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Head of Household Notification – 2005 Tax Year

PURPOSE OF BULLETIN

To inform staff that we will begin mailing the 2005 tax year Head of Household Audit Letters in August 2006. Due to changes in federal and state tax laws that affect the HOH filing status, we expect a higher than normal number of phone calls.

BACKGROUND

Each year we review the returns of taxpayers who claim the HOH filing status because the qualifications for the filing status are commonly misunderstood. We anticipate mailing approximately 150,000 HOH audit letters for the 2005 tax year between August 2006 and December 2006.

HOH AUDIT LETTER

The audit letter provides information on:

  • Why we are reviewing their filing status information.
  • How to obtain assistance in completing the questionnaire.
  • How to return the completed questionnaire.
  • The qualification requirements for HOH.
  • Frequently asked questions about HOH.
  • How to obtain assistance with completing the questionnaire for Spanish-speaking taxpayers.

AUDIT PROCESS

Taxpayers should complete the 2005 HOH Audit Letter and return it to FTB by the response due date on the audit letter.

HOH audit staff:

  • Will review completed questionnaires to determine if taxpayers qualify for the HOH filing status.
  • May call taxpayers or send follow-up letters if responses are incomplete or contain conflicting information.
  • Will send a HOH Acceptance Letter to qualified taxpayers. Acceptance letters only apply to the specific tax year examined and do not qualify the taxpayer for any other tax year.

A Notice of Proposed Assessment disallowing the HOH filing status will be sent to taxpayers who do not respond to the audit letter, or do not qualify for the HOH filing status based on their responses in the questionnaire. We will impose a failure to furnish information penalty, to the extent allowed by law, on all taxpayers who do not respond by the due date on the audit letter.

NOTE REGARDING e-FILERS

Taxpayers who file electronically (e-file) and claimed the head of household filing status had the option of completing and including an electronic HOH questionnaire (Schedule HOH/FTB 4803e) with their e-filed return. We will not send a HOH Audit Letter to taxpayers who submitted this information with their e-filed return. However, they may still receive a follow-up audit letter if the information they provided was incomplete or conflicting. Advise these taxpayers to complete and return the follow-up audit letter by the due date on the letter.

MAILING SCHEDULE AND VOLUMES

The 2005 HOH audit letter mailings will begin in August of 2006. We anticipate weekly mailings of approximately 10,000 letters to continue through December 2006. Whenever possible, letters will have a Monday or Tuesday mail date.

TAXPAYER INQUIRIES

Advise taxpayers to complete and return the audit letter questionnaire by the date specified on their letter. We cannot take the information over the telephone. Taxpayers may return the questionnaire to us by mail or fax to the number shown on the cover letter.

A list of frequently asked questions is attached to this bulletin. The same questions are also included with the audit letters we mail to the taxpayers.

Taxpayers can get more information about HOH and the requirements for using the HOH filing status by visiting our Web page at: /individuals/hoh/index.shtml

 

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