text:
(a) In any proceeding involving the issue of whether or not any person is liable for a penalty under Section 19177, 19178, or 19179, the burden of proof with respect to that issue shall be on the Franchise Tax Board.

(b) Sections 19041 to 19049, inclusive, (relating to deficiency procedures) shall not apply with respect to the assessment or collection of the penalties provided by Section 19177, 19178, or 19179.

(c) (1) If, within 30 days after the day on which notice and demand of any penalty under Section 19177 or 19178 is made against any person, that person pays an amount which is not less than 15 percent of the amount of that penalty and files a claim for refund of the amount so paid, no levy or proceeding in court for the collection of the remainder of that penalty shall be made, begun, or prosecuted until the final resolution of a proceeding begun as provided in paragraph (2). Notwithstanding Section 19381, the beginning of that proceeding or levy during the time that prohibition is in force may be enjoined by a proceeding in the superior court. Nothing in this paragraph shall be construed to prohibit any counterclaim for the remainder of that penalty in a proceeding begun as provided in paragraph (2).

(2) If, within 30 days after the day on which the claim for refund of any partial payment of any penalty under Section 19177 or 19178 is denied (or, if earlier, within 30 days after the expiration of six months after the day on which a claim for refund was filed), the person fails to begin a proceeding in the superior court for the determination of the liability for that penalty, paragraph (1) shall cease to apply with respect to that penalty, effective on the day following the close of the applicable 30-day period referred to in this paragraph.

(3) The running of the period of limitations provided in Section 19371 on the collection by levy or by a proceeding in court in respect of any penalty described in paragraph (1) shall be suspended for the period during which the Franchise Tax Board is prohibited from collecting by levy or a proceeding in court.

history: (History: Amended by Stats. 2002, Ch. 374, Sec. 6. Effective January 1, 2003.)

article: 7. Penalties and Additions to Tax


kind: section

code: RTC

text: A penalty shall be imposed for failing to meet the requirements of Section 18649, relating to original issue discount reporting requirements with respect to any person subject to tax under Part 10 (commencing with Section 17001) or Part 11 (commencing with Section 23001). The penalty shall be determined in accordance with Section 6706 of the Internal Revenue Code.

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

division: 2. OTHER TAXES

chapter: 4. Payments and Assessments

article: 7. Penalties and Additions to Tax

path: 2. OTHER TAXES > 10.2. ADMINISTRATION OF FRANCHISE AND INCOME TAX LAWS > 4. Payments and Assessments > 7. Penalties and Additions to Tax


text:
(a) A penalty shall be imposed for failure to furnish information pursuant to Section 18628 and shall be determined in accordance with Section 6707 of the Internal Revenue Code, relating to failure to furnish information regarding reportable transactions, except as otherwise provided.

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

(c) A penalty under this section does not apply if it is shown that the additional information required under paragraph (2) of subdivision (d) of Section 18628 was not identified in a Franchise Tax Board notice issued prior to the date the transaction or shelter was entered into.

(d) The provisions of subdivision (e) of Section 19173, relating to the rescission of the penalty by the Chief Counsel of the Franchise Tax Board, shall apply to any penalty imposed by this section.

history: (History: Amended by Stats. 2005, Ch. 691, Sec. 47.7. Effective October 7, 2005.)

part: 10.2. ADMINISTRATION OF FRANCHISE AND INCOME TAX LAWS

article: 7. Penalties and Additions to Tax


text:
(a) A penalty shall be imposed for failing to meet the requirements of Section 18648.5 and the penalty amount shall be determined in accordance with Section 6714 of the Internal Revenue Code.

(b) No penalty shall be imposed under paragraph (1) upon a showing that the requirements in Section 6115 of the Internal Revenue Code have been met with respect to that contribution for federal purposes.

(c) The provisions of this section shall apply to quid pro quo contributions made on or after January 1, 1997.

history: (History: Added by Stats. 1997, Ch. 611, Sec. 61. Effective October 3, 1997.)

article: 7. Penalties and Additions to Tax


text:
(a) (1) A penalty shall be imposed for failure to file correct information returns, as required by this part, and that penalty shall be determined in accordance with Section 6721 of the Internal Revenue Code, relating to failure to file correct information returns.

(2) Section 6721(e) of the Internal Revenue Code, relating to penalty in case of intentional disregard, is modified to the extent that the reference to Section 6041A(b) of the Internal Revenue Code, relating to direct sales of five thousand dollars ($5,000) or more, does not apply.

(b) (1) A penalty shall be imposed for failure to furnish correct payee statements as required by this part, and that penalty shall be determined in accordance with Section 6722 of the Internal Revenue Code, relating to failure to furnish correct payee statements.

(2) Section 6722(c) of the Internal Revenue Code, relating to exception for de minimis failures, is modified to the extent that the references to Sections 6041A(b) and 6041A(e) of the Internal Revenue Code, relating to direct sales of five thousand dollars ($5,000) or more, and statements to be furnished to persons with respect to whom information is required to be furnished, does not apply.

(c) A penalty shall be imposed for failure to comply with other information reporting requirements under this part, and that penalty shall be determined in accordance with Section 6723 of the Internal Revenue Code, relating to failure to comply with other information reporting requirements.

(d) (1) The provisions of Section 6724 of the Internal Revenue Code, relating to waiver; definitions, and special rules, apply, except as otherwise provided.

(2) Section 6724(d)(1) of the Internal Revenue Code, relating to information return, is modified as follows:

(A) The following references are substituted:

(i) Subdivision (a) of Section 18640, in lieu of Section 6044(a)(1) of the Internal Revenue Code.

(ii) Subdivision (a) of Section 18644, in lieu of Section 6050A(a) of the Internal Revenue Code, relating to reports.

(B) References to Sections 4101(d), 6041(b), 6041A(b), 6045(d), 6051(d), and 6053(c)(1) of the Internal Revenue Code do not apply.

(C) The term “information return” also includes both of the following:

(i) The return required by paragraph (1) of subdivision (g) of Section 18662.

(ii) The return required by subdivision (a) of Section 18631.7.

(3) Section 6724(d)(2) of the Internal Revenue Code, relating to payee statement, is modified as follows:

(A) The following references are substituted:

(i) Subdivision (b) of Section 18640, in lieu of Section 6044(e) of the Internal Revenue Code, relating to statements to be furnished to persons with respect to whom information is required.

(ii) Subdivision (b) of Section 18644, in lieu of Section 6050A(b) of the Internal Revenue Code, relating to written statement.

(B) References to Sections 6031(b), 6037(b), 6041A(e), 6045(d), 6051(d), 6053(b), and 6053(c) of the Internal Revenue Code shall not apply.

(C) The term “payee statement” shall also include the statement required by paragraph (2) of subdivision (g) of Section 18662.

(e) In the case of each failure to provide a written explanation as required by Section 402(f) of the Internal Revenue Code, relating to written explanation to recipients of distributions eligible for rollover treatment, at the time prescribed therefor, unless it is shown that the failure is due to reasonable cause and not to willful neglect, there shall be paid, on notice and demand of the Franchise Tax Board and in the same manner as tax, by the person failing to provide that written explanation, an amount equal to ten dollars ($10) for each failure, but the total amount imposed on that person for all those failures during any calendar year shall not exceed five thousand dollars ($5,000).

(f) Any penalty imposed by this part shall be paid on notice and demand by the Franchise Tax Board and in the same manner as tax.

(g) The amendments made to this section by Chapter 359 of the Statutes of 2015 apply to information returns required to be filed on or after January 1, 2016.

(h) The amendments made to this section by the act adding this subdivision shall apply to information returns required to be filed on or after January 1, 2026.

history: (History: Amended by Stats. 2025, Ch. 231, Sec. 71. (SB 711) Effective October 1, 2025.)

article: 7. Penalties and Additions to Tax


text:
(a) A penalty of fifty dollars ($50) shall be imposed for each failure, unless it is shown that the failure is due to reasonable cause, by any person required to file who fails to file a report at the time and in the manner required by any of the following provisions:

(1) Subdivision (c) of Section 17507, relating to individual retirement accounts.

(2) Section 220(h) of the Internal Revenue Code, relating to medical savings accounts for taxable years beginning on or after January 1, 1997.

(3) Subdivision (b) of Section 17140.3 or subdivision (b) of Section 23711 relating to qualified tuition programs.

(4) Subdivision (e) of Section 23712, relating to Coverdell education savings accounts.

(b) (1) Any individual who:

(A) Is required to furnish information under Section 17508 as to the amount designated nondeductible contributions made for any taxable year, and

(B) Overstates the amount of those contributions made for that taxable year, shall pay a penalty of one hundred dollars ($100) for each overstatement unless it is shown that the overstatement is due to reasonable cause.

(2) Any individual who fails to file a form required to be filed by the Franchise Tax Board under Section 17508 shall pay a penalty of fifty dollars ($50) for each failure unless it is shown that the failure is due to reasonable cause.

(c) Article 3 (commencing with Section 19031) of this chapter (relating to deficiency assessments) shall not apply in respect of the assessment or collection of any penalty imposed under this section.

history: (History: Amended by Stats. 2005, Ch. 691, Sec. 48. Effective October 7, 2005.)

article: 7. Penalties and Additions to Tax


text:
(a) Section 6695A of the Internal Revenue Code, relating to substantial and gross valuation misstatements attributable to incorrect appraisals, shall apply, except as otherwise provided.

(b) This section shall apply to appraisals with respect to returns or submissions filed on or after January 1, 2011.

history: (History: Added by Stats. 2010, Ch. 14, Sec. 51. (SB 401) Effective January 1, 2011.)

article: 7. Penalties and Additions to Tax


text:
(a) Section 6720B of the Internal Revenue Code, relating to the fraudulent identification of exempt use property, shall apply, except as otherwise provided.

(b) This section shall apply to identifications made after January 1, 2011.

history: (History: Added by Stats. 2010, Ch. 14, Sec. 52. (SB 401) Effective January 1, 2011.)

article: 7. Penalties and Additions to Tax


text:
(a) The Franchise Tax Board shall include with each notice imposing a penalty under this part information that contains the name of the penalty, the section of this part under which the penalty is imposed, and a description of the computation of the penalty. Upon the request of the taxpayer, the Franchise Tax Board shall also provide a computation of the penalty imposed.

