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Estimated Tax Penalty Relief for Farmers Affected by the Company MF Global Bankruptcy

Purpose of bulletin

To inform staff that we will waive the estimated tax penalty for farmers affected by the company MF Global bankruptcy.

Background

On March 23, 2012, IRS published IR 2012-37 providing relief to farmers affected by MF Global bankruptcy. This relief is available through California’s estimated tax penalty waiver process.

Waiver request

If you receive contacts from farmers who are affected by MF Global bankruptcy and are requesting a waiver of the estimated tax penalty, do the following:

If the taxpayer has not filed their 2011 tax return

To request a waiver of the estimated tax penalty, taxpayers need to complete FTB Form 5805F, Underpayment of Estimated Tax by Farmers and Fishermen. On line 16, they need to state “MF Global” as the reason for the waiver request. FTB Form 5805F provides detailed instructions on how to complete line 16.

In order to process the returns correctly, they must fill in the circle on FTB Form 540, line 113; Long Form 540NR, line 123 and FTB Form 541, line 42.

Taxpayers may e-file their return. They should follow their software’s instructions for claiming this waiver.

If the taxpayer has filed their 2011 tax return

To request a waiver of the estimated tax penalty, taxpayers must complete FTB Form 5805F. On line 16, they need to state “MF Global” as the reason for the waiver request. FTB Form 5805F provides detailed instructions on how to complete line 16. Taxpayers can fax or mail their request to:

Fax: 916.845.9300
FRANCHISE TAX BOARD
PO BOX 942840
SACRAMENTO, CA 94240-0040