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State of California Franchise Tax Board

State to Pursue Nonfilers

Starting now, the Franchise Tax Board (FTB) is contacting nearly 600,000 Californians who failed to file their 2002 state income tax returns, according to the FTB.

"During these difficult financial times, everyone needs to pay their taxes and play by the rules," stated State Controller and FTB Chair Steve Westly.

The FTB's filing enforcement program targets people who earned California income, but did not file a state income tax return. This program collected nearly $370 million dollars last year.

Here's how it works: The FTB annually receives more than 160 million income records from third parties such as banks, employers, state departments, the IRS, and other sources. The FTB matches these income records against the records of tax returns filed. The FTB gives nonfilers 30 days to file their return or show why a tax return is not due. Those who ignore the letter will soon get a tax assessment with added penalties and fees.

While this program mostly identifies wage earners and self-employed individuals who have not filed, it also detects people contributing to the underground economy, that is, who receive cash payments unreported to the government. For example, using mortgage interest paid records to determine whether an individual had a filing requirement resulted in nearly 25,000 tax assessments last year collecting an average of $4,500 per taxpayer.

The FTB has a Website for those who receive notices, Through the Website, people can request more time to respond, retrieve information that can assist them in filing a tax return, learn about payment options, request tax forms, ask to be reminded about next year's filing deadline, correct a misreported social security number, and get answers to questions they may have concerning the notices. Individuals can also call the FTB at (866) 204-7902 to get information.

Editors' Note: Please call for a breakdown by county and city.

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