(e) Section 6707A(e) of the Internal Revenue Code, relating to a penalty reported to the Securities and Exchange Commission, does not apply.

(f) Section 6707A(d) of the Internal Revenue Code, relating to authority to rescind penalty, does not apply, and in lieu thereof, the following apply:

(1) The Chief Counsel of the Franchise Tax Board may rescind all or any portion of any penalty imposed by this section with respect to any violation if all of the following apply:

(A) The violation is with respect to a reportable transaction other than a listed transaction.

(B) The person on whom the penalty is imposed has a history of complying with the requirements of this part and Part 10 (commencing with Section 17001) or Part 11 (commencing with Section 23001).

(C) It is shown that the violation is due to an unintentional mistake of fact.

(D) Imposing the penalty would be against equity and good conscience.

(E) Rescinding the penalty would promote compliance with the requirements of this part and Part 10 (commencing with Section 17001) or Part 11 (commencing with Section 23001) and effective tax administration.

(2) The exercise of authority under paragraph (1) shall be at the sole discretion of the Chief Counsel of the Franchise Tax Board and may not be delegated.

(3) Notwithstanding any other law or rule of law, any determination under this subdivision may not be reviewed in any administrative or judicial proceeding.

(g) Article 3 (commencing with Section 19031) of Chapter 4, relating to deficiency assessments, does not apply with respect to the assessment or collection of any penalty imposed under this section.

(h) The penalty imposed by this section is in addition to any penalty imposed under Part 10 (commencing with Section 17001), Part 11 (commencing with Section 23001), or this part.

(i) The amendments made to this section by Section 25 of Chapter 359 of the Statutes of 2015 apply to penalties assessed on or after January 1, 2016.

history: (History: Amended by Stats. 2016, Ch. 86, Sec. 288. (SB 1171) Effective January 1, 2017.)

article: 4. Penalties and Interest

path: 2. OTHER TAXES > 10.2. ADMINISTRATION OF FRANCHISE AND INCOME TAX LAWS > 9.5. Tax Shelters > 4. Penalties and Interest


text:
(a) If a taxpayer has a noneconomic substance transaction understatement for any taxable year, there shall be added to the tax an amount equal to 40 percent of the amount of that understatement.

(b) (1) Subdivision (a) shall be applied by substituting “20 percent” for “40 percent” with respect to the portion of any noneconomic substance transaction understatement with respect to which the relevant facts affecting the tax treatment of the item are adequately disclosed in the return or a statement attached to the return.

(2) For taxable years beginning before January 1, 2003, “adequately disclosed” includes the disclosure of the tax shelter identification number on the taxpayer’s return as required by subdivision (c) of Section 18628, as applicable for the year in which the transaction was entered into.

(c) For purposes of this section:

(1) The term “noneconomic substance transaction understatement” means any amount which would be an understatement under Section 6662A(b) of the Internal Revenue Code, as modified by subdivision (b) of Section 19164.5 if Section 6662A(b) of the Internal Revenue Code were applied by taking into account items attributable to noneconomic substance transactions rather than items to which Section 6662A(b) applies.

(2) A “noneconomic substance transaction” includes:

(A) The disallowance of any loss, deduction or credit, or addition to income attributable to a determination that the disallowance or addition is attributable to a transaction or arrangement that lacks economic substance including a transaction or arrangement in which an entity is disregarded as lacking economic substance. A transaction shall be treated as lacking economic substance if the taxpayer does not have a valid nontax California business purpose for entering into the transaction.

(B) Any disallowance of claimed tax benefits by reason of a transaction lacking economic substance, within the meaning of Section 7701(o) of the Internal Revenue Code, relating to clarification of economic substance doctrine, as added by Section 1409(a) of the Health Care and Education Reconciliation Act of 2010 (Public Law 111-152), except as otherwise provided.

(i) For purposes of this subparagraph, the phrase “apart from state income tax effects” shall be substituted for the phrase “apart from Federal income tax effects” in each place it appears in Section 7701(o)(1) of the Internal Revenue Code.

(ii) For purposes of this subparagraph, the phrase “any federal or local income tax effect which is related to a state income tax effect shall be treated in the same manner as a state income tax effect” is substituted for the phrase “any State or local income tax effect which is related to a Federal income tax effect shall be treated in the same manner as a Federal income tax effect” in Section 7701(o)(3) of the Internal Revenue Code.

(d) (1) If the notice of proposed assessment of additional tax has been sent with respect to a penalty to which this section applies, only the Chief Counsel of the Franchise Tax Board may compromise all or any portion of that penalty.

(2) The exercise of authority under paragraph (1) shall be at the sole discretion of the Chief Counsel of the Franchise Tax Board and may not be delegated.

(3) Notwithstanding any other law or rule of law, any determination under this subdivision may not be reviewed in any administrative or judicial proceeding.