(b) (1) No penalty under this part shall be imposed unless the initial determination of the imposition of the penalty is personally approved in writing by the immediate supervisor of the individual making that determination or a higher level official as designated by the executive officer, or the officer’s delegee.

(2) Paragraph (1) shall not apply to any of the following:

(A) Any addition to tax under Sections 19131, 19132, 19136, or 19142.

(B) Any addition to tax imposed pursuant to subdivision (b) of Section 19164.

(C) Any other penalty automatically calculated through electronic means.

(D) Any penalty resulting from a change or correction by the Commissioner of Internal Revenue or other officer of the United States or other competent authority required to be reported under subdivision (a) of Section 18622.

(c) For purposes of this section, “penalty” includes any addition to tax or any additional amount.

(d) This section shall apply to notices issued and penalties imposed after December 31, 2001.

(e) The amendments made to this section by the act adding this subdivision shall apply for additions to tax imposed on or after January 1, 2024.

history: (History: Amended by Stats. 2024, Ch. 34, Sec. 30. (SB 167) Effective June 27, 2024.)

article: 7. Penalties and Additions to Tax


text:
(a) The Franchise Tax Board may enter into a voluntary disclosure agreement with any qualified entity, qualified shareholder, qualified member, qualified beneficiary, or qualified partner, as defined in Section 19192, that is binding on both the Franchise Tax Board and the qualified entity, qualified shareholder, qualified member, qualified beneficiary, or qualified partner.

(b) The Franchise Tax Board shall do all of the following:

(1) Provide guidelines and establish procedures for qualified entities and their qualified shareholders, qualified members, qualified beneficiaries, or qualified partners to apply for voluntary disclosure agreements.

(2) Accept applications on an anonymous basis from qualified entities and their qualified shareholders, qualified members, qualified beneficiaries, or qualified partners for voluntary disclosure agreements.

(3) Implement procedures for accepting applications for voluntary disclosure agreements through the National Nexus Program administered by the Multistate Tax Commission.

(4) For purposes of considering offers from qualified entities and their qualified shareholders, qualified members, qualified beneficiaries, or qualified partners to enter into voluntary disclosure agreements, take into account the following criteria:

(A) The nature and magnitude of the qualified entity’s previous presence and activity in this state and the facts and circumstances by which the nexus of the qualified entity or qualified shareholder, qualified member, qualified beneficiary, or qualified partner was established.

(B) The extent to which the weight of the factual circumstances demonstrates that a prudent business person exercising reasonable care would conclude that the previous activities and presence in this state were or were not immune from taxation by this state by reason of Public Law 86-272 or otherwise.

(C) Reasonable reliance on the advice of a person in a fiduciary position or other competent advice that the qualified entity or qualified shareholder, qualified member, qualified beneficiary, or qualified partner activities were immune from taxation by this state.

(D) Lack of evidence of willful disregard or neglect of the tax laws of this state on the part of the qualified entity, qualified shareholder, qualified member, qualified beneficiary, or qualified partner.

(E) Demonstrations of good faith on the part of the qualified entity, qualified shareholder, qualified member, qualified beneficiary, or qualified partner.

(F) Benefits that will accrue to the state by entering into a voluntary disclosure agreement.

(5) Act on any application of a voluntary disclosure agreement within 120 days of receipt.

(6) Enter into voluntary disclosure agreements with qualified entities, qualified shareholders, qualified members, qualified beneficiaries, or qualified partners, as authorized in subdivision (a) and based on the criteria set forth in paragraph (4).

(c) Before any voluntary disclosure agreement becomes binding, the Franchise Tax Board, itself, shall approve the agreement in the following manner:

(1) The Executive Officer and Chief Counsel of the Franchise Tax Board shall recommend and submit the voluntary disclosure agreement to the Franchise Tax Board for approval.

(2) Each voluntary disclosure agreement recommendation shall be submitted in a manner as to maintain the anonymity of the taxpayer applying for the voluntary disclosure agreement.

(3) A recommendation for approval of a voluntary disclosure agreement shall be approved or disapproved by the Franchise Tax Board, itself, within 45 days of the submission of that recommendation to the board.

(4) A recommendation of a voluntary disclosure agreement that is not either approved or disapproved by the board within 45 days of the submission of that recommendation shall be deemed approved.

(5) Disapproval of a recommendation of a voluntary disclosure agreement shall be made only by a majority vote of the Franchise Tax Board.

(6) The members of the Franchise Tax Board shall not participate in any voluntary disclosure agreement except as provided in this subdivision.

(d) The voluntary disclosure agreement entered into by the Franchise Tax Board and the qualified entity, qualified shareholder, qualified member, qualified beneficiary, or qualified partner as provided for in subdivision (a) shall to the extent applicable specify that:

(1) The Franchise Tax Board shall with respect to a qualified entity, qualified shareholder, qualified member, qualified beneficiary, or qualified partner, except as provided in paragraph (4), (6), (9), or (11) of subdivision (a) of Section 19192:

(A) (i) Waive its authority under this part, Part 10 (commencing with Section 17001), or Part 11 (commencing with Section 23001) to assess or propose to assess taxes, additions to tax, fees, or penalties with respect to each taxable year ending prior to six years from the signing date of the voluntary disclosure agreement.

(ii) The waiver of authority to assess or propose to assess taxes, additions to tax, fees, or penalties under clause (i) with respect to the income of a trust for a taxable year ending prior to six years from the signing date of the voluntary disclosure agreement shall not prevent the taxation of income of a beneficiary of a trust pursuant to Section 17745.

(B) With respect to each of the six taxable years ending immediately preceding the signing date of the voluntary disclosure agreement, based on its discretion, agree to waive any or all of the following:

(i) A penalty related to a failure to make and file a return, as provided in Section 19131.

(ii) A penalty related to a failure to pay any amount due by the date prescribed for payment, as provided in Section 19132.

(iii) An addition to tax related to an underpayment of estimated tax, as provided in Section 19136.

(iv) A penalty related to Section 6810 or subdivision (a) of Section 8810 of the Corporations Code, as provided in Section 19141 of this code.

(v) A penalty related to a failure to furnish information or maintain records, as provided in Section 19141.5.

(vi) An addition to tax related to an underpayment of tax imposed under Part 11 (commencing with Section 23001), as provided in Section 19142.

(vii) A penalty related to a partnership required to file a return under Section 18633 or 18633.5, as provided in Section 19172.

(viii) A penalty related to an “S” corporation required to file a return under Section 18601, as provided in Section 19172.5.

(ix) A penalty related to a failure to file information returns, as provided in Section 19183.

(x) A penalty related to relief from contract voidability, as provided in Section 23305.1.

(2) The qualified entity, qualified shareholder, qualified member, qualified beneficiary, or qualified partner shall:

(A) With respect to each of the six taxable years ending immediately preceding the signing date of the written agreement:

(i) Voluntarily and fully disclose on the qualified entity’s application all material facts pertinent to the qualified entity’s, shareholder’s, member’s, beneficiary’s, or partner’s liability for any taxes imposed under Part 10 (commencing with Section 17001) or Part 11 (commencing with Section 23001).

(ii) Except as provided in paragraph (3), within 30 days from the signing date of the voluntary disclosure agreement:

(I) File all returns required under this part, Part 10 (commencing with Section 17001), or Part 11 (commencing with Section 23001).

(II) Pay in full any tax, interest, fee, and penalties, other than those penalties specifically waived by the Franchise Tax Board under the terms of the voluntary disclosure agreement, imposed under this part, Part 10 (commencing with Section 17001), or Part 11 (commencing with Section 23001) in a manner as may be prescribed by the Franchise Tax Board. Paragraph (1) of subdivision (f) of Section 23153 shall not apply to qualified entities admitted into the voluntary disclosure program.

(B) Agree to comply with all franchise and income tax laws of this state in subsequent taxable years by filing all returns required and paying all amounts due under this part, Part 10 (commencing with Section 17001), or Part 11 (commencing with Section 23001).

(3) The Franchise Tax Board may extend the time for filing returns and paying amounts due to 120 days from the signing date of the voluntary disclosure agreement or to the latest extended due date of the return for a taxable year for which relief is granted, whichever is later.

(e) An addition to tax under Section 19136 or 19142 shall not be made for any underpayment of estimated tax attributable to the underpayment of an installment of estimated tax due before the signing date of the voluntary disclosure agreement.

(f) The amendments to this section made by Chapter 954 of the Statutes of 1996 shall apply to taxable years beginning on or after January 1, 1997.

(g) The amendments to this section made by Chapter 543 of the Statutes of 2001 shall apply to voluntary disclosure agreements entered into on or after January 1, 2002.

(h) The amendments to this section made by Chapter 354 of the Statutes of 2004 shall apply to voluntary disclosure agreements entered into on or after January 1, 2005.

(i) The amendments to this section made by Chapter 296 of the Statutes of 2011 shall apply to voluntary disclosure agreements entered into on or after January 1, 2011.

(j) The amendments to this section made by the act adding this subdivision shall apply to voluntary disclosure agreements entered into on or after January 1, 2018.

history: (History: Amended by Stats. 2017, Ch. 288, Sec. 1. (SB 813) Effective January 1, 2018.)

article: 8. Voluntary Disclosure Program

path: 2. OTHER TAXES > 10.2. ADMINISTRATION OF FRANCHISE AND INCOME TAX LAWS > 4. Payments and Assessments > 8. Voluntary Disclosure Program


text:
For purposes of this article, the following terms have the following meanings:

(a) (1) “Qualified entity” means an entity that is all of the following:

(A) A corporation, as defined in Section 23038, a limited liability company, as defined in subdivision (d) of Section 17941, a qualified trust, as defined in paragraph (7), or a qualified partnership, as defined in paragraph (12).

(B) An entity, including any predecessors to the entity, that previously has never filed a return with the Franchise Tax Board pursuant to this part, Part 10 (commencing with Section 17001), or Part 11 (commencing with Section 23011).

