text:
(a) The Franchise Tax Board may, in cases of financial hardship, enter into installment payment agreements with any taxpayer under which that taxpayer is allowed to make payment of any liability imposed or collected under Part 10 (commencing with Section 17001), Part 11 (commencing with Section 23001), or this part, including any additions to tax, interest, penalties, fees, and any other amounts relating to the imposed liability, in installment payments, pursuant to the agreement, if the Franchise Tax Board determines that the agreement will facilitate full or partial collection of the liability.

(b) In the case of a liability of an individual under Part 10 (commencing with Section 17001) or this part, the Franchise Tax Board shall enter into an agreement to accept the full payment of the liability in installments if, as of the date the individual offers to enter into the agreement, all of the following apply:

(1) The aggregate amount of the liability (determined without regard to interest, penalties, additions to the tax, and additional amounts) does not exceed twenty-five thousand dollars ($25,000).

(2) The taxpayer (and, if the liability relates to a joint return, the taxpayer’s spouse) has not during any of the preceding five taxable years done any of the following:

(A) Failed to file any return of liability imposed under Part 10 (commencing with Section 17001) or this part.

(B) Failed to satisfy any term of an installment agreement under this section for payment of any liability imposed by Part 10 (commencing with Section 17001) or this part.

(3) The Franchise Tax Board determines that the taxpayer is financially unable to pay the liability in full when due, and the taxpayer submits any information as the Franchise Tax Board may require to make this determination.

(4) The agreement requires full payment of the liability within five years.

(5) The taxpayer agrees to comply with the provisions of this part and Part 10 (commencing with Section 17001) for the period the agreement is in effect.

(c) (1) (A) Failure by a taxpayer to comply fully with the terms of the installment payment agreement shall render the agreement null and void, unless the Franchise Tax Board determines that the failure was due to a reasonable cause, and the total amount of tax, interest, and all penalties shall be immediately due and payable. Except in any case where the Franchise Tax Board finds collection of the tax to which an installment payment agreement relates to be in jeopardy, or there is a mutual consent to terminate, alter, or modify the agreement, the agreement shall not be considered null and void, or otherwise terminated, unless both of the following occur:

(i) A notice of termination is provided to the taxpayer not later than 30 days before the date of termination.

(ii) The notice includes an explanation of why the Franchise Tax Board intends to terminate the agreement.

(B) This paragraph shall apply only to agreements entered into before January 1, 2024.

(2) (A) (i) The Franchise Tax Board may alter, modify, or terminate an agreement entered into under this section if any of the following apply:

(I) Information that the taxpayer provided to the Franchise Tax Board before the date the agreement was entered into was inaccurate or incomplete.

(II) The Franchise Tax Board determines that the collection of any liability to which an agreement under this section relates is in jeopardy.

(III) The Franchise Tax Board determines that the financial condition of a taxpayer with whom the Franchise Tax Board has entered into an agreement has significantly changed.

(IV) The taxpayer fails to make an installment payment at the time the installment payment is due under the agreement.

(V) The taxpayer fails to file a required tax return under this part or pay any other liability at the time that the liability is due.

(VI) The taxpayer fails to provide a financial condition update upon the Franchise Tax Board’s request.

(ii) The Franchise Tax Board may modify or alter an agreement under this section to add a liability that the taxpayer fails to pay at the time that the liability is due.

(iii) If a taxpayer is currently in an installment agreement under subdivision (a) or (b), the Franchise Tax Board may require financial hardship to alter or modify the installment agreement.

(iv) (I) Except as provided in subclause (II), the Franchise Tax Board shall not alter, modify, or terminate any agreement under this paragraph unless both of the following occur:

(ia) A notice of the alteration, modification, or termination is provided to the taxpayer not later than 30 days before the date of that action.

(ib) The notice includes an explanation of the rationale of the Franchise Tax Board for altering, modifying, or terminating the agreement.

(II) In any case where the Franchise Tax Board finds collection of the liability to which an installment payment agreement relates to be in jeopardy, the Franchise Tax Board may terminate the installment agreement and issue demand for immediate payment of the liability or the deficiency declared to be in jeopardy.

(B) This paragraph shall apply only to agreements entered into on or after January 1, 2024.

(d) No levy may be issued on the property or rights to property of any person with respect to any unpaid liability:

(1) During the period that an offer by the taxpayer for an installment agreement under this section for payment of the unpaid liability is pending with the Franchise Tax Board.

(2) If the offer is rejected by the Franchise Tax Board, during the 30 days thereafter and, if a request for review of the rejection is filed within the 30 days, during the period that the review is pending.

(3) During the period that the installment agreement for payment of the unpaid liability is in effect.

(4) If the agreement is terminated by the Franchise Tax Board, during the 30 days thereafter (and, if a request for review of the termination is filed within the 30 days, during the period that the review is pending).

(5) This subdivision shall not apply with respect to any of the following:

(A) Any unpaid liability if either of the following occurs:

(i) The taxpayer files a written notice with the Franchise Tax Board that waives the restriction imposed by this subdivision on levy with respect to the liability.

(ii) The Franchise Tax Board finds that the collection of that liability is in jeopardy.

(B) Any levy that was first issued before the date that the applicable proceeding under this subdivision commenced.

(C) At the discretion of the Franchise Tax Board, any unpaid liability for which the taxpayer makes an offer of an installment agreement subsequent to a rejection of an offer of an installment agreement with respect to that unpaid liability (or to any review thereof).

(D) The period of limitation under Section 19371 shall be suspended for the period during which the Franchise Tax Board is prohibited under this subdivision from making a levy.

(e) The Taxpayers’ Rights Advocate shall establish procedures for an independent departmental administrative review for the rejection of the offer of an installment payment and for installment payment agreements that are rendered null and void, or otherwise terminated under this section, for taxpayers that request that review. This administrative review shall not be subject to Chapter 4.5 (commencing with Section 11400) of Part 1 of Division 3 of the Government Code. Unless review is requested by the taxpayer within 30 days of the date of rejection of the offer of an installment agreement or termination of the installment agreement, this administrative review shall not stay collection of the liability to which the installment payment agreement relates.

(f) The Franchise Tax Board shall review a representative sample of existing installment agreements entered into under this section at least once every two years to ensure taxpayers are in compliance with the terms of the agreement.

(g) (1) The Franchise Tax Board may prescribe regulations as necessary or appropriate to carry out the purposes of this section.

(2) The Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code) shall not apply to any standard, criterion, procedure, determination, rule, notice, guideline, or any other guidance established or issued by the Franchise Tax Board pursuant to this section.

history: (History: Amended by Stats. 2023, Ch. 209, Sec. 1. (AB 1765) Effective January 1, 2024. Note: Subd. (g) was added by Stats. 2005, Ch. 211.)

article: 1. Payment of Tax by All Persons


kind: section

code: RTC

text:
(a) Whenever any person or employer who is required to collect, account for, and pay over any tax—(1) At the time and in the manner prescribed by law or regulations (A) fails to collect, truthfully account for, or pay over the tax, or (B) fails to make deposits, payments, or returns of the tax, and(2) Is notified, by notice delivered in hand or by registered mail of the failure, then all the requirements of subdivision (b) shall be complied with. In the case of a corporation, partnership, limited liability company, or trust, notice to an officer, partner, manager, member, or trustee, shall, for purposes of this section, be deemed to be sufficient notice to the corporation, partnership, limited liability company, or trust and to all officers, partners, managers, members, trustees, and employees thereof.

(b) Any person or employer who is required to collect, account for, and pay over any tax imposed by Part 10 (commencing with Section 17001) or Part 11 (commencing with Section 23001), if notice has been delivered to that person or employer in accordance with subdivision (a), shall collect the taxes, which become collectible after delivery of the notice, shall (not later than the end of the second banking day after any amount of the taxes is collected) deposit that amount in a separate account in a bank located within the limits of this state, and shall keep the amount of those taxes in that account until payment over to the Franchise Tax Board. The account shall be designated as a special fund in trust for the Franchise Tax Board, payable to the Franchise Tax Board by that person or employer as trustee.

(c) Whenever the Franchise Tax Board is satisfied, with respect to any notification made under subdivision (a), that all requirements of law and regulations with respect to the taxes, will henceforth be complied with, it may cancel the notification. The cancellation shall take effect at the time as is specified in the notice of the cancellation.

history: (History: Amended by Stats. 1997, Ch. 605, Sec. 17. Effective January 1, 1998.)

division: 2. OTHER TAXES

chapter: 4. Payments and Assessments

article: 1. Payment of Tax by All Persons

path: 2. OTHER TAXES > 10.2. ADMINISTRATION OF FRANCHISE AND INCOME TAX LAWS > 4. Payments and Assessments > 1. Payment of Tax by All Persons


text: Unless otherwise provided, any provision of this part that relates to the assessment and collection of tax shall also apply to the assessment and collection of estimated tax.

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

part: 10.2. ADMINISTRATION OF FRANCHISE AND INCOME TAX LAWS

article: 1. Payment of Tax by All Persons


text:
(a) All payments required under this part, regardless of the taxable year to which the payments apply shall be remitted to the Franchise Tax Board by electronic funds transfer pursuant to Division 11 (commencing with Section 11101) of the Commercial Code, once any of the following conditions are met:

(1) With respect to any corporation, any installment payment of estimated tax made pursuant to Section 19025 or the payment made pursuant to Section 18604 with regard to an extension of time to file exceeds fifty thousand dollars ($50,000) in any taxable year beginning on or after January 1, 1991, or exceeds twenty thousand dollars ($20,000) in any taxable year beginning on or after January 1, 1995.

(2) With respect to any corporation, the total tax liability exceeds two hundred thousand dollars ($200,000) in any taxable year beginning on or after January 1, 1991, or exceeds eighty thousand dollars ($80,000) in any taxable year beginning on or after January 1, 1995. For purposes of this section, total tax liability shall be the total tax liability as shown on the original return, after any adjustment made pursuant to Section 19051.

