Permanent Physical or Mental Impairment Mandatory e-Pay Waiver

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Purpose of bulletin

To inform staff of the new permanent physical or mental impairment mandatory e-pay requirement waiver.

Background

Taxpayers who are subject to the mandatory e-pay requirements, can submit FTB Form 4107, Mandatory e-Pay Election to Discontinue or Waiver Request, if one or more of the following is correct:

  • They have not made an estimated tax or extension payment in excess of $20,000 during the previous taxable year; or their tax liability reported for the previous taxable year did not exceed $80,000.
  • The amount they paid was not representative of their tax liability.

If granted a waiver and the taxpayer subsequently meets the mandatory e-pay requirements, they must resume making payments using an electronic method.

Permanent physical or mental impairment waiver

Beginning March, taxpayers who are subject to the mandatory e-pay requirement can request a permanent waiver of the requirement based on a permanent physical or mental impairment that prevents them from using a computer.

Taxpayers must submit FTB Form 4107, Mandatory e-Pay Election to Discontinue or Waiver Request with a signed affidavit by the taxpayer’s physician to request the permanent waiver. We will deny the request if the Physician’s Affidavit of Permanent Physical or Mental Impairment is incomplete or not attached to FTB Form 4107.

Taxpayers receiving a waiver that file a joint return with a spouse or registered domestic partner, who has not received FTB Form 4109PC, Mandatory e-Pay Election to Discontinue or Waiver Request Approval, or FTB Form 4127PC, Mandatory e-Pay Permanent Waiver Request Approval, must continue to make all future payments electronically regardless of the taxable year, type of payment or amount if they have met the mandatory e-pay requirement. Payments made by other means will result in a penalty of one percent of the amount paid, unless the failure to pay electronically was for reasonable cause and not willful neglect. (California Revenue &Taxation Code Section19011.5)

Penalty waivers

When a taxpayer files FTB Form 4107, Mandatory e-Pay Election to Discontinue or Waiver Request they can check a box on the form and have us review their account for possible waiver of a previously imposed mandatory e-pay penalty if all the following exists:

  • They received a mandatory e-pay penalty for payments made before we approved their permanent physical or mental impairment request.
  • The date on the Physician Affidavit of Permanent Physical or Mental Impairment pre-dates the assessment of the penalty.
  • The statute of limitations for filing a claim for refund is still open.

Taxpayer inquiries

We will inform the taxpayer in writing if we approve or deny their waiver request.

For more information see FTB Form 4107 instructions.

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