(C) An entity, including any predecessors to the entity, that previously has not been the subject of an inquiry by the Franchise Tax Board with respect to liability for any of the taxes imposed under Part 10 (commencing with Section 17001) or Part 11 (commencing with Section 23001).

(D) An entity that voluntarily comes forward prior to any unilateral contact from the Franchise Tax Board, makes application for a voluntary disclosure agreement in a form and manner prescribed by the Franchise Tax Board, and makes a full and accurate statement of its activities in this state for the six immediately preceding taxable years.

(2) (A) Notwithstanding paragraph (1), a qualified entity does not include any of the following:

(i) An entity that is organized and existing under the laws of this state.

(ii) An entity that is qualified or registered with the office of the Secretary of State.

(iii) An entity that maintains and staffs a permanent facility in this state.

(B) For purposes of this paragraph, the storing of materials, goods, or products in a public warehouse pursuant to a public warehouse contract does not constitute maintaining a permanent facility in this state.

(3) “Qualified shareholder” means an individual that is all of the following:

(A) A nonresident on the signing date of the voluntary disclosure agreement.

(B) A shareholder of an “S” corporation (defined in Section 23800) that has applied for a voluntary disclosure agreement under this article under which all material facts pertinent to the shareholder’s liability would be disclosed on that “S” corporation’s voluntary disclosure agreement as required under clause (i) of subparagraph (A) of paragraph (2) of subdivision (d) of Section 19191.

(4) Notwithstanding paragraph (3), subparagraph (B) of paragraph (1) of subdivision (d) of Section 19191 shall not apply to any of the six taxable years immediately preceding the signing date that the qualified shareholder was a California resident required to file a California tax return, nor to any penalties or additions to tax attributable to income other than the California source income from the “S” corporation that filed an application under this article.

(5) “Qualified member” means an individual, corporation, or limited liability company that is all of the following:

(A) (i) In the case of an individual, is a nonresident on the signing date of the voluntary disclosure agreement.

(ii) In the case of a corporation or limited liability company, is not either of the following:

(I) Organized under the laws of this state.

(II) Qualified or registered with the office of the Secretary of State.

(B) A member of a limited liability company that has applied for a voluntary disclosure agreement under this article under which all material facts pertinent to the member’s liability would be disclosed on that limited liability company’s voluntary disclosure agreement as required under clause (i) of subparagraph (A) of paragraph (2) of subdivision (d) of Section 19191.

(6) Notwithstanding paragraph (5), in the case of a qualified member who is an individual, subparagraph (B) of paragraph (1) of subdivision (d) of Section 19191 shall not apply to any of the six taxable years immediately preceding the signing date that the qualified member was a California resident required to file a California tax return, nor to any penalties or additions to tax attributable to income other than the California source income from the limited liability company that filed an application under this article.

(7) “Qualified trust” means a trust, the administration of which has never been performed in California. For purposes of this paragraph, administrative activities performed in California would be deemed to be performed outside of California if those activities were inconsequential to the overall administration of the trust.

(8) “Qualified beneficiary” means an individual who is all of the following:

(A) A nonresident on the signing date of the voluntary disclosure agreement and a nonresident during each of the six taxable years ending immediately preceding the signing date of the voluntary disclosure agreement.

(B) A beneficiary with a contingent or noncontingent interest in the qualified trust. A beneficiary’s trust interest for a taxable year is not contingent if the trust has made any distribution to that beneficiary.

(C) A beneficiary of a qualified trust that has applied for a voluntary disclosure agreement under this article under which all material facts pertinent to the beneficiary’s liability would be disclosed on that trust’s voluntary disclosure agreement as required under clause (i) of subparagraph (A) of paragraph (2) of subdivision (d) of Section 19191.

(9) Notwithstanding paragraph (8), subparagraph (B) of paragraph (1) of subdivision (d) of Section 19191 shall not apply to any penalties or additions to tax attributable to income other than income from the trust that filed an application under this article.

(10) “Qualified partner” means an individual that is both of the following:

(A) A nonresident of this state as of the signing date of the voluntary disclosure agreement.

(B) A partner of a qualified partnership that has applied for a voluntary disclosure agreement under this article under which all material facts pertinent to the partner’s liability would be disclosed on the partnership’s voluntary disclosure agreement as required under clause (i) of subparagraph (A) of paragraph (2) of subdivision (d) of Section 19191.

(11) Notwithstanding paragraph (10), in the case of a qualified partner, subparagraph (B) of paragraph (1) of subdivision (d) of Section 19191 shall not apply to any of the six taxable years immediately preceding the signing date that the qualified partner was a California resident required to file a California tax return, nor to any penalties or additions to tax attributable to income other than the California source income from the partnership that filed an application under this article.

(12) “Qualified partnership” means a partnership, as defined in Section 17008, a limited partnership, as defined in subdivision (d) of Section 17935, or a limited liability partnership, within the meaning of Section 17948.

(b) “Signing date” of the voluntary disclosure agreement means the date on which a person duly authorized by the Franchise Tax Board signs the agreement.

(c) The amendments to this section made by Chapter 954 of the Statutes of 1996 shall apply to taxable years beginning on or after January 1, 1997.

(d) The amendments to this section made by Chapter 543 of the Statutes of 2001 shall apply to voluntary disclosure agreements entered into on or after January 1, 2002.

(e) The amendments to this section made by the act adding this subdivision shall apply to voluntary disclosure agreements entered into on or after January 1, 2005.

(f) The amendments to this section made by the act adding this subdivision shall apply to voluntary disclosure agreements entered into on or after January 1, 2018.

history: (History: Amended by Stats. 2017, Ch. 288, Sec. 2. (SB 813) Effective January 1, 2018.)

article: 8. Voluntary Disclosure Program


text: Nothing in this article shall be construed to mean that by accepting and signing a voluntary disclosure agreement the Franchise Tax Board abdicates the right and authority to examine returns and determine the correct amount of tax for any of the taxable years covered by the voluntary disclosure period agreed upon and to assess any additional tax, penalty, or interest owed as a result of that examination.

history: (History: Amended by Stats. 2000, Ch. 862, Sec. 32. Effective January 1, 2001.)

article: 8. Voluntary Disclosure Program


text:
(a) Notwithstanding any other provision of this article, a voluntary disclosure agreement shall be null and void in the event that the Franchise Tax Board finds that with respect to the agreement any of the following circumstances exist:

(1) The qualified entity has misrepresented any material fact in applying for the voluntary disclosure agreement or in entering into the agreement.

(2) The qualified entity fails to file any returns for any taxable year covered by the voluntary disclosure period agreed upon on or before the due date prescribed under the terms of the agreement in accordance with paragraph (2) of subdivision (d) of Section 19191.

(3) (A) The qualified entity fails to pay in full any tax, fee, penalty, or interest due within the time prescribed under the terms of the voluntary disclosure agreement in accordance with paragraph (2) of subdivision (d) of Section 19191 or to pay any installments thereof due within the time prescribed under the terms of an installment payment arrangement in accordance with subparagraph (B).

(B) The Franchise Tax Board may enter into an installment payment arrangement, which shall include provisions for interest, in lieu of the full payment required under paragraph (2) of subdivision (d) of Section 19191. Failure by the qualified entity to comply with the terms of the installment payment arrangement shall also render the voluntary disclosure agreement null and void.

(C) Notwithstanding subparagraphs (A) and (B), an applicant applying for an installment payment arrangement shall have the same time periods as identified in paragraphs (1) and (2) of subdivision (d) of Section 19008 to pay in full any tax, fee, penalty, or interest due.

(4) The tax shown by the qualified entity on its tax return filed for any taxable year covered by the voluntary disclosure agreement, including any amount shown on a qualified amended return, as defined in Section 1.6664-2(c)(3) of Title 26 of the Code of Federal Regulations, understates by 10 percent or more the tax imposed under either Part 10 (commencing with Section 17001) or Part 11 (commencing with Section 23001) and the qualified entity cannot demonstrate to the satisfaction of the Franchise Tax Board that a good faith effort was made to accurately compute the tax.

(5) The qualified entity fails to begin to prospectively comply with all franchise and income tax laws of this state as agreed upon under the terms of the voluntary disclosure agreement in accordance with paragraph (2) of subdivision (d) of Section 19191.

(b) In the event that the Franchise Tax Board finds that the qualified entity has failed to comply under any of the circumstances which render the voluntary disclosure agreement null and void as set forth in subdivision (a), the limitation on assessment for any taxable years and the waiver of any penalties as provided for in paragraph (1) of subdivision (d) and subdivision (h) of Section 19191 shall not be binding on the Franchise Tax Board.

(c) The amendments to this section made by the act adding this subdivision shall apply to voluntary disclosure agreements entered into on or after January 1, 2011.

history: (History: Amended by Stats. 2011, Ch. 296, Sec. 280. (AB 1023) Effective January 1, 2012.)

article: 8. Voluntary Disclosure Program


text:
(a) Notwithstanding any other provision of law, including Section 7920.500 and Article 3 (commencing with Section 7928.200) of Chapter 14 of Part 5 of Division 10 of Title 1 of the Government Code, the Franchise Tax Board shall make available as a matter of public record at least twice each calendar year a list of the 500 largest tax delinquencies in excess of one hundred thousand dollars ($100,000) under Part 10 and Part 11 of this division. For purposes of compiling the list, a tax delinquency means the total amount owed by a taxpayer to the State of California for which a notice of state tax lien has been recorded in any county recorder’s office in this state, pursuant to Chapter 14 (commencing with Section 7150) of Division 7 of Title 1 of the Government Code.

(b) For purposes of the list, a tax delinquency does not include any of the following and may not be included on the list:

(1) A delinquency for which payment arrangements have been agreed to by both the taxpayer and the Franchise Tax Board and the taxpayer is in compliance with the arrangement.

(2) A delinquency for which the taxpayer has filed for bankruptcy protection pursuant to Title 11 of the United States Code.

(3) A delinquency for which the person or persons liable for the tax have contacted the Franchise Tax Board and for which resolution of the tax delinquency has been accepted by the Franchise Tax Board.