(3) A taxpayer submits a request to the Franchise Tax Board and is granted permission to make electronic funds transfers.

(b) A taxpayer required to remit payments to the Franchise Tax Board by electronic funds transfer may elect to discontinue making payments where the threshold requirements set forth in paragraphs (1) and (2) of subdivision (a) were not met for the preceding taxable year. The election shall be made in a form and manner prescribed by the Franchise Tax Board.

(c) Any taxpayer required to remit payment by electronic funds transfer pursuant to this section who makes payment by other means shall pay a penalty of 10 percent of the amount paid, unless it is shown that the failure to make payment as required was for reasonable cause and was not the result of willful neglect.

(d) Any taxpayer required to remit payments by electronic funds transfer pursuant to this section may request a waiver of those requirements from the Franchise Tax Board. The Franchise Tax Board may grant a waiver only if it determines that the particular amounts paid in excess of the threshold amounts established in this section were not representative of the taxpayer’s tax liability. If a taxpayer is granted a waiver, subsequent remittances by electronic funds transfer shall be required only on those terms set forth in the waiver.

(e) The Franchise Tax Board shall accept remittances by electronic funds transfer pursuant to this section no later than January 1, 1993. Electronic funds transfer procedures, in addition to those described in subdivision (f), shall be as prescribed by the Franchise Tax Board. Payment is deemed complete on the date the electronic funds transfer is initiated, if settlement to the state’s demand account occurs on or before the banking day following the date the transfer is initiated. If settlement to the state’s demand account does not occur on or before the banking day following the date the transfer is initiated, payment is deemed to occur on the date settlement occurs.

(f) For purposes of this section:

(1) “Electronic funds transfer” means any transfer of funds, other than a transaction originated by check, draft, or similar paper instrument, that is initiated through an electronic terminal, telephonic instrument, or computer or magnetic tape, so as to order, instruct, or authorize a financial institution to debit or credit an account. Electronic funds transfer shall be accomplished by an automated clearinghouse debit, automated clearinghouse credit, a Federal Reserve Wire Transfer (Fedwire), or by an international funds transfer.

(2) “Automated clearinghouse” means any federal reserve bank, or an organization established by agreement with the National Automated Clearing House Association, that operates as a clearinghouse for transmitting or receiving entries between banks or bank accounts and that authorizes an electronic transfer of funds between those banks or bank accounts.

(3) “Automated clearinghouse debit” means a transaction in which any department of the state, through its designated depository bank, originates an automated clearinghouse transaction debiting the taxpayer’s bank account and crediting the state’s bank account for the amount of tax. Banking costs incurred for the automated clearinghouse debit transaction by the taxpayer shall be paid by the state.

(4) “Automated clearinghouse credit” means an automated clearinghouse transaction in which the taxpayer, through its own bank, originates an entry crediting the state’s bank account and debiting its own bank account. Banking costs incurred by the state for the automated clearinghouse credit transaction may be charged to the taxpayer.

(5) “Fedwire” means any transaction originated by the taxpayer and utilizing the national electronic payment system to transfer funds through federal reserve banks, pursuant to which the taxpayer debits its own bank account and credits the state’s bank account. Electronic funds transfers may be made by Fedwire only if prior approval is obtained from the Franchise Tax Board and the taxpayer is unable, for reasonable cause, to make payments pursuant to paragraph (3) or (4). Banking costs charged to the taxpayer and to the state may be charged to the taxpayer.

(6) “International funds transfer” means any transaction originated by the taxpayer and utilizing the international electronic payment system to transfer funds, pursuant to which the taxpayer debits its own bank account and credits the state’s bank account.

(7) In determining whether a payment or total tax liability exceeds the amounts established in subdivision (a), the income of all taxpayers whose income derived from, or attributable to, sources within this state is required to be determined by a combined report shall be aggregated and the total aggregate amount shall be considered to be the income of a single taxpayer for purposes of determining the payment or total tax liability of a single taxpayer.

history: (History: Amended by Stats. 2000, Ch. 862, Sec. 9. Effective January 1, 2001.)

article: 1. Payment of Tax by All Persons


text:
(a) All payments required by an individual under this part, regardless of the taxable year to which the payments apply, made on or after January 1, 2009, shall be electronically remitted to the Franchise Tax Board in the form and manner prescribed by the Franchise Tax Board, once any of the following conditions are met by an individual:

(1) Any installment payment of estimated tax made pursuant to this part in excess of twenty thousand dollars ($20,000), or any payment made pursuant to Section 18567 with regard to an extension of time to file that exceeds twenty thousand dollars ($20,000), for any taxable year beginning on or after January 1, 2009.

(2) The total tax liability exceeds eighty thousand dollars ($80,000) in any taxable year beginning on or after January 1, 2009. For purposes of this section, total tax liability shall be the total tax liability as shown on the original return, after any adjustment made pursuant to Section 19051.

(b) A taxpayer required to electronically remit payment to the Franchise Tax Board pursuant to this section may elect to discontinue making payments electronically where the threshold requirements set forth in paragraphs (1) and (2) of subdivision (a) were not met for the preceding taxable year. The election shall be made in a form and manner prescribed by the Franchise Tax Board.

(c) Any taxpayer required to electronically remit payment pursuant to this section who makes payment by other means shall pay a penalty of 1 percent of the amount paid, unless it is shown that the failure to make payment as required was for reasonable cause and was not the result of willful neglect.

(d) Any taxpayer required to electronically remit payments pursuant to this section may request a waiver of those requirements from the Franchise Tax Board. The Franchise Tax Board may grant a waiver only if it determines that the particular amounts paid in excess of the threshold amounts established in this section were not representative of the taxpayer’s tax liability. If the Franchise Tax Board grants a waiver to a taxpayer, the waiver shall be in writing, and subsequent electronic remittances shall be required only on those terms set forth in the written waiver.

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

(f) For purposes of this section, both of the following shall apply:

(1) “Electronically remit” means to send payment through use of any of the electronic payment applications provided by the Franchise Tax Board, including, but not limited to, a pay by phone option, when made available by the Franchise Tax Board.

(2) “Pay by phone” means a method that allows a taxpayer to authorize a transfer of funds from a financial institution using telephonic technology.

history: (History: Added by Stats. 2008, Ch. 751, Sec. 67. Effective September 30, 2008.)

article: 1. Payment of Tax by All Persons


text: In the case of taxpayers subject to the tax imposed by Article 3 (commencing with Section 23181) of Chapter 2 of Part 11, there shall be due and payable on or before the 15th day of the third month following the close of the preceding year from each taxpayer a percentage of its net income as disclosed by its return which is equal to the rate applicable to corporations subject to the tax imposed by Article 2 (commencing with Section 23151) of Chapter 2 of Part 11 plus the personal property tax rate equivalent included in the bank and financial corporation tax rate determination by the Franchise Tax Board pursuant to Sections 23186 and 23186.1. The payment required by this section shall not be less than the minimum tax specified in Section 23153.

history: (History: Amended by Stats. 1997, Ch. 605, Sec. 19. Effective January 1, 1998.)

article: 2. Banks and Corporations

path: 2. OTHER TAXES > 10.2. ADMINISTRATION OF FRANCHISE AND INCOME TAX LAWS > 4. Payments and Assessments > 2. Banks and Corporations


text: For purposes of this article, in the case of a corporation or an organization described in Section 23731, the term “estimated tax” means the amount which the corporation or organization described in Section 23731 estimates as the amount of the tax imposed by Part 11 (commencing with Section 23001) and the amount of its liability for the tax of each wholly owned subsidiary under Section 23800.5; but in no event shall the estimated tax of a corporation subject to the tax imposed by Article 2 (commencing with Section 23151) of Chapter 2 of Part 11 be less than the minimum tax prescribed in Section 23153.

history: (History: Amended by Stats. 2003, Ch. 185, Sec. 29. Effective January 1, 2004.)

article: 2. Banks and Corporations


text:
(a) If the amount of estimated tax does not exceed the minimum tax specified by Section 23153, the entire amount of the estimated tax shall be due and payable on or before the 15th day of the fourth month of the taxable year.

(b) Except as provided in subdivision (c), if the amount of estimated tax exceeds the minimum tax specified by Section 23153, the amount payable shall be paid in installments as follows:If the requirementsThe following percentages of the estimated tax shall be paid on the 15th day of the—of this subdivision are first met—4th month6th month9th month12th monthBefore the 1st day of the 4th month of the taxable year

30 (but not less than the minimum tax provided in Section 23153 and any tax under Section 23800.5)

40

0

30After the last day of the 3rd month and before the 1st day of the 6th month of the taxable year __60040After the last day of the 5th month and before the 1st day of the 9th month of the taxable year ____7030After the last day of the 8th month and before the 1st day of the 12th month of the taxable year ______100(c) If a wholly owned subsidiary is first subject to tax under Section 23800.5 after the last day of the third month of the taxable year of owner, the amount of the next installment of estimated tax under subdivision (b) after the wholly owned subsidiary is subject to tax under Section 23800.5 shall not be less than the amount of the tax of the wholly owned subsidiary under Section 23800.5 and an amount equal to that amount shall be due and payable on the date the installment is required to be paid. For purposes of determining which installment is the next installment of estimated tax under subdivision (b), subdivision (b) shall be modified by substituting “includes the tax of a wholly owned subsidiary under Section 23800.5” for “exceeds the minimum tax specified by Section 23153.”

(d) The amendments made to this section by Section 1 of Chapter 1 of the First Extraordinary Session of the Statutes of 2008 shall apply to installments due for each taxable year beginning on or after January 1, 2009, and before January 1, 2010.

