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2005 California Tax Amnesty: Protest, Appeal, Settlement, and Litigation Amnesty Procedures

Updated - March 4, 2005

Current Tax Disputes

For amnesty-eligible tax years, a taxpayer can apply for tax amnesty for unpaid amounts where a formal protest, appeal (including protests or appeals in settlement), or litigation case has been filed. A taxpayer can also apply for amnesty for unpaid amounts if the taxpayer has received a Notice of Proposed Assessment or Notice of Action, and the time for filing a protest or appeal has not yet expired.

  1. Can I apply for amnesty if I have received a Notice of Proposed Assessment and have not responded?
  2. Can I apply for amnesty if I have a pending protest?
  3. Can I apply for amnesty if I have received a Notice of Action on a proposed assessment and have not filed an appeal?
  4. Can I apply for amnesty if I have a pending appeal?
  5. What do I do if I have an innocent spouse appeal?
  6. What do I do if I have an interest abatement appeal?
  7. What do I do if I have a pending litigation case?
  8. Can I apply for partial amnesty?
  9. If I file and complete amnesty for a tax year, and the FTB later audits that year and proposes an additional assessment, can I protest and appeal that additional assessment?

1. Can I apply for amnesty if I have received a Notice of Proposed Assessment and have not responded?

If the time for filing a protest has not expired, you may apply for amnesty for the years shown on the proposed assessment. By filing for and completing amnesty, you're telling us that you agree with the proposed assessment. We will finalize the assessment, process your amnesty application, and apply your payment to the amount due.

2. Can I apply for amnesty if I have a pending protest?

You may apply for amnesty on a year for which you have a pending protest of a Notice of Proposed Assessment. If you apply for and complete amnesty, you're requesting that we dismiss your protest. We will finalize the assessment, process your amnesty application, and apply your payment to the amount due.

3. Can I apply for amnesty if I have received a Notice of Action on a proposed assessment and have not filed an appeal?

If the time for filing an appeal with the California State Board of Equalization has not expired, you can apply for amnesty for the tax year shown on the Notice of Action. If you apply for and complete amnesty, you're telling us that you agree with the Notice of Action. We will finalize the assessment, process your amnesty application, and apply your payment to the amount due.

4. Can I apply for amnesty if I have a pending appeal?

You can apply for amnesty on a year for which you have a pending appeal with the California State Board of Equalization. If you apply for and complete amnesty, your amnesty application is a request that the Board of Equalization dismiss your appeal. We will finalize the assessment, process your amnesty application, and apply your payment to the amount due.

5. What do I do if I have an innocent spouse appeal?

If you and/or your spouse filed a formal appeal to the California State Board of Equalization under the special innocent spouse process, you may apply for amnesty by filing an application and paying in full the balance due. You can apply for amnesty even if your spouse does not. If you filed an appeal, your amnesty application and completion of amnesty operates as a request that the Board of Equalization dismiss your appeal. We will process your amnesty application and apply your payment to the amount due.

6. What do I do if I have an interest abatement appeal?

If you filed a formal appeal to the California State Board of Equalization under the interest abatement process, you can request amnesty by filing an application and paying in full the balance due. Your amnesty application and completion of amnesty is a request that the Board of Equalization dismiss your appeal. We will process your amnesty application and apply your payment to the amount due.

7. What do I do if I have a pending litigation case?

You may apply for amnesty for unpaid amounts on any amnesty-eligible tax year for which you have filed a litigation case. If you apply for and complete amnesty on a year for which you have a pending litigation case, you agree to request a dismissal from the court having jurisdiction over your case. We will process your amnesty application and apply your payment to the amount due.

8. Can I apply for partial amnesty?

Most taxpayers will choose full participation in amnesty so we can waive most penalties and fees, and they can avoid the substantial, new penalties that may apply after March 31, 2005. However, you may request amnesty only for a portion of a proposed assessment amount, while continuing to protest or appeal the remaining disputed portion. If you don't choose full amnesty participation, you'll be subject to amnesty penalties on any portion remaining after March 31, 2005.

If you want to apply for partial amnesty for a proposed assessment, please follow the instructions on the application notice that you received from us. By May 31, 2005, you will need to pay in full all amounts for which you request amnesty and any other balance due amounts for the amnesty years, and file an amended return showing the computation of the amnesty portion of the proposed assessment.

9. If I file and complete amnesty for a tax year, and the FTB later audits that year and proposes an additional assessment, can I protest and appeal that additional assessment?

Yes. RTC section 19733(d) provides that FTB may propose a deficiency after amnesty, but that new proposed deficiency assessment shall not invalidate any of the penalty waivers accomplished under amnesty. That new assessment will be subject to the post-amnesty penalty of 19777.5(a)(2) if it is sustained, and that taxpayer may file a protest and/or appeal of that new proposed assessment, or pay it and file a refund claim. The prohibition on filing a refund claim for amounts paid in connection with amnesty does not prevent a refund claim for amounts paid subsequent to or prior to amnesty, if the statute of limitations is still open

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