(c) Each list shall, with respect to each delinquency, include all the following:

(1) The name of the person or persons liable for payment of the tax and that person’s or persons’ address.

(2) The amount of tax delinquency as shown on the notice or notices of state tax lien and any applicable interest or penalties, less any amounts paid.

(3) The earliest date that a notice of state tax lien was filed.

(4) The type of tax that is delinquent.

(5) The type, status, and license number of any occupational or professional license held by the person or persons liable for payment of the tax.

(6) The names and titles of the principal officers of the person liable for payment of the tax if that person is a limited liability company or corporation. The Franchise Tax Board shall refer to the limited liability company’s or the corporation’s Statement of Information filed with the Secretary of State or to the limited liability company’s or the corporation’s tax return filed pursuant to this part to determine the principal officers of the limited liability company or corporation. Principal officers appearing on a list solely pursuant to this paragraph shall not be subject to Section 494.5 of the Business and Professions Code, or Section 10295.4 of the Public Contract Code.

(d) Prior to making a tax delinquency a matter of public record as required by this section, the Franchise Tax Board shall provide a preliminary written notice to the person or persons liable for the tax by certified mail, return receipt requested. If within 30 days after issuance of the notice, the person or persons do not remit the amount due or make arrangements with the Franchise Tax Board for payment of the amount due, the tax delinquency shall be included on the list.

(e) The list described in subdivision (a) shall include the following:

(1) The telephone number and address of the Franchise Tax Board office to contact if a person believes placement of the person’s name on the list is in error.

(2) The aggregate number of persons that have appeared on the list who have satisfied their delinquencies in their entirety and the dollar amounts, in the aggregate, that have been paid attributable to those delinquencies.

(f) As promptly as feasible, but no later than five business days from the occurrence of any of the following, the Franchise Tax Board shall remove that taxpayer’s name from the list of tax delinquencies:

(1) Tax delinquencies for which the person liable for the tax has contacted the Franchise Tax Board and resolution of the delinquency has been arranged.

(2) Tax delinquencies for which the Franchise Tax Board has verified that an active bankruptcy proceeding has been initiated.

(3) Tax delinquencies for which the Franchise Tax Board has verified that a bankruptcy proceeding has been completed and there are no assets available with which to pay the delinquent amount or amounts.

(4) Tax delinquencies that the Franchise Tax Board has determined to be uncollectible.

(g) A person whose delinquency appears on the list, and who satisfies that delinquency in whole or in part, may request the Franchise Tax Board to include in its list any payments that person made to satisfy the delinquency. Upon receipt of that request, the Franchise Tax Board shall include those payments on the list as promptly as feasible.

(h) Notwithstanding subdivision (a), a person whose delinquency appeared on the list and whose name has been removed pursuant to paragraph (1) of subdivision (f) shall comply with the terms of the arranged resolution. If the person fails to do so, the Franchise Tax Board may add that person’s name to the list of delinquencies without providing the prior written notice otherwise required by subdivision (d).

history: (History: Amended by Stats. 2021, Ch. 615, Sec. 418. (AB 474) Effective January 1, 2022. Operative January 1, 2023, pursuant to Sec. 463 of Stats. 2021, Ch. 615.)

path: 2. OTHER TAXES > 10.2. ADMINISTRATION OF FRANCHISE AND INCOME TAX LAWS > 4. Payments and Assessments > 9. Public Disclosure of Tax Delinquencies


text: If any amount due under Part 10 (commencing with Section 17001), Part 11 (commencing with Section 23001), or any amount that may be collected by the Franchise Tax Board as though it were a tax, is not paid, the Franchise Tax Board may file in the Office of the Clerk of the Court of Sacramento County, or any other county, a certificate specifying the amount due, the name and last known address of the taxpayer liable for the amount due, and the fact that the Franchise Tax Board has complied with all provisions of the law in the computation and levy of the amount due, and a request that judgment be entered against the taxpayer in the amount set forth in the certificate.

history: (History: Amended by Stats. 2016, Ch. 366, Sec. 24. (SB 974) Effective January 1, 2017.)

chapter: 5. Collection of Tax

article: 1. Judgment for Tax

path: 2. OTHER TAXES > 10.2. ADMINISTRATION OF FRANCHISE AND INCOME TAX LAWS > 5. Collection of Tax > 1. Judgment for Tax


text: The clerk of the court immediately upon the filing of the certificate shall enter a judgment for the people of the State of California against the taxpayer in the amount set forth in the certificate. The clerk of the court may file the judgment in a loose-leaf book entitled “Personal Income Tax Judgments” or “Bank and Corporation Tax Judgments,” as appropriate.

history: (History: Amended by Stats. 2016, Ch. 366, Sec. 25. (SB 974) Effective January 1, 2017.)

article: 1. Judgment for Tax


text: An abstract or a copy of the judgment may be recorded with the county recorder of any county. From the time of the recording, the amount set forth constitutes a lien upon all real property of the taxpayer in the county, owned by the taxpayer or afterward and before the lien expires acquired by the taxpayer. Such lien has the force, effect, and priority of a judgment lien and continues for 10 years from the date of the recording unless sooner released or otherwise discharged.

article: 1. Judgment for Tax


text: Within 10 years from the date of the recording or within 10 years from the date of the last extension of the lien in the manner provided in this section, the lien may be extended by recording in the office of the county recorder of any county an abstract or copy of the judgment. From the time of the recording the lien extends to the property in the county for 10 years unless sooner released or otherwise discharged.

article: 1. Judgment for Tax


text: Execution shall issue upon the judgment upon request of the Franchise Tax Board in the same manner as execution may issue upon other judgments, and sales shall be held under the execution as prescribed in the Code of Civil Procedure.

article: 1. Judgment for Tax


text: The Franchise Tax Board may, at any time, release all or any portion of the property subject to any lien provided for in this article from the lien or subordinate the lien to other liens if it determines that the taxes are sufficiently secured by a lien on other property of the taxpayer or that the release or subordination of the lien will not endanger or jeopardize the collection of the taxes.

article: 1. Judgment for Tax


text: The Franchise Tax Board may release any lien imposed under Section 19203 or 19204 if it finds that the liability represented by the lien, including any interest accrued thereon, is legally unenforceable.

article: 1. Judgment for Tax


text: A certificate by the Franchise Tax Board to the effect that any property has been released from a lien or that the lien has been subordinated to other liens is conclusive evidence that the property has been released or that the lien has been subordinated as provided in the certificate.

article: 1. Judgment for Tax


text: If the Franchise Tax Board records a certificate of release pursuant to Section 19206 or 19207, the cost of recording is an obligation of the taxpayer and may be collected from the taxpayer in any manner provided in this part for the collection of the tax.

article: 1. Judgment for Tax


text:
(a) If any taxpayer or person fails to pay any liability imposed under Part 10 (commencing with Section 17001) or Part 11 (commencing with Section 23001) at the time that it becomes due and payable, the amount thereof, (including any interest, additional amount, addition to tax, or penalty, together with any costs that may accrue in addition thereto) shall thereupon be a perfected and enforceable state tax lien. This lien is subject to Chapter 14 (commencing with Section 7150) of Division 7 of Title 1 of the Government Code.

(b) For the purpose of this section, amounts are “due and payable” on the following dates:

(1) For amounts of any liability disclosed on a return filed on or before the date payment is due (with regard to any extension of time to pay), the date the amount is established on the records of the Franchise Tax Board, except that in no case will it be prior to the day after the payment due date;

(2) For amounts of any liability disclosed on a return filed after the date payment is due (with regard to any extension of time to pay), the date the amount is established on the records of the Franchise Tax Board;

(3) For amounts of any liability determined under Section 19081 or 19082 (pertaining to jeopardy assessments), the date the notice of the Franchise Tax Board’s finding is mailed or issued;

(4) For all other amounts of liability, the date the assessment is final.

(c) Notwithstanding subdivision (a), during any period that Section 362 of Title 11 of the United States Code applies, any tax lien that would otherwise attach to property by reason of subdivision (a) shall not take effect, unless the tax is a debt of the debtor that will not be discharged in the bankruptcy proceeding and the property or its proceeds are transferred out of the bankruptcy estate to, or otherwise revested in, the debtor.

history: (History: Amended by Stats. 1995, Ch. 69, Sec. 1. Effective January 1, 1996.)

article: 2. Lien of Tax

path: 2. OTHER TAXES > 10.2. ADMINISTRATION OF FRANCHISE AND INCOME TAX LAWS > 5. Collection of Tax > 2. Lien of Tax


text: For the purposes of this section, if any certified, treasurer's, or cashier’s check (or other guaranteed draft), or any money order received in payment of any liability imposed under Part 10 (commencing with Section 17001), Part 11 (commencing with Section 23001), or this part is not duly paid, the state shall, in addition to its right to exact payment from the party originally indebted therefor, have a perfected and enforceable state tax lien for the amount of that check (or draft) upon all the assets of the financial institution on which drawn or for the amount of that money order upon all the assets of the issuer thereof. The lien referred to in the preceding sentence shall be subject to Chapter 14 (commencing with Section 7150) of Division 7 of Title 1 of the Government Code.

article: 2. Lien of Tax


text: Upon recordation or filing of a notice of state tax lien pursuant to Section 7171 of the Government Code by the Franchise Tax Board for any taxes due from the grantor of a trust on income of the trust which is taxable to the grantor under Part 10 (commencing with Section 17001), and upon its giving notice of the recording or filing pursuant to Section 7171 of the Government Code to the fiduciary of the trust, or in case there is more than one fiduciary to any one of the fiduciaries, the amount of the taxes constitutes a lien upon all the real or personal property of the trust in the county owned by the trust or afterwards and before the lien expires acquired by the trust. The lien has the force, effect, and priority of a lien created pursuant to Section 19221.

article: 2. Lien of Tax


text: The notice required to be given by Section 19223 may be served upon the fiduciary personally, or by mail; if by mail, service shall be made pursuant to Section 1013 of the Code of Civil Procedure and shall be addressed to the fiduciary at his or her address as it appears in the records of the Franchise Tax Board.

article: 2. Lien of Tax


text:
(a) (1) The Franchise Tax Board shall notify in writing the person described in Section 19221 of the filing or recording of a notice of state tax lien as provided under Chapter 14 (commencing with Section 7150) or Chapter 14.5 (commencing with Section 7220) of Division 7 of Title 1 of the Government Code.