(e) The amendments made to this section by the act adding this subdivision shall apply to installments due for each taxable year beginning on or after January 1, 2010.

history: (History: Amended by Stats. 2009, 4th Ex. Sess., Ch. 15, Sec. 2. (AB 17 4x) Effective October 23, 2009.)

article: 2. Banks and Corporations


text:
If, after paying any installment of estimated tax required by subdivision (b) of Section 19025, the taxpayer makes a new estimate, the amount of each remaining installment (if any) shall be the amount which would have been payable if the new estimate had been made when the first estimate for the taxable year was made, increased or decreased (as the case may be) by the amount computed by dividing—

(a) The difference between—

(1) The amount of estimated tax required to be paid before the date on which the new estimate is made, and

(2) The amount of estimated tax which would have been required to be paid before that date if the new estimate had been made when the first estimate was made, by

(b) The number of installments remaining to be paid on or after the date on which the new estimate is made.

history: (History: Amended by Stats. 2000, Ch. 862, Sec. 11. Effective January 1, 2001.)

article: 2. Banks and Corporations


text: The application of this article to taxable years of less than 12 months shall be in accordance with regulations prescribed by the Franchise Tax Board.

history: (History: Amended by Stats. 2000, Ch. 862, Sec. 12. Effective January 1, 2001.)

article: 2. Banks and Corporations


text: The Franchise Tax Board may proceed under this article or Article 5 (commencing with Section 19081) whether or not it requires a return as an amended return under Section 18622.

article: 3. Deficiency Assessments

path: 2. OTHER TAXES > 10.2. ADMINISTRATION OF FRANCHISE AND INCOME TAX LAWS > 4. Payments and Assessments > 3. Deficiency Assessments


text: As soon as practicable after the return is filed, the Franchise Tax Board shall examine it and shall determine the correct amount of the tax.

article: 3. Deficiency Assessments


text:
(a) If the Franchise Tax Board determines that the tax disclosed by the taxpayer on an original or amended return, including an amended return reporting federal adjustments pursuant to Section 18622, is less than the tax disclosed by its examination, it shall mail notice to the taxpayer of the deficiency proposed to be assessed. In no case shall the determination of the deficiency be arbitrary or without foundation.

(b) (1) Except as provided in paragraph (2), the Franchise Tax Board, in connection with the determination described in subdivision (a), shall examine the original or amended return or related electronically stored return data.

(2) If the return or return data described in paragraph (1) has been destroyed or cannot be located after reasonable effort, the Franchise Tax Board shall request the taxpayer to provide a paper or electronic copy of the return. If the taxpayer fails to provide a copy within 30 days, which may be extended an additional 30 days for reasonable cause, from the date of the request, paragraph (1) shall not apply.

(c) As used in this section, “electronically stored return data” means an electronic record of line items from an original or amended return and accompanying schedules that is routinely created as a return is processed.

(d) The amendments to this section made by Chapter 414 of the Statutes of 2000 shall apply to notices of deficiencies proposed to be assessed issued on or after January 1, 2001.

(e) The notice described in subdivision (a) shall be mailed in a manner that includes a postmark. For purposes of this subdivision, postmark means a postal marking made on a letter, package, or postcard indicating the date on which the item is delivered to the United States Postal Service.

(f) The amendments made to this section by the act adding this subdivision shall apply to notices of deficiencies proposed to be assessed issued on or after January 1, 2008.

history: (History: Amended by Stats. 2007, Ch. 281, Sec. 1. Effective January 1, 2008.)

article: 3. Deficiency Assessments


text:
(a) Each notice shall set forth the reasons for the proposed deficiency assessment and the computation thereof.

(b) Each notice shall include the date determined by the Franchise Tax Board as the last day on which the taxpayer may file a written protest pursuant to Section 19041. Failure to include this date shall not invalidate a notice that is otherwise valid.

(c) The amendments made by the act adding this subdivision shall apply to any notice mailed after December 31, 1999.

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

article: 3. Deficiency Assessments


text: In the case of a joint return filed by spouses, the notice of proposed deficiency assessment may be a single joint notice, except that if the Franchise Tax Board is notified by either spouse that separate residences have been established, it shall mail to each spouse, in lieu of the single joint notice, duplicate originals of the joint notice.

history: (History: Amended by Stats. 2016, Ch. 50, Sec. 108. (SB 1005) Effective January 1, 2017.)

article: 3. Deficiency Assessments


text: Notwithstanding any provision to the contrary, any interest, penalty or addition to tax, imposed under Part 10 (commencing with Section 17001), Part 11 (commencing with Section 23001), or this part may be assessed and collected in the same manner as if it were a deficiency.

article: 3. Deficiency Assessments


text:
(a) Within 60 days after the mailing of each notice of proposed deficiency assessment the taxpayer may file with the Franchise Tax Board a written protest against the proposed deficiency assessment, specifying in the protest the grounds upon which it is based.

(b) Any protest filed with the Franchise Tax Board on or before the last date specified for filing that protest by the Franchise Tax Board in the notice of proposed deficiency assessment (according to Section 19034) shall be treated as timely filed.

(c) The amendments made by the act adding this subdivision shall apply to any notice mailed after December 31, 1999.

history: (History: Amended by Stats. 1999, Ch. 931, Sec. 11. Effective October 10, 1999.)

article: 3. Deficiency Assessments


text:
(a) Notwithstanding any other provision of this part, Part 10 (commencing with Section 17001), or Part 11 (commencing with Section 23001), the provisions of Section 6603 of the Internal Revenue Code, relating to deposits made to suspend the running of interest on potential underpayments, shall apply, except as otherwise provided. A deposit shall not be considered a payment of tax for purposes of filing a claim for refund pursuant to Section 19306, converting an administrative action to an action on a claim pursuant to Section 19335, or filing an action pursuant to Section 19384, until either of the following occurs:

(1) The taxpayer provides a written statement to the Franchise Tax Board specifying that the deposit shall be a payment of tax for purposes of Section 19306, 19335, or 19384.

(2) The deposit is used to pay a final tax liability.

(b) Section 6603(d) of the Internal Revenue Code is modified to substitute the phrase “notice of proposed deficiency assessment under Article 3 of Chapter 4 of this part” for “30-day letter” in each place that the phrase “30-day letter” appears.

(c) In the case of any amount held by the Franchise Tax Board as a deposit in the nature of a cash bond pursuant to the provisions of this section prior to the amendments made by the act adding this subdivision, the date that the taxpayer identifies that amount as a deposit made pursuant to this section, as amended by the act adding this subdivision, shall be treated as the date that the amount is deposited for purposes of this section, as amended by the act adding this subdivision.

history: (History: Amended by Stats. 2005, Ch. 691, Sec. 45. Effective October 7, 2005.)

article: 3. Deficiency Assessments


text: If no protest is filed, the amount of the proposed deficiency assessment becomes final upon the expiration of the 60-day period provided in Section 19041.

article: 3. Deficiency Assessments


text:
(a) For purposes of this part, “deficiency” means the amount by which the tax imposed by Part 10 (commencing with Section 17001) or Part 11 (commencing with Section 23001) exceeds the excess of—

(1) The sum of—

(A) The amount shown as the tax by the taxpayer on an original or amended return, if an original or amended return was filed, plus

(B) The amounts previously assessed (or collected without assessment) as a deficiency, over—

(2) The amount of rebates, as defined in paragraph (2) of subdivision (b), made.

(b) For purposes of this section:

(1) The tax imposed by Part 10 (commencing with Section 17001) and Part 11 (commencing with Section 23001) and the tax shown on an original or amended return shall both be determined without regard to payments on account of estimated tax, and without regard to the credit under Section 19002.

(2) “Rebate” means so much of an abatement, credit, refund, or other repayment, as was made on the ground that the tax imposed by Part 10 (commencing with Section 17001) or Part 11 (commencing with Section 23001) was less than the excess of the amount specified in paragraph (1) of subdivision (a) over the rebates previously made.

history: (History: Amended by Stats. 2001, Ch. 191, Sec. 2. Effective January 1, 2002.)

article: 3. Deficiency Assessments


text:
(a) (1) If the Franchise Tax Board determines that the amount of a carryover disclosed by the taxpayer on an original or amended return, including an amended return reporting federal adjustments pursuant to Section 18622, is more than the amount of the carryover disclosed by its own examination, it may mail a notice or notices to the taxpayer of the proposed carryover adjustment and the proposed adjusted carryover amount.

(2) For purposes of this section, “carryover” means the amount of a credit, loss, deduction, or other item that is shown on an original or amended return for carry forward to a subsequent taxable year.

(b) Except as otherwise provided in this section, the provisions of this article applicable to a proposed deficiency assessment shall be applicable to a proposed adjusted carryover amount, including protest and appeal rights as if that proposed adjusted carryover amount were a proposed deficiency assessment.

(c) (1) A proposed adjusted carryover amount shall become a final adjusted carryover amount under this section following a determination of the board regarding that proposed adjusted carryover amount that becomes final pursuant to the provisions of Section 19048.

(2) A final adjusted carryover amount shall be binding and conclusive with respect to the amount of that carryover for purposes of Part 10 (commencing with Section 17001), this part, and Part 11 (commencing with Section 23001), except in the following circumstances:

(A) In the event of fraud, malfeasance, or misrepresentation of a material fact.

(B) Subject to any provision of the Revenue and Taxation Code that expressly provides that effect be given to that provision notwithstanding any other law or rule of law.

(C) Subject to any law that is, or becomes, operative with respect to a taxable year affected by the final adjusted carryover amount.

(D) Subject to any final federal adjustment that is made with respect to the taxpayer’s federal income tax liability for a taxable year affected by the final adjusted carryover amount.

(E) In an action brought pursuant to provisions of Section 19382.

(d) (1) In any case where there is a final adjusted carryover amount with respect to a carryover, the taxpayer shall report that final adjusted carryover amount on an original or amended return for any subsequent year.

