Updated - October 12, 2005
Description
This penalty is an addition to tax for each tax year that was eligible for amnesty, but amnesty was not requested, and there was an unpaid amount due on March 31, 2005 (50% Interest Based penalty). The penalty is also imposed where the Franchise Tax Board mails a notice of proposed assessment or a notice of tax due or where a taxpayer self assesses additional tax for an amnesty eligible tax year after the end of the amnesty period (post-amnesty penalty).
Amount
The 50% Interest Based penalty is calculated as an amount equal to fifty percent of the interest that accrued on the unpaid daily balance from the original due date of the tax to March 31, 2005. The post-amnesty penalty is calculated as an amount equal to fifty percent of the interest computed on the additional amount from the original due date of the tax year to March 31, 2005.
When this penalty does not apply
This penalty does not apply to amounts covered by an existing personal income tax installment agreement entered into before February 1, 2005.
Also see question #21 under Payments, Penalties and Miscellaneous.
Protest or claim a refund
There is no right to protest this penalty. You can file a claim for refund of this penalty only on the grounds that the Franchise Tax Board did not properly compute the amount of the penalty.
Effective date
This penalty applies to taxable years 2002 and prior. The 50% Interest Based penalty applies to balances due on March 31, 2005. The post-amnesty penalty applies to final amounts shown on notices issued or returns filed after March 31, 2005.