MyFTB accountPenalties: Resources for you to assist your clients June 2019 Tax News
Last month, we let you know that we would start sending notices at the end of May. And by now, one of your clients may have already contacted you about one of these notices. If your client receives a notice from us, we encourage you to promptly address the matter.
According to the IRS notice 2019 - 25, IRS is waiving the estimated tax penalty for individual taxpayers whose 2018 federal income tax withholding and estimated tax payments fell short of their reported tax liability for the year. As previously explained in the April Tax News, FTB will not provide comparable estimated tax penalty relief because the Tax Cuts and Jobs Act (TCJA) had no general impact to the amount of state income tax an individual would owe. Therefore, for California, the normal rules apply for determining whether an estimated tax penalty may be waived. There is no general reasonable cause exception to the estimated tax penalty.
If we imposed a penalty for failure to pay tax by the due date, the penalty may be waived if the failure was due to reasonable cause and not willful neglect. We have several resources to assist you in requesting reasonable cause relief:
- FTB website: Claim for refund
To request a claim for refund based on reasonable cause, use the forms below:
- Reasonable Cause – Business Entity Claim for Refund
- Reasonable Cause – Individual and Fiduciary Claim for Refund
Remember, we charge interest on any late payment from the original due date of the return to the date paid. Interest compounds daily and the interest rate is adjusted twice a year.
Go to ftb.ca.gov for more information on penalties.