(2) If a taxpayer fails to comply with paragraph (1), then any adjustment required to make the amount of the carryover shown on the return for any year consistent with the final adjusted carryover amount shall be treated as arising out of a mathematical error and assessed and collected under Section 19051.

(e) Except as provided in subdivision (c), this section shall not affect the determination, issuance, assessment, collection, or validity of a deficiency assessment under this part.

history: (History: Added by Stats. 2001, Ch. 191, Sec. 3. Effective January 1, 2002.)

article: 3. Deficiency Assessments


text:
(a) If a protest is filed, the Franchise Tax Board shall reconsider the assessment of the deficiency and, if the taxpayer has so requested in his or her protest, shall grant the taxpayer or his or her authorized representatives an oral hearing. Chapter 4.5 (commencing with Section 11400) of Part 1 of Division 3 of Title 2 of the Government Code does not apply to a hearing under this subdivision.

(b) The Franchise Tax Board may act on the protest in whole or in part. In the event the Franchise Tax Board acts on the protest in part only, the remaining part of the protest shall continue to be under protest until the Franchise Tax Board acts on that part.

history: (History: Amended by Stats. 1995, Ch. 938, Sec. 87. Effective January 1, 1996. Operative July 1, 1997, by Sec. 98 of Ch. 938.)

article: 3. Deficiency Assessments


text:
(a) The Franchise Tax Board’s action upon the protest, whether in whole or in part, is final upon the expiration of 30 days from the date when it mails notice of its action to the taxpayer, unless within that 30-day period the taxpayer appeals in writing from the action of the Franchise Tax Board to the board.

(b) (1) The Franchise Tax Board’s notice of action upon protest shall include the date determined by the Franchise Tax Board as the last day on which the taxpayer may file an appeal with the board.

(2) Any appeal to the board filed by the taxpayer on or before the date for filing an appeal specified in the notice (pursuant to paragraph (1)) shall be treated as timely filed.

(c) This section shall apply to any notice mailed after December 31, 1999.

history: (History: Amended by Stats. 1999, Ch. 931, Sec. 12. Effective October 10, 1999.)

article: 3. Deficiency Assessments


text: Two copies of the appeal and two copies of any supporting documents shall be addressed and mailed to the State Board of Equalization at Sacramento, California. Upon receipt of the appeal, the board shall provide one copy of the appeal and one copy of any supporting documents to the Franchise Tax Board at Sacramento, California.

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

article: 3. Deficiency Assessments


text: The board shall hear and determine the appeal and thereafter shall forthwith notify the taxpayer and the Franchise Tax Board of its determination and the reasons therefor.

article: 3. Deficiency Assessments


text: The board’s determination becomes final upon the expiration of 30 days from the time of the determination unless within the 30-day period the taxpayer or the Franchise Tax Board files a petition for rehearing with the board. In that event the determination becomes final upon the expiration of 30 days from the time the board issues its opinion on the petition.

article: 3. Deficiency Assessments


text:
(a) When a deficiency is determined and the assessment becomes final, the Franchise Tax Board shall mail notice and demand to the taxpayer for the payment thereof. The deficiency assessed is due and payable at the expiration of 15 days from the date of the notice and demand.

(b) The amendments made by Chapter 600 of the Statutes of 1997 are operative for notices issued on or after January 1, 1998.

(c) The notice described in subdivision (a) shall be mailed in a manner that includes a postmark. For purposes of this subdivision, postmark means a postal marking made on a letter, package, or postcard indicating the date on which the item is delivered to the United States Postal Service.

(d) The amendments made to this section by the act adding this subdivision are operative for notices issued on or after January 1, 2008.

history: (History: Amended by Stats. 2007, Ch. 281, Sec. 2. Effective January 1, 2008.)

article: 3. Deficiency Assessments


text: A certificate by the Franchise Tax Board or of the board, as the case may be, of the mailing of the notices specified in this article is prima facie evidence of the assessment of the deficiency and of the giving of the notices.

article: 3. Deficiency Assessments


text: Any amount of tax in excess of that disclosed by the return, due to a mathematical error, notice of which has been mailed to the taxpayer, is not a deficiency assessment. The taxpayer has no right of protest or appeal based on that notice; however, the amount of tax erroneously omitted in the return may be assessed and collected in the manner provided in this part as in the case of deficiency assessments.

article: 3. Deficiency Assessments


text: Notwithstanding any other provision of this part to the contrary, adjustments to refundable credits (including credits claimed on or after January 1, 2001, in accordance with Section 17052.6) may be made pursuant to Section 19054, and claimants shall have the right to claim a refund of adjusted amounts within the period provided in Section 19306, 19307, 19308, or 19311, whichever period expires later.

history: (History: Amended by Stats. 2002, Ch. 374, Sec. 5. Effective January 1, 2003.)

article: 3. Deficiency Assessments


text:
(a) If on any return or claim for refund of taxes imposed under Part 10 (commencing with Section 17001) or Part 11 (commencing with Section 23001), there is an overstatement of the credit for income tax withheld, or of the amount paid as estimated income tax, the amount so overstated which is allowed against the tax shown on the return or which is allowed as a credit or refund may be assessed by the Franchise Tax Board in the same manner as is provided by Section 19051 in the case of a mathematical error appearing on the return.

(b) No unpaid amount of estimated tax under Section 19025 or 19136 shall be assessed.

article: 3. Deficiency Assessments


text:
(a) Except in the case of a false or fraudulent return and except as otherwise expressly provided in this part, every notice of a proposed deficiency assessment shall be mailed to the taxpayer within four years after the return was filed. No deficiency shall be assessed or collected with respect to the year for which the return was filed unless the notice is mailed within the four-year period or the period otherwise provided. For purposes of this chapter, the term “return” means the return required to be filed by the taxpayer and does not include a return of any person from whom the taxpayer has received an item of income, gain, loss, deduction, or credit.

(b) The running of the period of limitations provided in subdivision (a) on mailing a notice of proposed deficiency assessment shall, in a case under Title 11 of the United States Code, be suspended for any period during which the Franchise Tax Board is prohibited by reason of that case from mailing the notice of proposed deficiency assessment and for 60 days thereafter.

(c) Where, within the 60-day period ending on the day on which the time prescribed in this section for the assessment of any tax imposed under Part 10 (commencing with Section 17001) or Part 11 (commencing with Section 23001) for any taxable year would otherwise expire, the Franchise Tax Board receives a written document, other than an amended return or a report required by Section 18622, signed by the taxpayer showing that the taxpayer owes an additional amount of that tax for that taxable year, the period for the assessment of an additional amount in excess of the amount shown on either an original or amended return shall not expire before the day 60 days after the day on which the Franchise Tax Board receives that document.

(d) If a taxpayer determines in good faith that it is an exempt organization and files a return as an exempt organization under Section 23772, and if the taxpayer is thereafter held to be a taxable organization for the taxable year for which the return is filed, that return shall be deemed the return of the organization for the purposes of this section.

history: (History: Amended by Stats. 1999, Ch. 83, Sec. 175. Effective January 1, 2000.)

article: 3. Deficiency Assessments


text:
(a) If the taxpayer omits from gross income an amount properly includable therein which is in excess of 25 percent of the amount of gross income stated in the return, a notice of a proposed deficiency assessment may be mailed to the taxpayer within six years after the return was filed. Additionally, in the case of a corporation, a proceeding in court for the collection of the tax may be commenced without assessment at any time within six years after the return was filed.

(b) For purposes of this section, all of the following shall apply:

(1) In the case of a trade or business, the term “gross income” means the total of the amounts received or accrued from the sale of goods or services (if the amounts are required to be shown on the return) prior to diminution by the cost of the sales or service.

(2) An understatement of gross income by reason of an overstatement of unrecovered cost or other basis is an omission from gross income.

(3) In determining the amount omitted from gross income, other than in the case of an overstatement of unrecovered cost or other basis, there shall not be taken into account any amount which is omitted from gross income stated in the return if the amount is disclosed in the return, or in a statement attached to the return, in a manner adequate to apprise the Franchise Tax Board of the nature and amount of the item.

history: (History: Amended by Stats. 2025, Ch. 231, Sec. 67. (SB 711) Effective October 1, 2025.)

article: 3. Deficiency Assessments


text:
(a) If a taxpayer is required by subdivision (a) of Section 18622 to report a change or correction by the Commissioner of Internal Revenue or other officer of the United States or other competent authority and does report the change or correction within six months after the final federal determination, or the Internal Revenue Service reports that change or correction within six months after the final federal determination, a notice of proposed deficiency assessment resulting from those adjustments may be mailed to the taxpayer within two years from the date when the notice is filed with the Franchise Tax Board by the taxpayer or the Internal Revenue Service, or within the periods provided in Section 19057, 19058, or 19065, whichever period expires later.

(b) If a taxpayer is required by subdivision (b) of Section 18622 to file an amended return and does file the return within six months of filing an amended return with the Commissioner of Internal Revenue, a notice of proposed deficiency assessment in excess of the self-assessed tax on the amended return, and resulting from the adjustments may be mailed to the taxpayer within two years from the date when the amended return is filed with the Franchise Tax Board by the taxpayer, or within the periods provided in Section 19057, 19058, or 19065, whichever period expires later.

history: (History: Amended by Stats. 1999, Ch. 987, Sec. 71. Effective October 10, 1999. Applicable, by Sec. 105 of Ch. 987, to federal determinations that become final on or after January 1, 2000.)

article: 3. Deficiency Assessments


text:
(a) If a taxpayer fails to report a change or correction by the Commissioner of Internal Revenue or other officer of the United States or other competent authority or fails to file an amended return as required by Section 18622, a notice of proposed deficiency assessment resulting from the adjustment may be mailed to the taxpayer at any time.

