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State of California Franchise Tax Board

Tax News
Ask the Advocate – Requests for Taxpayer Advocate Equity Relief

Steve Sims, Taxpayers' Rights Advocate.

Under Revenue and Taxation Code Section 21004, the Taxpayers’ Rights Advocate has the discretionary authority to grant relief up to $7,500 from penalties, fees, or interest imposed on a taxpayer because of erroneous actions or inactions of the department where none is available under any other statue and where no part of the error is attributable to
the taxpayer.

Although we have received over one hundred relief requests, to date only the following four situations have actually qualified for relief under the tight restrictions of this provision.

  • An error was made and a delay occurred when correcting the tax return and applying the withholding credit during processing prior to any written contact with the taxpayer.
  • The instructions for FTB Form 541, California Fiduciary Tax Return for tax years 2005 through 2009 did not properly explain that income from Electing Small Business Trusts was subject to the Mental Health Services Tax. As a result, many taxpayers did not include this income when they filed returns.
  • A lengthy computer conversion process resulted in a four-year delay in issuing a bill to a Limited Liability Company.
  • A partnership late filing penalty was misapplied to certain Single Member Limited Liability Companies treated as disregarded entities for tax purposes.

Before seeking relief from the Taxpayers’ Rights Advocate, begin the resolution process by calling the telephone number, writing to the addresses shown on our bills and notices, or working directly with the collector or auditor. If your issue remains unresolved, you can then reach one of our Executive and Advocate Services staff members regarding a tax problem by:

An inability to pay does not qualify for relief, and the request will be denied. However, relief and assistance may be available through:

Steve Sims, EA
Taxpayers' Rights Advocate

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