(2) The notice required under paragraph (1) shall be mailed in accordance with Section 2885 of the Civil Code no less than five business days after the day of the filing of the notice of lien.

(3) The notice shall specify, in simple and nontechnical terms, all of the following:

(A) The amount of unpaid tax.

(B) The right of the person to request a review during the 15-day period beginning on the day after the five-day period described in paragraph (2).

(C) The independent departmental administrative review available to the taxpayer with respect to the lien and the procedures to obtain that review.

(D) The procedures relating to the release of liens on property.

(b) (1) The Taxpayers’ Rights Advocate shall establish procedures for an independent departmental administrative review requested under subparagraph (C) of paragraph (3) of subdivision (a).

(2) A person shall be entitled to only one review under this section with respect to the taxable period to which the unpaid tax specified in subparagraph (A) of paragraph (3) of subdivision (a) relates.

(3) An independent departmental administrative review under this subdivision shall be conducted by an officer or employee, or officers or employees, who have had no prior involvement with respect to the unpaid tax specified in subparagraph (A) of paragraph (3) of subdivision (a) before the first review under this section or Section 21015.5. A taxpayer may waive the requirement of this paragraph. Administrative review under this paragraph is not subject to Chapter 4.5 (commencing with Section 11400) of Part 1 of Division 3 of the Government Code.

(4) To the extent practicable, a review under this section shall be held in conjunction with a review under Section 21015.5.

(c) For purposes of this section, subdivision (c) of Section 21015.5 shall apply.

(d) This section is operative for any collection action initiated after the date which is 180 days after the effective date of the act adding this section.

history: (History: Added by Stats. 1999, Ch. 348, Sec. 1. Effective January 1, 2000. Applicable as provided in subd. (d).)

article: 2. Lien of Tax


text:
(a) At the request of the owner whose property is subject to any lien under Section 19221, the Franchise Tax Board shall issue a release of lien from that property if the owner is not the person whose unsatisfied liability gave rise to the lien and the owner does either of the following:

(1) Deposits with the Franchise Tax Board an amount of money equal to the value of the interest of the state (as determined by the Franchise Tax Board) in the property.

(2) Furnishes a bond acceptable to the Franchise Tax Board in a like amount.

(b) The Franchise Tax Board shall refund the amount so deposited, pay interest at the overpayment rate under Section 19521, and release the bond, to the extent the Franchise Tax Board determines that either of the following apply:

(1) The unsatisfied liability giving rise to the lien can be satisfied from a source other than the property for which the deposit or bond is made.

(2) The value of the interest of the state in the property is less than the Franchise Tax Board’s prior determination of the value.

(c) If no request is made under subdivision (d), within the period prescribed, the Franchise Tax Board shall do both of the following within 60 days after the expiration of the period:

(1) Apply the amount deposited or collected on the bond, to the extent necessary to satisfy the unsatisfied liability secured by the lien.

(2) Refund (with interest at the overpayment rate under Section 19521) any portion of the amount deposited which is not used to satisfy the liability.

(d) If a release is issued pursuant to this section, the owner may, within 60 days after the day on which the release is issued, request the Franchise Tax Board as provided under subdivision (f) to determine whether the value of the interest of the state (if any) is less than the Franchise Tax Board’s prior determination of the value. No other action may be brought by the owner for a determination.

(e) This section shall not limit the circumstances in which the Franchise Tax Board may release a lien under any circumstances to facilitate the collection of the tax liability or, if that release is in the best interest of the taxpayer and the state, take any action associated with the release of that lien it deems appropriate.

(f) The Taxpayers’ Rights Advocate shall establish procedures for an independent departmental administrative review for requests made under subdivision (d). 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. If the administrative review determines that the Franchise Tax Board’s previous determination of the value of the interest of the state in the property for purposes of this section exceeds the actual value of the state’s interest, the board shall provide a refund of the amount deposited and a release of the bond, to the extent that the aggregate of the amounts thereof exceeds the value so determined. In the case of a refund issued pursuant to this subdivision, interest shall be allowed at the rate prescribed for overpayments from the date the Franchise Tax Board receives the amount to the date of refund.

(g) This section shall be operative on the effective date of the act adding this section.

history: (History: Added by Stats. 1999, Ch. 931, Sec. 21. Effective October 10, 1999.)

article: 2. Lien of Tax


text: The Franchise Tax Board or its authorized representative may issue a warrant for the collection of any tax, interest, or penalty and for the enforcement of any lien.

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. Warrant for Collection of Tax

path: 2. OTHER TAXES > 10.2. ADMINISTRATION OF FRANCHISE AND INCOME TAX LAWS > 5. Collection of Tax > 3. Warrant for Collection of Tax


text: The warrant shall be directed to any sheriff, marshal, or the Department of the California Highway Patrol and shall have the same force and effect as a writ of execution. The warrant shall be levied and sale made pursuant to it in the same manner and with the same force and effect as a levy of and sale pursuant to a writ of execution.

history: (History: Amended by Stats. 1998, Ch. 931, Sec. 448. Effective September 28, 1998.)

article: 3. Warrant for Collection of Tax


text: The Franchise Tax Board shall pay or advance to the sheriff, marshal, or the Department of the California Highway Patrol the same fees, commissions, and expenses as are provided by law for similar services pursuant to a writ of execution. The Franchise Tax Board, and not the court, shall approve the fees for publication in a newspaper.

history: (History: Amended by Stats. 1998, Ch. 931, Sec. 449. Effective September 28, 1998.)

article: 3. Warrant for Collection of Tax


text: The fees, commissions, and expenses are an obligation of the taxpayer and may be collected from the taxpayer by virtue of the warrant or in any other manner provided in this part for the collection of a tax.

article: 3. Warrant for Collection of Tax


text: Whenever property is levied upon by warrant pursuant to Section 19231, the reasonable costs associated with the sale of that property, including, but not limited to, appraisers’ fees, auctioneers’ fees, and advertising fees are an obligation of the taxpayer and may be collected from the taxpayer by virtue of the warrant or in any other manner provided in this part for the collection of tax.

article: 3. Warrant for Collection of Tax


text:
For purposes of issuing a warrant pursuant to this article:

(a) (1) No levy may be issued on any property or right to property to be sold in accordance with the Code of Civil Procedure until a thorough investigation of the status of the property has been completed by the Franchise Tax Board.

(2) For purposes of paragraph (1), an investigation of the status of any property shall include all of the following:

(A) A verification of the taxpayer’s liability.

(B) The completion of an analysis to determine whether the expense of the sale process to the state exceeds the liability for which the levy would be issued.

(C) The determination that the equity in the property is sufficient to yield net proceeds from the sale of the property to apply to the liability.

(D) A thorough consideration of alternative collection methods.

(b) If the amount of the levy does not exceed five thousand dollars ($5,000), no levy may be issued on either of the following:

(1) Any real property used as a residence by the taxpayer.

(2) Any real property of the taxpayer (other than real property which is rented) used by any other individual as a residence.

(c) Notwithstanding the investigation required under subdivision (a):

(1) The principal residence of the taxpayer may not be sold except in accordance with Article 4 (commencing with Section 704.710) of Chapter 4 of Division 2 of Title 9 of the Code of Civil Procedure, which requires a court order for sale.

(2) Tangible personal property or real property (other than real property which is rented or a principal residence) used in the trade or business of an individual taxpayer may not be levied unless:

(A) The levy is approved in writing by the assistant executive officer for collection (or delegate), or

(B) The Franchise Tax Board finds that collection of tax is in jeopardy. The officer, or delegate, may not approve a levy under subparagraph (A) unless the officer determines that the taxpayer’s other assets subject to collection are insufficient to pay the amount due, together with expenses of the proceedings.

(d) This section shall be operative for any warrant issued on or after the effective date of the act adding this section.

history: (History: Amended by Stats. 2000, Ch. 647, Sec. 17. Effective January 1, 2001.)

article: 3. Warrant for Collection of Tax


text: The remedies of the state provided for in this chapter are cumulative, and no action taken by the Franchise Tax Board constitutes an election by the state to pursue any remedy to the exclusion of any other remedy for which provision is made in this part.

article: 4. Miscellaneous Provisions

path: 2. OTHER TAXES > 10.2. ADMINISTRATION OF FRANCHISE AND INCOME TAX LAWS > 5. Collection of Tax > 4. Miscellaneous Provisions


text: In all proceedings under this chapter the Franchise Tax Board may act on behalf of the people of the State of California.

article: 4. Miscellaneous Provisions


text:
The amounts required to be paid by any person under this part together with interest and penalties shall be satisfied first in any of the following cases:

(a) Whenever the person is insolvent.

(b) Whenever the person makes a voluntary assignment of assets.

(c) Whenever the estate of the person in the hands of executors, administrators, or heirs is insufficient to pay all the debts due from the deceased.

(d) Whenever the estate and effects of an absconding, concealed, or absent person required to pay any amount under this part are levied upon by process of law.

This section does not give the state a preference over any lien or security interest which was recorded or perfected prior to the time when the state records or files its lien as provided in Section 7171 of the Government Code.

The preference given to the state by this section shall be subordinate to the preferences given to claims for personal services by Sections 1204 and 1206 of the Code of Civil Procedure.

article: 4. Miscellaneous Provisions


text:
(a) (1) If any person, other than an organization exempt from taxation under Section 23701, fails to pay any amount of tax, penalty, addition to tax, interest, or other liability imposed and delinquent under Part 10 (commencing with Section 17001), Part 11 (commencing with Section 23001), Part 32 (commencing with Section 61000), Title 25 (commencing with Section 100800) of the Government Code, or this part, a collection cost recovery fee shall be imposed if the Franchise Tax Board has mailed notice to that person for payment that advises that continued failure to pay the amount due may result in collection action, including the imposition of a collection cost recovery fee. The collection cost recovery fee shall be in the amount of:

(A) In the case of an individual, partnership, limited liability company classified as a partnership for California income tax purposes, or fiduciary, eighty-eight dollars ($88) or an amount as adjusted under subdivision (b).

