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900,000 Did Not file a 2010 State Income Tax Return

  Sanjiv Gupta CPA  Published 
900,000 Did Not file a 2010 State Income Tax Return

The Franchise Tax Board (FTB) recently announced that it is contacting more than 900,000 people who did not file a 2010 state income tax return.  

FTB collects information about taxpayers by using more than 400 million income records.  Tax Board gets information about non-filers from third parties such as banks, employers, IRS, state departments, and other sources.

Moreover, FTB compiles information from occupational licenses and mortgage interest payments.  Using such information allows FTB to contact those who earned the income in the State of California but did not file the tax return.

According to a recent post on the FTB website, last year, FTB collected more than $574 million through these efforts.

Once FTB contacts a taxpayer, Individuals have 30 days to file their State Tax Return or show why they are not required to file.  If the required return is not filled, FTB makes a tax assessment based upon the information it has collected.  In addition to tax assessment, taxpayer is also billed an interest, fees, and penalties of up to 50% of the tax due. 

What to do if you receive such notice and/or have not filed the tax return?

You can respond to the letter by visiting FTB Website here.  You simply enter the Notice Number and respond to the request.  You should be very careful in response as anything you write or tell to FTB becomes evidence and stays on their records. 

Therefore, It is highly recommended that you consult with your CPA or Tax Attorney to address the issue immediately.   Not responding to the letter will simply escalate the issue and increase the penalties.  Tax professionals experienced in dealing with IRS and FTB can quickly identify the problem and take corrective actions.

Our office can also help you with all kinds of audits include filing previous year tax returns.   We can sit down with you to learn about the problem and come with a game plan to reduce the tax liability.