(b) If, after the six-month period required in Section 18622, a taxpayer or the Internal Revenue Service reports a change or correction by the Commissioner of Internal Revenue or other officer of the United States or other competent authority or files an amended return as required by Section 18622, a notice of proposed deficiency assessment resulting from the adjustment may be mailed to the taxpayer within four years from the date the taxpayer or the Internal Revenue Service notifies the Franchise Tax Board of that change or correction or files that return.

history: (History: Amended by Stats. 1999, Ch. 987, Sec. 72. Effective October 10, 1999. Applicable, by Sec. 105 of Ch. 987, to federal determinations that become final on or after January 1, 2000.)

article: 3. Deficiency Assessments


text: In case of a deficiency described in Sections 24945 and 24946, and in Sections 1033(a)(2)(C) and 1033(a)(2)(D) of the Internal Revenue Code, the deficiency may be assessed at any time prior to the expiration of the time therein provided.

article: 3. Deficiency Assessments


text:
(a) In the case of any tax imposed by Part 10 (commencing with Section 17001) or Part 11 (commencing with Section 23001) with respect to any person, the period for assessing a deficiency attributable to any partnership item of a federally registered partnership shall not expire before the later of the following:

(1) The date which is five years after the date on which the partnership return of the federally registered partnership for the partnership taxable year in which the item arose was filed (or later, if the date prescribed for filing the return).

(2) If the name or address of the person does not appear on the partnership return, the date which is one year after the date on which the information is furnished to the Franchise Tax Board in the manner and at the place as it may prescribe.

(b) For purposes of this section, “partnership item” means both of the following:

(1) Any item required to be taken into account for the partnership taxable year under any provision of subchapter K of Chapter 1 of Title 26 of the Internal Revenue Code to the extent that regulations prescribed by the Franchise Tax Board provide that for purposes of this part that item is more appropriately determined at the partnership level than at the partner level.

(2) Any other item to the extent affected by an item described in paragraph (1).

(c) The extensions referred to in subsection (c)(4) of Section 6501 of the Internal Revenue Code, insofar as they relate to partnership items, may, with respect to any person, be consented by either of the following:

(1) Except to the extent the Franchise Tax Board is otherwise notified by the partnership, by a general partner of the partnership.

(2) By any person authorized to do so by the partnership in writing.

(d) For purposes of this section, “federally registered partnership” means, with respect to any partnership taxable year, any partnership for which either of the following apply:

(1) Interests have been offered for sale at any time during that taxable year or a prior taxable year in any offering required to be registered with the Securities and Exchange Commission.

(2) At any time during that taxable year or a prior taxable year, was subject to the annual reporting requirements of the Securities and Exchange Commission which relate to the protection of investors in the partnership.

article: 3. Deficiency Assessments


text:
(a) If any person initiates a motion to quash a subpoena, as provided by Sections 7465 to 7476, inclusive, of the Government Code, and that person is the person with respect to whose liability the subpoena is issued (or is the agent, nominee, or other person acting under the direction or control of that person), then the running of any period of limitations under Section 19057 (relating to deficiency assessments), Section 19087 (relating to false or fraudulent returns), or Section 19704 (relating to criminal prosecutions) with respect to that person shall be suspended for the period during which a proceeding, and appeals therein, with respect to the enforcement of the subpoena is pending.

(b) In the absence of the resolution of the subpoenaed person’s response to a subpoena issued under Section 19504 (power of examination), the running of any period of limitations under Section 19057 (relating to deficiency assessments), Section 19087 (relating to false or fraudulent returns), or Section 19704 (relating to criminal prosecutions) with respect to any person whose liability the subpoena was issued (other than a person taking action as provided by subdivision (a)) shall be suspended for the period beginning on the date which is six months after the service of the subpoena and ending with the final resolution of that response.

(c) The amendments made by the act adding this subdivision are operative for any subpoena served after the effective date of the act adding this subdivision.

history: (History: Amended by Stats. 1999, Ch. 931, Sec. 14. Effective October 10, 1999.)

article: 3. Deficiency Assessments


text: If any taxpayer agrees with the United States Commissioner of Internal Revenue for an extension or renewals thereof of the period for proposing and assessing deficiencies in federal income taxes for any year, the period for mailing a notice of a proposed deficiency shall be four years after the return was filed or six months after the date of the expiration of the agreed period for assessing deficiencies in the federal income tax, whichever period expires the later.

article: 3. Deficiency Assessments


text:
(a) For the purposes of Sections 19057, 19058, and 19065, a return of tax imposed under Part 10 (commencing with Section 17001) or Part 11 (commencing with Section 23001) except a return required by Article 5 (commencing with Section 18661) of Chapter 2 (relating to withholding), filed before the last day prescribed by law for filing (determined without regard to any extension of time for filing the return), shall be considered as filed on that day. For purposes of Section 19306, payment of any portion of the tax made before the last day prescribed for the payment of the tax shall be considered made on the last day.

(b) For purposes of this section, if a return required by Article 5 (commencing with Section 18661) of Chapter 2 (relating to withholding) or a return of tax imposed by Section 13020 of the Unemployment Insurance Code (relating to withholding tax on wages), for any period ending with or within a calendar year is filed before April 15 of the succeeding calendar year, that return shall be considered filed on April 15 of that calendar year.

article: 3. Deficiency Assessments


text: In the case of any information that is required to be reported to the Franchise Tax Board under Section 19141.2 or 19141.5, the time for assessment of any tax imposed by Part 10 (commencing with Section 17001), Part 11 (commencing with Section 23001), or this part with respect to any event or period to which that information relates shall not expire before the date that is four years after the date on which the Franchise Tax Board is furnished the information required to be reported under Section 19141.2 or 19141.5, or within the periods provided in Section 19057, 19058, 19059, 19060, 19065, 24945, 24946, Section 1033(a)(2)(C) of the Internal Revenue Code, or Section 1033(a)(2)(D) of the Internal Revenue Code, whichever period expires later.

history: (History: Added by Stats. 1998, Ch. 322, Sec. 49. Effective August 20, 1998.)

article: 3. Deficiency Assessments


text:
(a) Where before the expiration of the time prescribed for the mailing of a notice of a proposed deficiency assessment, the taxpayer consents in writing to an assessment after that time, the assessment may be made at any time prior to the expiration of the period agreed upon. The period agreed upon may be extended by subsequent agreements in writing made before the expiration of the period previously agreed upon.

(b) The Franchise Tax Board shall notify the taxpayer of the taxpayer’s right to refuse to extend the expiration of the time prescribed for the mailing of a notice of a proposed deficiency assessment, or to limit that extension to a particular period of time, on each occasion when the taxpayer is requested to provide the taxpayer’s consent.

(c) The amendments made by the act adding this subdivision shall apply to any request to extend the expiration of the time prescribed for the mailing of a notice of a proposed deficiency assessment made after December 31, 2000.

history: (History: Amended by Stats. 1999, Ch. 931, Sec. 15. Effective October 10, 1999.)

article: 3. Deficiency Assessments


text: The taxes imposed by Part 10 (commencing with Section 17001) or Part 11 (commencing with Section 23001) upon any taxpayer other than a transferee for which any person other than the taxpayer is liable may be assessed against that person in the manner provided for the assessment of deficiencies. The taxes may be assessed at any time within which deficiency assessments may be made against the taxpayer; provided, however, the running of the period of limitations upon the assessment of the liability imposed upon any person other than the taxpayer shall, after the mailing of the notice provided for in Section 19033 to the taxpayer, be suspended for the period during which the taxpayer exercises an administrative remedy as provided in Section 19041, 19045, or 19048.

path: 2. OTHER TAXES > 10.2. ADMINISTRATION OF FRANCHISE AND INCOME TAX LAWS > 4. Payments and Assessments > 4. Assessments against Persons Secondarily Liable


text: The provisions of this part respecting the collection of taxes apply to the collection of the taxes from the person secondarily liable to the same extent and with the same force and effect as though that person were the taxpayer.

article: 4. Assessments against Persons Secondarily Liable


text:
The amounts of the following liabilities, except as hereinafter provided in this section and Section 19074, shall be assessed, collected, and paid in the same manner and subject to the same provisions and limitations as in the case of a deficiency (including the provisions in the case of a delinquency in payment after notice and demand, the provisions authorizing proceedings in court for collection, and the provisions prohibiting claims and suits for refunds):

(a) The liability, at law or in equity, of a transferee of property of a taxpayer, in respect of the tax (including interest, additional amounts, and additions to the tax provided by law) imposed upon the taxpayer.

(b) The liability of a fiduciary under Part 10 (commencing with Section 17001) in respect of the payment of any such tax from the estate of the taxpayer.

Any such liability may be either as to the amount of tax shown on the return or as to any deficiency in tax.


text:
The period of limitation for assessment of the liability of any person other than the taxpayer who is a transferee or fiduciary of the taxpayer shall be as follows:

(a) In the case of the liability of an initial transferee of the property of the taxpayer, within one year after the expiration of the period of limitation for assessment against the taxpayer.

(b) In the case of the liability of a transferee of a transferee of the property of the taxpayer, within one year after the expiration of the period of limitation for assessment against the preceding transferee, but only if within three years after the expiration of the period of limitation for assessment against the taxpayer; except that if before the expiration of the period of limitation for the assessment of the liability of the transferee of a transferee, a court proceeding for the collection of the tax or liability in respect thereof has been begun against the taxpayer or last preceding transferee, respectively, then the period of limitation for assessment of the liability of the transferee of a transferee shall expire one year after the return of execution in the court proceeding.

(c) In the case of the liability of a fiduciary, not later than one year after the liability arises or not later than the expiration of the period for collection of the tax in respect of which the liability arises, whichever is the later;

(d) Where before the expiration of the time prescribed in subdivision (a), (b) or (c) for the assessment of the liability, both the Franchise Tax Board and the transferee or fiduciary have consented in writing to its assessment after that time, the liability may be assessed at any time prior to the expiration of the period agreed upon. The period so agreed upon may be extended by subsequent agreements in writing made before the expiration of the period previously agreed upon.