(e) Notwithstanding anything to the contrary in this section, if a penalty has been assessed for federal income tax purposes pursuant to Section 6662(b)(6) of the Internal Revenue Code, as added by Section 1409(b) of the Health Care and Education Reconciliation Act of 2010 (Public Law 111-152), on an underpayment attributable to the disallowance of claimed tax benefits by reason of a transaction lacking economic substance, then a penalty shall be imposed under this section for that portion of an understatement attributable to that transaction, and shall not be abated unless the taxpayer can establish that the imposition of the federal penalty under Section 6662 of the Internal Revenue Code for an underpayment attributable to that transaction was clearly erroneous.

(f) The amendments made to this section by the act adding this subdivision shall apply to notices mailed on or after the effective date of the act adding this subdivision.

history: (History: Amended by Stats. 2011, Ch. 14, Sec. 23. (SB 86) Effective March 24, 2011.)

article: 4. Penalties and Interest


text:
(a) If a taxpayer has been contacted by the Franchise Tax Board regarding an abusive tax avoidance transaction, and has a deficiency attributable to an abusive tax avoidance transaction, there shall be added to the tax an amount equal to 100 percent of the interest payable under Section 19101 for the period beginning on the last date prescribed by law for the payment of that tax, determined without regard to extensions, and ending on the date the notice of proposed assessment is mailed.

(b) For purposes of this section, “abusive tax avoidance transaction” means any of the following:

(1) A tax shelter as defined in Section 6662(d)(2)(C) of the Internal Revenue Code, relating to reduction not to apply to tax shelters. For purposes of this chapter, Section 6662(d)(2)(C) of the Internal Revenue Code is modified by substituting the phrase “income or franchise tax” for “Federal income tax.”

(2) A reportable transaction, as defined in Section 6707A(c)(1) of the Internal Revenue Code, relating to reportable transaction, with respect to which the requirements of Section 6664(d)(3)(A) of the Internal Revenue Code are not met.

(3) A listed transaction, as defined in Section 6707A(c)(2) of the Internal Revenue Code, relating to listed transaction.

(4) A gross misstatement, within the meaning of Section 6404(g)(2)(D) of the Internal Revenue Code.

(5) Any transaction to which Section 19774 applies.

(c) The penalty imposed by this section is in addition to any other penalty imposed under Part 10 (commencing with Section 17001), Part 11 (commencing with Section 23001), or this part.

(d) (1) If a taxpayer files an amended return reporting an abusive tax avoidance transaction, described in subdivision (b), after the taxpayer is contacted by the Franchise Tax Board regarding that abusive tax avoidance transaction but before a notice of proposed assessment is issued under Section 19033, then the amount of the penalty under this section shall be 50 percent of the interest payable under Section 19101 with respect to the amount of any additional tax reflected in the amended return attributable to that abusive tax avoidance transaction.

(2) If a notice of proposed assessment under Section 19033, with respect to an abusive tax avoidance transaction as described in subdivision (a), is issued after the amended return described in paragraph (1) is filed, the penalty imposed pursuant to subdivision (a) shall be applicable to the additional tax reflected in the notice of proposed assessment attributable to that abusive tax avoidance transaction in excess of the additional tax shown on the amended return.

(e) The amendments made to this section by Chapter 14 of the Statutes of 2011 shall apply to notices mailed on or after the effective date of that act and to amended returns filed more than 90 days after that effective date with respect to taxable years for which the statute of limitations for mailing a notice of proposed assessment has not expired as of that date.

history: (History: Amended by Stats. 2022, Ch. 28, Sec. 148. (SB 1380) Effective January 1, 2023.)

article: 4. Penalties and Interest


text:
(a) There shall be added to the tax for each taxable year for which amnesty could have been requested:

(1) For amounts that are due and payable on the last day of the amnesty period, an amount equal to 50 percent of the accrued interest payable under Section 19101 for the period beginning on the last date prescribed by law for the payment of that tax (determined without regard to extensions) and ending on the last day of the amnesty period specified in Section 19731.

(2) For amounts that become due and payable after the last date of the amnesty period, an amount equal to 50 percent of the interest computed under Section 19101 on any final amount, including final deficiencies and self-assessed amounts, for the period beginning on the last date prescribed by law for the payment of the tax for the year of the deficiency (determined without regard to extensions) and ending on the last day of the amnesty period specified in Section 19731.

(3) For purposes of paragraph (2), Sections 19107, 19108, 19110, and 19113 shall apply in determining the amount computed under Section 19101.

(b) The penalty imposed by this section is in addition to any other penalty imposed under Part 10 (commencing with Section 17001), Part 11 (commencing with Section 23001), or this part.

(c) This section does not apply to any amounts that are treated as paid during the amnesty program period under paragraph (4) of subdivision (a) of Section 19733 or paragraph (1) of subdivision (b) of Section 19733.

