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Tax News
The amnesty penalty and protective claims

Several court cases are challenging Revenue and Taxation Code Section 19777.5, which prevents filing refund claims to contest the amnesty penalty on grounds other than computation errors.

Under certain circumstances, however, the taxpayer may protect the statute of limitations on a claim by filing a request with us to withhold any action on the claim. The taxpayer may file a protective claim pending the outcome of:

  • An appeal to the State Board of Equalization.
  • A court case (with California jurisdiction or public California Court of Appeal Case).
  • An audit by the Internal Revenue Service.
  • An audit by another state taxing agency.
  • Legislation.
  • Other litigation.

Taxpayers who want to file protective claims based on recent court cases or pending legislation should send us a letter with the following information:

  • Tax year.
  • Amount of amnesty penalty paid.
  • A statement requesting that we hold the correspondence until the outcome of legislation or litigation is decided.

Mail protective claims for the amnesty penalty issue to this address:

Franchise Tax Board
PO Box 942867
Sacramento, CA 94267-2222