(e) Notwithstanding any of the above subdivisions, the running of the period of limitations upon the assessment of liability against any transferee shall be suspended for the period during which the taxpayer exercises an administrative remedy as provided in Section 19041, 19045, or 19048.


text: If the Franchise Tax Board finds that the assessment or the collection of a tax or a deficiency for any year, current or past, will be jeopardized in whole or in part by delay, it may mail or issue notice of its findings to the taxpayer, or its transferee or transferees, together with a demand for immediate payment of the tax or the deficiency declared to be in jeopardy, including interest and penalties and additions thereto. Any assessment issued under this article shall also be an assessment issued pursuant to Section 19033, if an assessment has not already been issued pursuant to Section 19033 with respect to that taxable year for that amount.

history: (History: Amended by Stats. 2000, Ch. 862, Sec. 13. Effective January 1, 2001.)

article: 5. Jeopardy Assessments

path: 2. OTHER TAXES > 10.2. ADMINISTRATION OF FRANCHISE AND INCOME TAX LAWS > 4. Payments and Assessments > 5. Jeopardy Assessments


text: In the case of a tax for a current period, if the Franchise Tax Board finds that the assessment or collection of the tax will be jeopardized in whole or in part by delay, the Franchise Tax Board may declare the taxable period of the taxpayer immediately terminated. The Franchise Tax Board shall mail or issue notice of its finding and declaration to the taxpayer, together with a demand for a return and immediate payment of the tax based on the period declared terminated, including therein income accrued and deductions incurred up to the date of termination if not otherwise properly includible or deductible in respect of the period, and the tax shall be immediately due and payable whether or not the time otherwise allowed by law for filing the return and paying the tax has expired.

history: (History: Amended by Stats. 2000, Ch. 862, Sec. 14. Effective January 1, 2001.)

article: 5. Jeopardy Assessments


text:
(a) A jeopardy assessment is immediately due and payable, and proceedings for collection may be commenced at once.

(b) The collection of the whole or any amount of a jeopardy assessment may be stayed, at any time before the assessment becomes final, by filing with the Franchise Tax Board: (1) a bond in an amount equal to the amount (together with interest thereon to the date of payment) as to which the stay is desired, conditioned upon the payment of the amount, the collection of which is stayed by the bond, upon notice and demand by the Franchise Tax Board after the assessment becomes final; or (2) other security in the amount as the Franchise Tax Board may deem necessary, not exceeding double the amount (together with interest thereon to the date of payment) as to which the stay is desired.

(c) Upon the filing of the bond or other security the collection of so much of the amount assessed as is covered by the bond or other security shall be stayed. The taxpayer shall have the right to waive the stay at any time in respect of the whole or any part of the amount covered by the bond or other security, and if as a result of the waiver any part of the amount covered by the bond or other security is paid, then the bond or other security shall, at the request of the taxpayer, be proportionately reduced. If any portion of the jeopardy assessment is abated, the bond or other security shall, at the request of the taxpayer, be proportionately reduced.

(d) The Franchise Tax Board, prior to the time the assessment becomes final, may stay collection of the whole or any amount of a jeopardy assessment if it finds that jeopardy does not exist.

(e) Where collection of the whole or any amount of a jeopardy assessment has been stayed under this section, the period of limitation on any action to collect shall be tolled during the time of the stay.

article: 5. Jeopardy Assessments


text:
(a) (1) (A) Unless the Chief Counsel of the Franchise Tax Board (or the chief counsel’s delegate) personally approves (in writing) the assessment or levy, no assessment shall be made under this article and no levy shall be issued less than 30 days after either of the following:

(i) A notice and demand is mailed or issued for payment pursuant to Section 19081.

(ii) Notice and demand for a return and payment is mailed or issued pursuant to Section 19082.

(B) Within five days after the day on which either a notice and demand for payment is mailed or issued pursuant to Section 19081, or notice and demand for a return and payment is mailed or issued pursuant to Section 19082, the Franchise Tax Board shall mail or issue the taxpayer a written statement of the information upon which the Franchise Tax Board relies in issuing that notice and demand.

(2) Within 30 days after the day on which the taxpayer is furnished the written statement described in paragraph (1), or within 30 days after the last day of the period within which the statement is required to be furnished, the taxpayer may petition the Franchise Tax Board to review whether its finding pursuant to Section 19081 or 19082 is reasonable under the circumstances, specifying the grounds on which the petition is based. The filing of a petition for review shall not operate to stay collection. Collection may be stayed only as provided in Section 19083. A petition filed pursuant to this paragraph shall also be considered a protest filed pursuant to Section 19041 against the proposed additional tax.

(3) If a petition for review under paragraph (2) is not made within the 30-day period set forth in that paragraph, the finding of the Franchise Tax Board pursuant to Section 19081 or 19082 is final.

(4) After a petition for review is filed under paragraph (2), the Franchise Tax Board shall determine whether or not the issuance of notice and demand under Section 19081 or 19082 is reasonable under the circumstances. In making this determination, the Franchise Tax Board shall grant the taxpayer or authorized representative an oral hearing if the taxpayer has so requested in the petition. Chapter 4.5 (commencing with Section 11400) of Part 1 of Division 3 of Title 2 of the Government Code does not apply to a hearing under this paragraph. The burden of proof with respect to whether a jeopardy exists as to collection or an assessment is upon the Franchise Tax Board.

(5) The Franchise Tax Board shall make the determination under paragraph (4) within 90 days of the filing of the petition for review unless the taxpayer requests, in writing, additional time.

(6) In making the determination required by paragraph (4), the Franchise Tax Board shall consider all relevant factors, including, but not limited to, the likelihood that collection will be jeopardized, the assets of the taxpayer, and the amount of the assessment as it relates to whether jeopardy status exists. The burden of proof as to the amount of the assessment for purposes of determining jeopardy status is upon the taxpayer.

(b) (1) Within 60 days after the earlier of the following days, the taxpayer may appeal the determination to the State Board of Equalization in the manner provided in Section 19085:

(A) The day the Franchise Tax Board notifies the taxpayer of the determination described in paragraph (4) of subdivision (a).

(B) One day after the time period prescribed by paragraph (5) of subdivision (a) for the Franchise Tax Board to make its determination.

(2) If an appeal is not filed before the expiration of the time periods, the Franchise Tax Board’s determination is final. Filing of an appeal shall not operate to stay collection. Collection may be stayed only as provided in Section 19083.

(3) Within 60 days after an appeal is filed under paragraph (1), the board shall determine whether the issuance of notice and demand under Section 19081 or 19082 is reasonable under the circumstances. The burden of proof with respect to whether a jeopardy exists as to collection or an assessment is upon the Franchise Tax Board.

(4) If the board determines that a jeopardy status does not apply to all or part of the assessment, the board may modify the amount of the assessment to which the jeopardy attaches. If the board does not act within the time period provided in paragraph (3) as modified by paragraph (6), the board will be deemed to have denied the taxpayer’s appeal.

(5) In making the determination required by paragraph (3), the board shall consider all relevant factors, including, but not limited to, the likelihood that collection will be jeopardized, the assets of the taxpayer, and the amount of the assessment as it relates to whether jeopardy status exists. The burden of proof as to the amount of the assessment for purposes of determining jeopardy status is upon the taxpayer.

(6) If either party requests an extension of the 60-day period set forth in paragraph (3) and establishes reasonable grounds why the extension should be granted, the board may grant an extension of not more than 30 additional days.

(c) (1) Within 60 days after the earlier of the following days, either party may bring a civil action against the other in superior court for a judicial determination as to whether or not the issuance of the notice and demand under Section 19081 or 19082 is reasonable under the circumstances:

(A) The day the board notifies the taxpayer of its determination described in paragraph (3), as modified by paragraph (6), of subdivision (b).

(B) If the board fails to make a timely determination, then one day after the time prescribed for the board to make its determination.

(2) If a civil action under this subdivision is not commenced within the 60-day period set forth in paragraph (1), the board’s determination is final. The filing of the civil action shall not operate to stay collection. Collection shall be stayed only as provided by Section 19083.

(3) Within 60 days after proper service is made, the superior court shall determine whether the issuance of notice and demand under Section 19081 or 19082 is reasonable under the circumstances. The burden of proof with respect to whether a jeopardy exists as to collection or an assessment is upon the Franchise Tax Board.

(4) If the court determines that a jeopardy status does not apply to all or part of the assessment, the court may modify the amount of the assessment to which the jeopardy attaches.

(5) In making the determination required by paragraph (3), the superior court shall consider all relevant factors, including, but not limited to, the likelihood that collection will be jeopardized, the assets of the taxpayer, and the amount of the assessment as it relates to whether jeopardy status exists. The burden of proof as to the amount of the assessment for purposes of determining jeopardy status is upon the taxpayer.

(6) If either party in the action requests an extension of the 60-day period set forth in paragraph (3) of subdivision (c) and establishes reasonable grounds why the extension should be granted, the superior court may grant an extension of not more than 30 additional days.

(7) Actions filed pursuant to this section shall be filed in the Superior Court of the County of Los Angeles, the City and County of San Francisco, the County of San Diego, or the County of Sacramento. Sections 19387 and 19389 shall apply to those actions.

(8) The determination made by a superior court under this section shall be final and conclusive and shall not be reviewed by any other court.

