Thousands of Businesses Need to File State Tax Returns
October 2009 - On September 14, 2009, we began contacting more than 35,000 companies that did business in California in 2007, but failed to file a state tax return for that year.
We annually review more than 5 million income records from government agencies and financial institutions, and match them against tax records filed to determine whether some businesses have yet to file. As part of this annual effort, we collected approximately $31 million last year from businesses that failed to file tax returns.
Businesses we contacted will have 30 days to file their delinquent tax return or show why one is not due. If no action is taken, we will issue a tax assessment that may include penalties and fees.
Failure to file tax returns is one part of the tax gap that is defined as the difference between taxes owed and taxes paid. California estimates its annual tax gap to be $6.5 billion per year.
For those receiving notices, information is available by calling 866.204.7902. Callers should be prepared to provide the 15-digit notice number.
In March 2009, we began a similar program with individual taxpayers, contacting more than 900,000 individuals who earned California income, but failed to file state income tax returns last year.
We identify nonfilers by using more than 350 million income records we receive annually from third parties such as the IRS, banks, employers, state departments, and other sources. In addition, we use occupational licenses and mortgage interest payment information to detect individuals who have not yet filed.
Last year, we collected more than $550 million in revenue through these efforts.
For those receiving notices, go to ftb.ca.gov, and search for Request/Demand for Tax Return. Taxpayers can request more time to respond, retrieve information that can assist them in filing a tax return, request tax forms, learn about payment options, sign up to receive an email reminder to file, and much more. Individuals can also call us at 866.204.7902 to get information.