(B) In the case of a corporation or limited liability company classified as a corporation for California income tax purposes, one hundred sixty-six dollars ($166) or an amount as adjusted under subdivision (b).

(2) If any person, other than an organization exempt from taxation under Section 23701, fails or refuses to make and file a tax return required by Part 10 (commencing with Section 17001), Part 11 (commencing with Section 23001), or this part, within 25 days after formal legal demand to file the tax return is mailed to that person by the Franchise Tax Board, the Franchise Tax Board shall impose a filing enforcement cost recovery fee in the amount of:

(A) In the case of an individual, partnership, limited liability company classified as a partnership for California income tax purposes, or fiduciary, fifty-one dollars ($51) or an amount as adjusted under subdivision (b).

(B) In the case of a corporation or limited liability company classified as a corporation for California income tax purposes, one hundred nineteen dollars ($119) or an amount as adjusted under subdivision (b).

(b) For fees imposed under this section during the fiscal year 1993–94 and fiscal years thereafter, the amount of those fees shall be set to reflect actual costs and shall be specified in the annual Budget Act.

(c) Interest shall not accrue with respect to the cost recovery fees provided by this section.

(d) The amounts provided by this section are obligations imposed by this part and may be collected in any manner provided under this part for the collection of a tax.

(e) Subdivision (a) is operative with respect to the notices for payment or formal legal demands to file, either of which is mailed on or after September 15, 1992.

(f) The Franchise Tax Board shall determine the total amount of the cost recovery fees collected or accrued through June 30, 1993, and shall notify the Controller of that amount. The Controller shall transfer that amount to the Franchise Tax Board, and that amount is hereby appropriated to the board for the 1992–93 fiscal year for reimbursement of its collection and filing enforcement efforts.

history: (History: Amended by Stats. 2019, Ch. 38, Sec. 37. (SB 78) Effective June 27, 2019.)

article: 4. Miscellaneous Provisions


text:
(a) Except as otherwise provided in subdivisions (b) and (e), after 20 years have lapsed from the date the latest tax liability for a taxable year or the date any other liability that is not associated with a taxable year becomes “due and payable” within the meaning of Section 19221, the Franchise Tax Board may not collect that amount and the taxpayer’s liability to the state for that liability is abated by reason of lapse of time. Any actions taken by the Franchise Tax Board to collect an uncollectible liability shall be released, withdrawn, or otherwise terminated by the Franchise Tax Board, and no subsequent administrative or civil action shall be taken or brought to collect all or part of that uncollectible amount. Any amounts received in contravention of this section shall be considered an overpayment that may be credited and refunded in accordance with Article 1 (commencing with Section 19301) of Chapter 6.

(b) If a timely civil action filed pursuant to Article 2 of Chapter 6 of this part is commenced, or a claim is filed in a probate action, the period for which the liability is collectable shall be extended and shall not expire until that liability, probate claim, or judgment against the taxpayer arising from that liability is satisfied or becomes unenforceable under the laws applicable to the enforcement of civil judgments.

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

(1) “Tax liability” means a liability imposed under Part 10 (commencing with Section 17001), Part 11 (commencing with Section 23001), or this part, and includes any additions to tax, interest, penalties, fees and any other amounts relating to the imposed liability.

(2) If more than one liability is “due and payable” for a particular taxable year, with the exception of a liability resulting from a penalty imposed under Section 19777.5, the “due and payable” date that is later in time shall be the date upon which the 20-year limitation of subdivision (a) commences.

(d) This section does not apply to amounts subject to collection by the Franchise Tax Board pursuant to Article 5.5 or 7 of this chapter, or any other amount that is not a tax imposed under Part 10 or Part 11, but which the Franchise Tax Board is collecting as though it were a final personal income tax delinquency.

(e) (1) The expiration of the period of limitation on collection under this section shall be suspended for the following periods:

(A) The period during which the Franchise Tax Board is prohibited by reason of a bankruptcy case from collecting, plus six months thereafter.

(B) The period described under subdivision (d) of Section 19008 relating to installment payment agreements.

(C) The period during which collection is postponed by operation of law under Section 18571, related to postponement by reason of service in a combat zone, or under Section 18572, related to postponement by reason of presidentially declared disaster or terroristic or military action.

(D) During any other period during which collection of a tax is suspended, postponed, or extended by operation of law.

(2) A suspension of the period of limitation under this subdivision applies with respect to both parties of any liability that is joint and several.

(f) This section shall be applied on and after July 1, 2006, to any liability “due and payable” before, on, or after that date.

history: (History: Amended by Stats. 2016, Ch. 86, Sec. 286. (SB 1171) Effective January 1, 2017.)

article: 4. Miscellaneous Provisions


text: The Franchise Tax Board may, in the allowance of any amount as a credit or refund, or in the collection of any amount as a deficiency or underpayment, of any tax imposed by Part 10 (commencing with Section 17001) or Part 11 (commencing with Section 23001), disregard a fractional part of a dollar unless it amounts to fifty cents ($0.50) or more, in which case it shall be increased to one dollar ($1).

article: 4. Miscellaneous Provisions


text:
(a) At any time within which an action can be brought to collect any delinquent amounts as provided in Article 2 (commencing with Section 19371) of Chapter 6, the Franchise Tax Board may collect the tax, together with penalties and interest, in the following manner: The Franchise Tax Board shall seize any personal property owned by the taxpayer against whom the tax is assessed, and thereafter sell at public auction the property so seized, or a sufficient portion thereof, to pay the tax due hereunder, together with any interest, and any penalty or penalties imposed hereby for that delinquency, and any and all costs that may have been incurred on account of the seizure and sale. Notice of the intended sale and the time and place thereof, shall be given to the delinquent taxpayer and to all persons appearing of record to have an interest in the property, in writing, at least 10 days before the date set for the sale by enclosing the notice in an envelope addressed to the taxpayer at its last known place of business in this state if any, and, in the case of any person appearing of record to have an interest in the property, addressed to that person at the last known place of residence, if any, and depositing the same in the United States mail, postage prepaid, and by publication for at least 10 days before the date set for the sale in a newspaper of general circulation published in the county in which the property seized is to be sold; provided, however, that if there be no newspaper of general circulation in that county then by the posting of the notice in three public places in the county for the 10-day period. The notice shall contain a description of the property to be sold, together with a statement of the amount of the taxes, interest, penalties, and costs, the name of the taxpayer, and the further statement that, unless the taxes, interest, penalties, and costs are paid on or before the time fixed in the notice for the sale, the property, or so much thereof as may be necessary, will be sold in accordance with law and the notice.

(b) For purposes of this section, the term tax shall include any liability imposed pursuant to Article 7 (commencing with Section 19131) of Chapter 4, and any interest imposed thereon.

article: 4. Miscellaneous Provisions


text:
At any sale authorized by Section 19262, the property shall be sold by the Franchise Tax Board or its duly authorized agent in accordance with law and the notice of sale, and the Franchise Tax Board shall deliver to the purchaser a bill of sale for the property so sold and the bill of sale shall vest title in the purchaser. The unsold portion of any property so seized may be left at the place of sale at the risk of the taxpayer. If, upon any sale, the moneys so received exceed the amount of all taxes, interest, penalties and costs due the state from the taxpayer, any excess shall be returned to the taxpayer and a receipt therefor obtained. However, if any person having an interest in or lien upon the property has filed with the Franchise Tax Board prior to any sale notice of the interest or lien, the Franchise Tax Board shall withhold any excess pending a determination of the rights of the respective parties thereto by a court of competent jurisdiction.

If, for any reason, the receipt of the taxpayer is not available, the Franchise Tax Board shall deposit the excess moneys with the Treasurer, as trustee for the owner, subject to the order of the taxpayer or his or her trust or estate, or in the case of a corporation, its successor through reorganization, merger, or consolidation, or its stockholders upon dissolution.

history: (History: Amended by Stats. 1997, Ch. 605, Sec. 31. Effective January 1, 1998.)

article: 4. Miscellaneous Provisions


text:
(a) Notwithstanding Sections 706.071, 706.073, 706.080, 706.101, and 706.105 of the Code of Civil Procedure, the Franchise Tax Board may serve earnings withholding orders for taxes and any other notice or document required to be served or provided in connection with an earnings withholding order for taxes pursuant to Article 4 (commencing with Section 706.070) of Chapter 5 of Division 2 of Title 9 of Part 2 of the Code of Civil Procedure to government and private employers by electronic transmission or other electronic technology.

(b) Upon consent of the employer, the Franchise Tax Board may provide service by electronic transmission or other electronic technology under this section.

(c) Notwithstanding Sections 706.071, 706.073, 706.080, 706.101, 706.125, and 706.126 of the Code of Civil Procedure, the Franchise Tax Board may receive the “employer’s return,” as described in Section 706.126 of the Code of Civil Procedure, by electronic transmission or other electronic technology.

(d) This section shall apply in the same manner and with the same force and effect and to the full extent as if this section had been incorporated in full into Article 4 (commencing with Section 706.070) of Chapter 5 of Division 2 of Title 9 of Part 2 of the Code of Civil Procedure.

(e) This section shall apply to notices served or provided on or after the effective date of the act adding this section.

history: (History: Repealed and added by Stats. 2020, Ch. 297, Sec. 3. (AB 3372) Effective January 1, 2021.)

article: 4. Miscellaneous Provisions


text:
(a) Notwithstanding Section 18670 or 18671, payments authorized pursuant to Section 8161 of the Welfare and Institutions Code shall not be subject to withholding or levy for liabilities due under Section 10878, Part 10 (commencing with Section 17001), Part 11 (commencing with Section 23001), or this part.

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

history: (History: Added by Stats. 2022, Ch. 51, Sec. 3. (AB 192) Effective June 30, 2022. Repealed as of January 1, 2027, by its own provisions.)

article: 4. Miscellaneous Provisions


text:
(a) (1) The Franchise Tax Board, in coordination with financial institutions doing business in this state, shall operate a Financial Institution Record Match System utilizing automated data exchanges to the maximum extent feasible.