(d) The amendments made by the act adding this subdivision are operative for taxes assessed and levies made after the effective date of the act adding this subdivision.

history: (History: Amended by Stats. 1999, Ch. 931, Sec. 16. Effective October 10, 1999.)

article: 5. Jeopardy Assessments


text: The taxpayer may appeal to the board from the Franchise Tax Board’s action on the petition for review. The appeal shall be made in the manner prescribed by Section 19046. Article 3 (commencing with Section 19031) of Chapter 4 relating to an appeal from the action of the Franchise Tax Board on a protest against an additional tax proposed to be assessed applies to the appeal.

article: 5. Jeopardy Assessments


text: In any proceeding brought to enforce payment of taxes made due and payable by this article, the finding of the Franchise Tax Board under Section 19081, whether made after notice to the taxpayer or not, is for all purposes presumptive evidence that the assessment or collection of the tax or the deficiency was in jeopardy. A certificate of the Franchise Tax Board of the mailing or issuing of the notices specified in this article is presumptive evidence that the notices were mailed or issued.

article: 5. Jeopardy Assessments


text:
(a) If any taxpayer fails to file a return, or files a false or fraudulent return with intent to evade the tax, for any taxable year, the Franchise Tax Board, at any time, may require a return or an amended return under penalties of perjury or may make an estimate of the net income, from any available information, and may propose to assess the amount of tax, interest, and penalties due. All the provisions of this part relative to delinquent taxes shall be applicable to the tax, interest, and penalties computed hereunder.

(b) When any assessment is proposed under subdivision (a), the taxpayer shall have the right to protest the same and to have an oral hearing thereon if requested, and also to appeal to the board from the Franchise Tax Board’s action on the protest; the taxpayer must proceed in the manner and within the time prescribed by Sections 19041 to 19048, inclusive.

article: 5. Jeopardy Assessments


text:
(a) On the appointment of a receiver for any taxpayer in any receivership proceeding before any court of the United States or of any state or territory or of the District of Columbia, any deficiency (together with all interest, additional amounts, or additions to the tax provided for by law) determined by the Franchise Tax Board in respect of a tax upon the taxpayer may be immediately assessed.

(b) Any deficiency (together with all interest, additional amounts, and additions to the tax provided by law) determined by the Franchise Tax Board in respect of a tax on either of the following: (1) The debtor’s estate in a case under Title 11 of the United States Code.(2) The debtor, but only if liability for the tax has become res judicata pursuant to a determination in a case under Title 11 of the United States Code,may be immediately assessed if that deficiency has not previously been assessed in accordance with law.

article: 5. Jeopardy Assessments


text:
(a) Every trustee in a case under Title 11 of the United States Code, receiver, assignee for the benefit of creditors or like fiduciary shall give notice of qualification as such to the Franchise Tax Board in the manner and at the time that may be required by regulations of the Franchise Tax Board. The Franchise Tax Board may by regulation provide for any exemptions from the requirements of this section that the Franchise Tax Board deems proper.

(b) If the regulations issued pursuant to this section require the giving of any notice by any fiduciary in any case under Title 11 of the United States Code, or by a receiver in any other court proceeding to the Franchise Tax Board of qualification as such, the running of the period of limitations for mailing a notice of proposed deficiency assessment shall be suspended for the period from the date of the institution of the proceeding to a date 30 days after the date upon which the notice from the receiver or other fiduciary is received by the Franchise Tax Board; but the suspension under this section shall in no case be for a period in excess of two years.

history: (History: Amended by Stats. 1999, Ch. 987, Sec. 73. Effective October 10, 1999.)

article: 5. Jeopardy Assessments


text:
(a) Claims for the deficiency and such interest, additional amounts and additions to the tax may be presented, for adjudication in accordance with law, to the court before which the receivership proceeding (or case under Title 11 of the United States Code) is pending, despite the pendency of an appeal to the board.

(b) In the case of a receivership proceeding, no appeal shall be filed with the board after the appointment of the receiver.

article: 5. Jeopardy Assessments


text: Upon notice and demand from the Franchise Tax Board after termination of the receivership proceeding, the taxpayer shall pay any portion of the claim allowed in the proceeding which is unpaid. The unpaid amount may be collected in the manner provided in this part for the collection of delinquent taxes at any time within six years after termination of the proceeding.

article: 5. Jeopardy Assessments


text: The Franchise Tax Board may prescribe rules and regulations necessary to properly carry out this article.

article: 5. Jeopardy Assessments


text:
(a) If the individual who is in physical possession of cash in excess of ten thousand dollars ($10,000) does not claim that cash in any of the capacities specified in paragraphs (1) and (2), then for purposes of Sections 19081 and 19082, it shall be presumed that the cash represents gross income of a single individual for the taxable year in which the possession occurs, and that the collection of tax will be jeopardized by delay:

(1) The cash is not claimed as his or hers.

(2) The cash is not claimed as belonging to another person whose identity the Franchise Tax Board can readily ascertain and who acknowledges ownership of that cash.

(b) In the case of any assessment resulting from the application of subdivision (a), all of the following apply:

(1) The entire amount of the cash shall be treated as taxable income for the taxable year in which the possession occurs.

(2) That income shall be treated as taxable at the maximum rate under Section 17041.

(3) Except as provided in subdivision (c), the possessor of the cash shall be treated (solely with respect to that cash) as the taxpayer for purposes of Chapter 4 (commencing with Section 19001) and Chapter 5 (commencing with Section 19201).

(c) If, after an assessment resulting from the application of subdivision (a), that assessment is abated and replaced by an assessment against the owner of the cash, that later assessment shall be treated for purposes of all laws relating to lien, levy, and collection as relating back to the date of the original assessment.

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

(1) “Cash” includes any cash equivalent.

(2) “Cash equivalent” means any of the following:

(A) Foreign currency.

(B) Any bearer obligation.

(C) Any medium of exchange to which both of the following apply:

(i) It is of a type which has been frequently used in illegal activities.

(ii) It is specified as a cash equivalent for purposes of this part in regulations prescribed by the Franchise Tax Board.

(3) Any cash equivalent shall be taken into account in the following manner:

(A) In the case of a bearer obligation, at its face amount.

(B) In the case of any other cash equivalent, at its fair market value.

article: 5. Jeopardy Assessments


text:
(a) If any amount of tax imposed by Part 10 (commencing with Section 17001) or Part 11 (commencing with Section 23001), is not paid on or before the last date prescribed for payment, interest on that amount at the adjusted annual rate established under Section 19521 shall be paid for the period from that last date to the date paid.

(b) For purposes of this article, the last date prescribed for payment of the tax shall be determined under Chapter 4 (commencing with Section 19001), with the application of the following rules:

(1) The last date prescribed for payment shall be determined without regard to any extension of time for payment or any installment agreement entered into under Section 19008.

(2) The last date prescribed for payment shall be determined without regard to any notice and demand for payment issued, by reason of jeopardy as provided in Article 5 (commencing with Section 19081), prior to the last date otherwise prescribed for that payment.

(3) In all other cases in which the last date for payment is not otherwise prescribed, the last date for payment shall be deemed to be the date the liability for tax arises (and in no event shall be later than the date notice and demand for the tax is made by the Franchise Tax Board).

(c) Except as provided in this article:

(1) Interest prescribed under this article on any tax shall be paid upon notice and demand, and shall be assessed, collected, and paid in the same manner as taxes. Any reference in Part 10 (commencing with Section 17001), Part 11 (commencing with Section 23001), or this part (except Article 3 (commencing with Section 19031), relating to deficiency assessments) to any tax imposed by Part 10 (commencing with Section 17001) or Part 11 (commencing with Section 23001) shall be deemed also to refer to interest imposed by this article on that tax.

(2) (A) Interest shall be imposed under subdivision (a) in respect to any assessable penalty, additional amount, or addition to the tax (other than an addition to tax imposed under Section 19131, 19132, or 19164) only if that assessable penalty, additional amount, or addition to the tax is not paid within 15 calendar days from the date of notice and demand therefor, and in that case interest shall be imposed only for the period from the date of the notice and demand to the date of payment.

(B) Interest shall be imposed under this article with respect to any addition to tax imposed by Section 19131 (relating to failure to file a return on or before the due date), Section 19132 (relating to underpayment of tax), or Section 19164 (relating to imposition of the accuracy-related penalty), for the period that:

(i) Begins on the date on which the return of the tax with respect to which that addition to tax is imposed is required to be filed (including any extensions), and

(ii) Ends on the date of payment of that addition to tax.

(3) If notice and demand is made for payment of any amount and if that amount is paid within 15 calendar days after the date of the notice and demand, interest under this article on the amount so paid shall not be imposed for the period after the date of the notice and demand.

(d) This article shall not apply to any failure to pay estimated tax required by Section 19025 or 19136.

history: (History: Amended by Stats. 2000, Ch. 863, Sec. 24. Effective January 1, 2001.)

article: 6. Interest

path: 2. OTHER TAXES > 10.2. ADMINISTRATION OF FRANCHISE AND INCOME TAX LAWS > 4. Payments and Assessments > 6. Interest


text:
(a) The Franchise Tax Board may abate all or any part of any of the following:

(1) Any interest on a deficiency or related to a proposed deficiency to the extent that interest is attributable in whole or in part to any unreasonable error or delay by an officer or employee of the Franchise Tax Board (acting in his or her official capacity) in performing a ministerial or managerial act.

(2) Any interest on a payment of any tax described in Section 19033 to the extent that any delay in that payment is attributable to an officer or employee of the Franchise Tax Board (acting in his or her official capacity) being dilatory in performing a ministerial or managerial act.

(3) Any interest accruing from a deficiency based on a final federal determination of tax, for the same period that interest was abated on the related federal deficiency amount under Section 6404(e) of the Internal Revenue Code, and the error or delay occurred on or before the issuance of the final federal determination. This subparagraph shall apply to any ministerial act for which the interest accrued after September 25, 1987, or for any managerial act applicable to a taxable year beginning on or after January 1, 1998, for which the Franchise Tax Board may propose an assessment or allow a claim for refund.

(b) For purposes of subdivision (a):

(1) Except as provided in paragraph (3), an error or delay shall be taken into account only if no significant aspect of that error or delay can be attributed to the taxpayer involved and after the Franchise Tax Board has contacted the taxpayer in writing with respect to that deficiency or payment.

