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Frivolous Return Penalty

Purpose of bulletin

To inform staff that beginning January 1, 2011, we will impose a $5,000 penalty for tax returns filed on or after January 1, 2010, in response to a frivolous return penalty pursuant to R&TC §19179.

Background

A “frivolous return” is imposed if all the following apply:

  • The taxpayer submits what is purported to be a required return.
  • The purported return does not contain sufficient information to judge the substantial correctness of the self-assessment, or contains information that, on its face, indicates that the self-assessment is substantially incorrect.
  • The purported return is based on a frivolous position or reflects an attempt to delay or impede administration of the tax laws.

Any individual who submits a “frivolous return” must pay a $5,000 penalty unless the individual withdraws the return within 30 days of FTB’s notice that it is a “frivolous return.”

Additional Information

When a frivolous return is identified, FTB 4619, Notice of Frivolous Return Determination is sent to inform the individual that the frivolous return is based on an identified frivolous position, or it reflects a desire to delay or impede the administration of federal or state income tax laws. FTB 4619. Notice of Frivolous Return Determination will show the new penalty amount as of January 1, 2011.

If the frivolous return is withdrawn in writing within 30 days after the notice is sent, the penalty imposed under R&TC §19179 does not apply to that return.

If it is not withdrawn in writing, and the penalty is imposed, there are two ways for individuals to contest the penalty:

  • Requesting relief from the penalty by submitting FTB 626, Request for Chief Counsel to Relieve Penalties.
  • After paying the penalty in full, file a claim for refund, provided they pursue this option within the statute of limitations.

Taxpayer Inquiries

Go to ftb.ca.gov, and search for frivolous return penalty or call us at 916.845.7790, Monday through Friday, 8:00 a.m. to 5:00 p.m.