(2) The Franchise Tax Board shall prescribe any rules and regulations that may be necessary or appropriate to implement this section. These rules and regulations shall include all of the following:

(A) A structure by which financial institutions, or their designated data-processing agents, shall receive from the Franchise Tax Board the file or files of delinquent debtors that the institution shall match with its own list of accountholders to identify delinquent tax debtor accountholders at the institution.

(B) An option by which financial institutions without the technical ability to process the data exchange, or without the ability to employ a third-party data processor to process the data exchange, may forward to the Franchise Tax Board a list of all accountholders and their social security numbers or other taxpayer identification numbers, so that the Franchise Tax Board shall match that list with the file or files of delinquent tax debtors.

(C) Authority for the Franchise Tax Board to exempt a financial institution from the requirements of this section if the Franchise Tax Board determines that the financial institution participation would not generate sufficient revenue to be cost effective for the Franchise Tax Board.

(D) Authority for the Franchise Tax Board to temporarily suspend the requirements of this section for a financial institution if the financial institution provides the Franchise Tax Board with a written notice from its supervisory banking authority that it is determined to be undercapitalized, significantly undercapitalized, or critically undercapitalized as defined by FDIC Regulation 325.103(b)(3), (4), and (5) or NCUA Regulation 702.102. The notice provided pursuant to this subparagraph shall be subject to the protections of Section 19542.

(b) The Financial Institution Record Match System shall not be subject to any limitation set forth in Chapter 20 (commencing with Section 7460) of Division 7 of Title 1 of the Government Code. However, any use of the information, other than information relating to an address, provided pursuant to this section for any purpose other than the collection of amounts identified in paragraphs (1), (2), and (3) shall be a violation of Section 19542.

(1) Delinquent amounts due the board, as imposed under Part 1 (commencing with Section 6001), Part 1.5 (commencing with Section 7200), Part 1.6 (commencing with Section 7251), Part 1.7 (commencing with Section 7280), Part 3 (commencing with Section 8601), Part 3.5 (commencing with Section 9401), Part 6 (commencing with Section 11201), Part 13 (commencing with Section 30001), Part 14 (commencing with Section 32001), Part 18.5 (commencing with Section 38101), Part 19 (commencing with Section 40001), Part 20 (commencing with Section 41001), Part 22 (commencing with Section 43001), Part 22.5 (commencing with Section 44000), Part 23 (commencing with Section 45001), Part 24 (commencing with Section 46001), Part 26 (commencing with Section 50101), Part 30 (commencing with Section 55001), or Part 31 (commencing with Section 60001).

(2) Delinquent amounts due the Employment Development Department, as imposed under the Unemployment Insurance Code, or other debts or penalty assessments referred to the Employment Development Department for collection.

(3) Delinquent franchise or income tax or other debts referred to the Franchise Tax Board for collection, as imposed under Part 5 (commencing with Section 10701), Part 10 (commencing with Section 17001), this part, or Part 11 (commencing with Section 23001).

(c) (1) To effectuate the Financial Institution Record Match System, financial institutions subject to this section shall provide to the Franchise Tax Board on a quarterly basis the name, record address, and other addresses, social security number or other taxpayer identification number, and other identifying information for each delinquent tax debtor, as identified by the Franchise Tax Board by name and social security number or other taxpayer identification number, who maintains an account at the institution.

(2) The first data file created by the Franchise Tax Board for purposes of matching tax debtor records to financial institution accountholder records shall be limited to 600,000 tax debtor records. The number of tax debtor records included in a subsequent data file created by the Franchise Tax Board may be increased by no more than 600,000 tax debtor records greater than the number of tax debtor records included in the immediately preceding data file until all eligible tax debtor records are included in the data match file.

(d) Unless otherwise required by law, a financial institution furnishing a report or providing information to the Franchise Tax Board pursuant to this section shall not disclose to a depositor or an accountholder, or a codepositor or coaccountholder, that the name, address, social security number or other taxpayer identification number, or other identifying information of that delinquent tax debtor has been received from or furnished to the Franchise Tax Board.

(e) A financial institution shall incur no obligation or liability to any person arising from any of the following:

(1) Furnishing information to the Franchise Tax Board as required by this section.

(2) Failing to disclose to a depositor or accountholder that the name, address, social security number or other taxpayer identification number, or other identifying information of that delinquent tax debtor was included in the data exchange with the Franchise Tax Board required by this section.

(3) Any other action taken in good faith to comply with the requirements of this section.

(f) The Franchise Tax Board may institute civil proceedings to enforce this section.

(g) Any financial institution that willfully fails to comply with the rules and regulations promulgated by the Franchise Tax Board for the administration of delinquent tax collections, unless it is shown to the satisfaction of the Franchise Tax Board that the failure is due to reasonable cause, shall be assessed a penalty upon notice and demand of the Franchise Tax Board and collected in the same manner as tax. The penalty imposed under this section shall be in an amount equal to fifty dollars ($50) for each record not provided, but the total imposed on that financial institution for all such failures during any calendar year shall not exceed one hundred thousand dollars ($100,000).

(h) For purposes of this section:

(1) “Account” means a demand deposit account, share or share draft account, checking or negotiable withdrawal order account, savings account, time deposit account, or money market mutual fund account, regardless of whether the account bears interest.

(2) “Financial institution” means:

(A) A depository institution, as defined in Section 1813(c) of Title 12 of the United States Code.

(B) An institution-affiliated party, as defined in Section 1813(u) of Title 12 of the United States Code.

(C) A federal credit union or state credit union, as defined in Section 1752 of Title 12 of the United States Code, including an institution-affiliated party of a credit union, as defined in Section 1786(r) of Title 12 of the United States Code.

(D) A benefit association, insurance company, safe deposit company, money-market fund, or similar entity authorized to do business in this state.

(3) “Delinquent tax debtor” means any of the following:

(A) Any person liable for any tax, fee, or surcharge amounts, and any penalty, interest, or other amounts required to be paid to the board, where the liability remains unpaid after 30 days from demand for payment by the board, and the person is not making current timely installment payments on the liability under an installment payment agreement as provided by law.

(B) Any person liable for any amounts required to be paid to the Employment Development Department or for any debts or penalty assessments referred to the Employment Development Department for collection and the person is not making current timely installment payments on the liability under an approved installment payment agreement as provided by law.

(C) Any person liable for any income or franchise tax or other debt referred to the Franchise Tax Board for collection as imposed under Part 5 (commencing with Section 10701), Part 10 (commencing with Section 17001), this part, or Part 11 (commencing with Section 23001), including tax, penalties, interest, and fees, where the tax or debt, including the amount, if any, referred to the Franchise Tax Board for collection remains unpaid after 30 days from demand for payment by the Franchise Tax Board, and the person is not making current timely installment payments on the liability under an agreement pursuant to Section 19008.

(i) A financial institution shall be reimbursed by the Franchise Tax Board for actual costs incurred to implement this section. Upon receipt of an invoice from the financial institution, cost reimbursement by the Franchise Tax Board shall be limited to the following:

(1) For one-time startup costs of a financial institution, no more than two thousand five hundred dollars ($2,500).

(2) For data matching costs of a financial institution, other than one-time startup costs, no more than two hundred fifty dollars ($250) per calendar quarter.

(j) The first data exchange for purposes of matching tax debtor records to financial institution accountholder records shall occur no earlier than April 1, 2012.

(k) This section shall be operative 120 days after the effective date of Chapter 14 of the Statutes of 2011 and shall apply with respect to persons that are delinquent tax debtors on and after that date.

(1) Notwithstanding any other law, on or after January 1, 2013, and on a quarterly basis thereafter, the board and the Employment Development Department shall, in the format and manner specified by the Franchise Tax Board, provide their respective delinquent tax debtor information to the Franchise Tax Board for inclusion in the Financial Institution Record Match System.

(2) The Franchise Tax Board shall include the delinquent tax debtor information provided by the board and the Employment Development Department in its data file used to match delinquent tax debtor records to financial institution accountholder records.

(3) The Franchise Tax Board shall provide the board or the Employment Development Department, as applicable, with any matched financial institution accountholder record information resulting from the delinquent tax debtor information provided by the board or the Employment Development Department.

(4) The board and the Employment Development Department shall reimburse the Franchise Tax Board for any costs incurred by the Franchise Tax Board related to the implementation and administration of this section with respect to delinquent tax debtors described in subparagraph (A) or (B), respectively, of paragraph (3) of subdivision (h).

(l) The amendments to this section by the act adding this subdivision shall apply to information provided pursuant to this section before, on, and after the effective date of that act.

history: (History: Amended by Stats. 2013, Ch. 200, Sec. 1. (AB 1411) Effective January 1, 2014.)

article: 4. Miscellaneous Provisions


text:
(a) (1) (A) Fines, monetary sanctions, state or local penalties, bail, forfeitures, restitution fines, restitution orders, or any other amounts imposed by a juvenile or superior court of the State of California or the Supreme Court of the State of California upon a person or any other entity, or any payment from the State Bar of California’s Client Security Fund that is part of a final determination from the Client Security Fund, that are due and payable in an amount totaling no less than one hundred dollars ($100), in the aggregate, for criminal offenses, including all offenses involving a violation of the Vehicle Code, any amounts due pursuant to Section 903.1 of the Welfare and Institutions Code, and any amounts due pursuant to Section 6086.10, 6086.13, or 6140.5 of the Business and Professions Code may, no sooner than 90 days after payment of that amount becomes delinquent, be referred by the juvenile or superior court, the county, the state, or the State Bar to the Franchise Tax Board for collection under guidelines prescribed by the Franchise Tax Board. Except as specified in subparagraph (B), the Department of Corrections and Rehabilitation or county may refer a restitution order to the Franchise Tax Board, in accordance with subparagraph (B) of paragraph (2), for any person subject to the restitution order who is or has been under the jurisdiction of the Department of Corrections and Rehabilitation or the county.