(2) (A) Except as provided in paragraph (4), after the Franchise Tax Board mails its notice of determination not to abate interest, a taxpayer may appeal the Franchise Tax Board’s determination to the State Board of Equalization within the following periods:

(i) Thirty days in the case of any unpaid interest described under subdivision (a).

(ii) Ninety days in the case of any paid interest described under subdivision (a).

(B) The State Board of Equalization shall have jurisdiction over the appeal to determine whether the Franchise Tax Board’s failure to abate interest under this section was an abuse of discretion, and may order an abatement.

(C) Except for clauses (i) and (ii) of subparagraph (A), the provisions of this paragraph are operative for requests for abatement of interest made on or after January 1, 1998. The provisions of clauses (i) and (ii) of subparagraph (A) shall apply to requests for abatement of interest made on or after January 1, 2001, in accordance with subdivision (d).

(3) If the Franchise Tax Board fails to mail its notice of determination on a request to abate interest within six months after the request is filed, the taxpayer may consider that the Franchise Tax Board has determined not to abate interest and appeal that determination to the board. This paragraph shall not apply to requests for abatement of interest made pursuant to paragraph (4).

(4) A request for abatement of interest related to a proposed deficiency may be made with the written protest of the underlying proposed deficiency filed pursuant to Section 19041 or with an appeal to the board under Section 19045 in the form and manner required by the Franchise Tax Board. The action of the Franchise Tax Board denying any portion of the request for abatement of interest relating to the proposed deficiency shall be considered as part of the appeal of the action of the Franchise Tax Board on the protest of the proposed deficiency. If the taxpayer filed an appeal from the Franchise Tax Board’s action on the protest of a proposed deficiency and the deficiency is final pursuant to Section 19048, the taxpayer may not thereafter request an abatement of interest accruing prior to the time the deficiency is final. However, the taxpayer may thereafter request an abatement pursuant to this section limited to interest accruing after the deficiency is final.

(c) The Franchise Tax Board shall abate the assessment of all interest on any erroneous refund for which an action for recovery is provided under Section 19411 until 30 days after the date demand for repayment is made, unless the taxpayer (or a related party) has in any way caused that erroneous refund.

(d) The amendments made to this section by Chapter 863 of the Statutes of 2000 shall apply to requests for abatement of interest and appeals made on or after January 1, 2001.

(e) Except as provided in subparagraph (C) of paragraph (2) of subdivision (b), the amendments made by Chapter 600 of the Statutes of 1997 are operative with respect to taxable years beginning on or after January 1, 1998.

history: (History: Amended by Stats. 2003, Ch. 455, Sec. 2. Effective January 1, 2004.)

article: 6. Interest


text: In the case of an individual or fiduciary, the Franchise Tax Board shall not assess interest charges pursuant to Section 19101 for the period between 45 days after the date of final review of an audit determining an additional amount is owed and the date a notice of proposed deficiency assessment is sent to the taxpayer.

history: (History: Amended by Stats. 2000, Ch. 863, Sec. 28. Effective January 1, 2001.)

article: 6. Interest


text: Where an overpayment is made by any individual for any year, and a deficiency is owing from the spouse of the taxpayer for the same year, and both spouses notify the Franchise Tax Board in writing prior to the expiration of the time within which credit for the overpayment may be allowed that the overpayment may be credited against the deficiency, no interest shall be assessed on that portion of the deficiency as is extinguished by the credit for the period of time subsequent to the date the overpayment was made.

history: (History: Amended by Stats. 2016, Ch. 50, Sec. 109. (SB 1005) Effective January 1, 2017.)

article: 6. Interest


text:
(a) Where an overpayment is made by any taxpayer for any year, and a deficiency is owing from the same taxpayer for any other year, the overpayment, if the period within which credit for the overpayment may be allowed has not expired, shall be credited on the deficiency, if the period within which assessment of the deficiency may be proposed has not expired, and the balance, if any, shall be credited or refunded to the taxpayer. No interest shall be assessed on the portion of the deficiency as is extinguished by the credit for the period of time subsequent to the date the overpayment was made.

(b) For the purposes of this section the returns of a decedent and his or her estate shall be considered returns of the same taxpayer and the returns for the decedent and his or her estate filed for the year of death shall be considered returns for different taxable years.

(c) This section is not intended, nor shall it be construed, as a limitation on the Franchise Tax Board’s right to offset or recoup barred assessments against overpayments.

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

article: 6. Interest


text:
(a) If the Franchise Tax Board extends for any period the time for filing a return under Section 18572 or subdivision (a) of Section 18567 and the time for paying the tax under Section 18572 or subdivision (c) of Section 18567 (and waives any penalties relating to the failure to so file or so pay) for any taxpayer located in a presidentially declared disaster area or any county or city in this state which is proclaimed by the Governor to be in a state of emergency that incurred a loss, the Franchise Tax Board shall abate for that period the assessment of any interest prescribed under this article on that tax.

(b) (1) The Franchise Tax Board may, after written request by a taxpayer, abate the interest on any deficiency or related to a proposed deficiency described in Section 19033 or on a payment of tax to the extent that interest is attributable in whole or in part to the Franchise Tax Board’s delay in the mailing of a notice or other correspondence that requires a response from a taxpayer, in connection with a presidentially declared disaster area, or any county or city in this state that is proclaimed by the Governor to be in a state of emergency.

(2) (A) Except as provided in paragraph (4), after the Franchise Tax Board mails its notice of determination not to abate interest, a taxpayer may appeal the Franchise Tax Board’s determination to the board within the following period, as applicable:

(i) Thirty days in the case of any unpaid interest described under paragraph (1).

(ii) Ninety days in the case of any paid interest described under paragraph (1).

(B) The board shall have jurisdiction over the appeal to determine whether the Franchise Tax Board’s failure to abate interest under this subdivision was an abuse of discretion, and may order an abatement.

(3) If the Franchise Tax Board fails to mail its notice of determination on a request to abate interest within six months after the request is filed, it shall be considered that the Franchise Tax Board has determined not to abate interest and the taxpayer may appeal that determination to the board. This paragraph shall not apply to requests for abatement of interest made under paragraph (4).

(4) A request for abatement of interest related to a proposed deficiency may be made with the written protest of the underlying proposed deficiency filed under Section 19041 or with an appeal to the board under Section 19045 in the form and manner required by the Franchise Tax Board. The action of the Franchise Tax Board denying any portion of the request for abatement of interest related to the proposed deficiency shall be considered as part of the appeal of the action of the Franchise Tax Board on the protest of the proposed deficiency. If the taxpayer filed an appeal from the Franchise Tax Board’s action on the protest of a proposed deficiency and the deficiency is final pursuant to Section 19048, the taxpayer may not thereafter request an abatement of interest accruing prior to the time the deficiency is final. The taxpayer, however, may thereafter request an abatement pursuant to this subdivision limited to the interest accruing after the deficiency is final.

(5) This subdivision shall apply to requests for abatement of interest made on or after the effective date of the act adding this paragraph.

(c) For purposes of this section, the term “presidentially declared disaster area” means, with respect to any taxpayer, any area which the President has determined warrants assistance by the federal government under the Disaster Relief and Emergency Assistance Act.

history: (History: Amended by Stats. 2012, Ch. 382, Sec. 2. (SB 1158) Effective January 1, 2013.)

article: 6. Interest


text:
(a) When the correction of an erroneous inclusion or deduction of an item or items in the computation of income of a trust, estate, parent, or spouse for any year results in an overpayment for that year by the trust, estate, parent, or spouse, and also results in a deficiency for the same year for a grantor of the trust or beneficiary of the estate or trust, or child of the parent, or spouse of the child, or the spouse of the spouse, the overpayment, if the period within which credit for the overpayment may be allowed has not expired, shall be credited on the deficiency, if the period within which the deficiency may be proposed has not expired, and the balance, if any, shall be credited or refunded. No interest shall be assessed on the portion of the deficiency as is extinguished by the credit for the period of time subsequent to the date the overpayment was made.

(b) When the correction of an erroneous inclusion or deduction of an item or items in the computation of income of a grantor of a trust, beneficiary of an estate or trust, a child, or spouse of the child, or a spouse for any year results in an overpayment for that year by the grantor, beneficiary, child, or spouse, and also results in a deficiency for the same year for the grantor’s or beneficiary’s trust, the beneficiary’s estate, the child’s parent, or spouse of the child, or the beneficiary’s spouse, the overpayment, if the period within which credit for the overpayment may be allowed has not expired, shall be credited on the deficiency, if the period within which the deficiency may be proposed has not expired, and the balance, if any, shall be credited or refunded. No interest shall be assessed on the portion of the deficiency as is extinguished by the credit for the period of time subsequent to the date the overpayment was made.

(c) Subdivisions (a) and (b) are not intended, nor shall they be construed as a limitation on the Franchise Tax Board’s right to offset or recoup barred assessments against overpayments.

history: (History: Amended by Stats. 2016, Ch. 50, Sec. 110. (SB 1005) Effective January 1, 2017.)

article: 6. Interest


text: Interest may be waived for any period for which the Franchise Tax Board determines that an individual or fiduciary demonstrates inability to pay that interest solely because of extreme financial hardship caused by significant disability or other catastrophic circumstance. Any waiver under this section shall be withdrawn retroactively if made because of fraud, malfeasance, misrepresentation, or omission of any material fact.

article: 6. Interest


text: If any portion of a tax is satisfied by credit of an overpayment, then no interest shall be imposed under this article on the portion of the tax so satisfied for any period during which, if the credit had not been made, interest would have been allowable with respect to the overpayment.

article: 6. Interest


text: Interest prescribed under this article on any tax may be assessed and collected at any time during the period within which the tax to which the interest relates may be collected.

article: 6. Interest