(d) Article 3 (commencing with Section 19031), (relating to deficiency assessments) shall not apply with respect to the assessment or collection of any penalty imposed by subdivision (a).

(e) (1) Notwithstanding Chapter 6 (commencing with Section 19301), a taxpayer may not file a claim for refund or credit for any amounts paid in connection with the penalty imposed in subdivision (a), except as provided in paragraph (2).

(2) A taxpayer may file a claim for refund for any amounts paid to satisfy a penalty imposed under subdivision (a) on the grounds that the amount of the penalty was not properly computed by the Franchise Tax Board.

(f) Notwithstanding Section 18415, the amendments made to this section by the act adding this subdivision shall apply to penalties imposed under paragraph (2) of subdivision (a) after March 31, 2005.

history: (History: Amended by Stats. 2005, Ch. 398, Sec. 8. Effective September 29, 2005.)

article: 4. Penalties and Interest


text: For any amended return filed after April 15, 2004, and before the taxpayer is contacted by the Internal Revenue Service or the Franchise Tax Board regarding a potentially abusive tax shelter, then, for taxable years beginning after December 31, 1998, with respect to any understatement of tax related to using reportable transactions as defined in Section 18407, as added by the act adding this section, the taxpayer is subject to interest as provided under Section 19101 but at a rate of 150 percent of the adjusted annual rate established under Section 19521.

history: (History: Added by Stats. 2003, Ch. 656, Sec. 13. Effective January 1, 2004.)

article: 4. Penalties and Interest


text: In the determination of any issue of law or fact under Part 10 (commencing with Section 17001), Part 11 (commencing with Section 23001), or this part, neither the Franchise Tax Board nor any officer or agency having any administrative duties under this part nor any court is bound by the determination of any other officer or administrative agency of the state.

history: (History: Added by Stats. 1993, Ch. 31, Sec. 26. Effective June 16, 1993. Operative January 1, 1994, by Sec. 83 of Ch. 31.)

chapter: 10. Res Judicata

path: 2. OTHER TAXES > 10.2. ADMINISTRATION OF FRANCHISE AND INCOME TAX LAWS > 10. Res Judicata


text:
(a) In the determination of any case arising under this part, the rule of res judicata is applicable only if the liability involved is for the same year as was involved in another case previously determined.

(b) Notwithstanding the holding in Pope Estate Company v. Johnson, 43 Cal. App. 2d 170, in any action filed pursuant to Section 19382 (relating to taxpayer suits for refund), in addition to the defenses or relief sought in the action, the Franchise Tax Board shall assert in defense only those unpaid liabilities of the taxpayer for the same year which are evidenced by any of the following:

(1) A final proposed assessment.

(2) A notice of tax due.

(3) A final notice of action.

In addition, any refund claim of a taxpayer for the same year resulting from a federal audit adjustment made subsequent to the filing of the action need not be asserted by the taxpayer in that action.


text: This act shall be known and may be cited as the Earned Income Tax Credit Information Act.

history: (History: Added by Stats. 2007, Ch. 606, Sec. 1. Effective January 1, 2008.)

path: 2. OTHER TAXES > 10.3. EARNED INCOME TAX CREDIT INFORMATION ACT


text:
The Legislature finds and declares as follows:

(a) Congress created the federal earned income tax credit (EITC) in 1975 to offset the adverse effects of the Medicare and social security payroll taxes on working poor families and to encourage low-income workers to seek employment rather than welfare.

(b) Due to a relatively low percentage of federal earned income tax credit eligible persons who participate in the federal Earned Income Tax Credit program, hundreds of millions of federal dollars go unclaimed by the working poor in California.

(c) In 2015, the State of California authorized a California EITC to amplify the poverty-reducing effects of the federal EITC for the poorest working Californians.

(d) In order to alleviate the tax burden on working poor persons and families, to enhance the wages and income of working poor persons and families, to ensure that California taxpayers receive their share of the federal money available in the federal EITC program and other state and federal antipoverty tax credits, to ensure that the poorest working Californians access the additional California EITC, and to inject additional federal money into the California economy, the state shall facilitate the furnishing of information, as permitted by Section 19551.3, to working poor persons and families regarding the availability of the federal and California EITC so that they may claim those credits on their federal and state income tax returns.

(e) It is the intent of this act to offer the most cost-effective assistance to eligible taxpayers by taking steps to ensure that eligible Californians claim both the federal and California EITC and other state and federal antipoverty tax credits and are aware of free tax preparation services through the following:

(1) Notices provided by their employers.

(2) Notices provided by state departments and agencies that serve those who may qualify for the EITC.

history: (History: Amended by Stats. 2023, Ch. 55, Sec. 8. (SB 131) Effective July 10, 2023.)

part: 10.3. EARNED INCOME TAX CREDIT INFORMATION ACT