(B) The Department of Corrections and Rehabilitation or the county shall not refer a restitution order to the Franchise Tax Board if a county agency has been designated by the county board of supervisors to collect restitution from individuals who (i) are serving a sentence in a county jail pursuant to subdivision (h) of Section 1170 of the Penal Code, (ii) are on mandatory supervision pursuant to paragraph (5) of subdivision (h) of Section 1170 of the Penal Code, or (iii) are on postrelease community supervision pursuant to Title 2.05 (commencing with Section 3450) of Part 3 of the Penal Code, the designated county agency has an existing collection system and objects to collection by the Franchise Tax Board, and the designated county agency informs the Department of Corrections and Rehabilitation or the county that it will collect the restitution order.

(C) If the crime victim entitled to restitution in the order notifies either the Department of Corrections and Rehabilitation or the designated county agency with regard to their preference of a collecting agency, that preference shall be honored and the collection shall be performed in accordance with the preference of the victim.

(2) For purposes of this subdivision:

(A) The amounts referred by the juvenile or superior court, the county, the state, or the State Bar under this section may include an administrative fee and any amounts that a government entity may add to the court-imposed obligation as a result of the underlying offense, trial, or conviction. For purposes of this article, those amounts shall be deemed to be imposed by the court.

(B) Restitution orders may be referred to the Franchise Tax Board only by a government entity, as agreed upon by the Franchise Tax Board, provided that all of the following apply:

(i) The government entity has the authority to collect on behalf of the state or the victim.

(ii) The government entity shall be responsible for distributing the restitution order collections, as appropriate.

(iii) The government entity shall ensure, in making the referrals and distributions, that it coordinates with any other related collection activities that may occur by superior courts, counties, or other state agencies.

(iv) The government entity shall ensure compliance with laws relating to the reimbursement of the Restitution Fund.

(C) The Franchise Tax Board shall establish criteria for referral that shall include setting forth a minimum dollar amount subject to referral and collection.

(b) The Franchise Tax Board, in conjunction with the Judicial Council, shall seek whatever additional resources are needed to accept referrals from all 58 counties or superior courts.

(c) Upon written notice to the debtor from the Franchise Tax Board, any amount referred to the Franchise Tax Board under subdivision (a) and any interest thereon, including any interest on the amount referred under subdivision (a) that accrued prior to the date of referral, shall be treated as final and due and payable to the State of California, and shall be collected from the debtor by the Franchise Tax Board in any manner authorized under the law for collection of a delinquent personal income tax liability, including, but not limited to, issuance of an order and levy under Article 4 (commencing with Section 706.070) of Chapter 5 of Division 2 of Title 9 of Part 2 of the Code of Civil Procedure in the manner provided for earnings withholding orders for taxes.

(d) (1) Part 10 (commencing with Section 17001), this part, Part 10.7 (commencing with Section 21001), and Part 11 (commencing with Section 23001) shall apply to amounts referred under this article in the same manner and with the same force and effect and to the full extent as if the language of those laws had been incorporated in full into this article, except to the extent that any provision is either inconsistent with this article or is not relevant to this article.

(2) Any information, information sources, or enforcement remedies and capabilities available to the court or the state referring to the amount due described in subdivision (a) shall be available to the Franchise Tax Board to be used in conjunction with, or independent of, the information, information sources, or remedies and capabilities available to the Franchise Tax Board for purposes of administering Part 10 (commencing with Section 17001), this part, Part 10.7 (commencing with Section 21001), or Part 11 (commencing with Section 23001).

(e) The activities required to implement and administer this part shall not interfere with the primary mission of the Franchise Tax Board to administer Part 10 (commencing with Section 17001) and Part 11 (commencing with Section 23001).

(f) For amounts referred for collection under subdivision (a), interest shall accrue at the greater of the rate applicable to the amount due being collected or the rate provided under Section 19521. When notice of the amount due includes interest and is mailed to the debtor and the amount is paid within 15 days after the date of notice, interest shall not be imposed for the period after the date of notice.

(g) A collection under this article is not a payment of income taxes imposed under Part 10 (commencing with Section 17001) or Part 11 (commencing with Section 23001).

(h) (1) Both of the following shall apply to any levy or order issued on or after January 1, 2022, under subdivision (c):

(A) The maximum amount of disposable earnings of a debtor for any workweek that is subject to collection shall not exceed the amount specified in Section 706.050 of the Code of Civil Procedure.

(B) The minimum basic standard of care amount specified in subdivision (a) of Section 704.220 of the Code of Civil Procedure shall not be subject to collection.

(2) This subdivision shall not apply to restitution orders or restitution fines.

history: (History: Amended by Stats. 2021, Ch. 256, Sec. 16. (AB 176) Effective September 23, 2021.)

path: 2. OTHER TAXES > 10.2. ADMINISTRATION OF FRANCHISE AND INCOME TAX LAWS > 5. Collection of Tax > 5.5. Collection of Amounts Imposed by a Court


text:
(a) The Legislature finds that it is essential for fiscal purposes that the program authorized by this part be expeditiously implemented. Accordingly, 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, criteria, procedure, determination, rule, notice, or guideline established or issued by the Franchise Tax Board or Controller in implementing and administering the program required by this article.

(b) Except as provided in subdivision (a), any standard, criteria, procedure, determination, rule, notice, or guideline that otherwise would be subject to Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code shall be approved by a majority vote of the Franchise Tax Board.

history: (History: Added by Stats. 1994, Ch. 1242, Sec. 8. Effective January 1, 1995.)

article: 5.5. Collection of Amounts Imposed by a Court


text:
(a) Except as otherwise provided in subdivision (e), amounts collected under this article shall be transmitted to the Treasurer and deposited in the State Treasury to the credit of the Court Collection Account in the General Fund, which is hereby created. Amounts deposited in the Court Collection Account shall, less an amount that is equal to the costs incurred by the Franchise Tax Board in administering the program authorized by this article, be transferred by the Controller either to the county or to the state fund to which the amount due was originally owing or as otherwise directed by contractual agreement. If the amount collected is not sufficient to satisfy the amounts referred for collection pursuant to Section 19280 that are to be paid by an offender, then the amount paid shall be allocated for distribution on a pro rata basis, as defined in subdivision (d), except in counties where the board of supervisors has established a priority of payment for amounts collected under this article pursuant to Section 1203.1d of the Penal Code. The amount that is equal to the costs incurred by the Franchise Tax Board in administering the program authorized by this article shall be transferred by the Controller to the General Fund for the purpose of recovering the amount expended by the Franchise Tax Board from General Fund appropriations for the purpose of implementing and administering the program authorized by this article, and related statutes as added or amended by the act adding this article.

(b) It is the intent of the Legislature that costs to the Franchise Tax Board to administer this article for the 2025–26 fiscal year and each fiscal year thereafter not exceed 20 percent of the amount it collects pursuant to this article.

(c) Notwithstanding Section 13340 of the Government Code, all moneys deposited in the Court Collection Account pursuant to this section are hereby continuously appropriated, without regard to fiscal years, for purposes of making distributions pursuant to subdivision (a).

(d) For purposes of this section, “pro rata basis” means a distribution determined as follows: the sum of the amounts referred for collection pursuant to Section 19280 to be paid by an offender shall be allocated and distributed in the same proportion that each of the elements has to the sum.

(e) For amounts collected pursuant to a restitution fine or restitution order, subdivision (a) is modified to require the deposit and disbursement of funds collected under this article to be in accordance with the laws relating to reimbursement of the State Restitution Fund.

history: (History: Amended by Stats. 2025, Ch. 17, Sec. 16. (SB 132) Effective June 27, 2025.)


text: The Department of Justice, in consultation with the Franchise Tax Board, shall examine ways to enhance the use and effectiveness of this article through integration with the Department of Justice’s Wanted Persons System and shall report the findings and recommendations to the Legislature on or before January 1, 2002.

history: (History: Amended by Stats. 2004, Ch. 380, Sec. 4. Effective January 1, 2005.)


text:
For purposes of this article:

(a) “CalSavers Retirement Savings Program” shall have the same meaning as “CalSavers Retirement Savings Program” as described in subdivision (b) of Section 100000 of the Government Code.

(b) “Eligible employer” shall have the same meaning as “eligible employer” as described in subdivision (d) of Section 100000 of the Government Code.

history: (History: Added by Stats. 2020, Ch. 21, Sec. 15. (AB 102) Effective June 29, 2020.)

path: 2. OTHER TAXES > 10.2. ADMINISTRATION OF FRANCHISE AND INCOME TAX LAWS > 5. Collection of Tax > 6. Collection of Amounts Imposed by CalSavers Retirement Savings Board and Related Appeals


text:
(a) (1) Penalties imposed pursuant to Title 21 (commencing with Section 100000) of the Government Code, upon an eligible employer for failure to comply with Title 21 (commencing with Section 100000) of the Government Code, may be referred by the CalSavers Retirement Savings Board to the Franchise Tax Board for collection under guidelines prescribed by the Franchise Tax Board.

(2) The Franchise Tax Board shall establish criteria for referral that shall include setting forth a minimum dollar amount subject to referral and collection.

(b) Upon written notice to a noncompliant eligible employer from the Franchise Tax Board, any amount referred to the Franchise Tax Board under subdivision (a) shall be treated as final and due and payable to the State of California, and may be collected from the eligible employer by the Franchise Tax Board in any manner authorized under the law for collection of a delinquent personal income tax liability, except that an overpayment of any liability imposed under Part 10 (commencing with Section 17001), Part 11 (commencing with Section 23001), or this part shall not be credited against any balance due pursuant to this section.

(c) Any information, information sources, or enforcement remedies and capabilities available to the CalSavers Retirement Savings Board or the state referring to the amount due described in subdivision (a) shall be available to the Franchise Tax Board to be used in conjunction with, or independent of, the information, information sources, or remedies and capabilities available to the Franchise Tax Board.

(d) The activities required to implement and administer this article shall not interfere with the primary mission of the Franchise Tax Board to administer Part 10 (commencing with Section 17001), Part 10.2 (commencing with Section 18401), and Part 11 (commencing with Section 23001).

(e) A collection under this article is not a payment of income taxes imposed under Part 10 (commencing with Section 17001) or Part 11 (commencing with Section 23001).

article: 6. Collection of Amounts Imposed by CalSavers Retirement Savings Board and Related Appeals