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STATE OF CALIFORNIA BILL OF RIGHTS HIGHLIGHTS

FRANCHISE TAX BOARD The California Taxpayers’ Bill of Rights ensures that we
adequately protect the rights, privacy, and property of all
California taxpayers during the process of assessing and
FTB 1140 collecting taxes. The following information may be helpful
to you if we begin collection actions on your tax liability.

Personal Income Alternatives to Collection Actions


If you contact us, you can prevent collection actions by

Tax Collections
doing any of the following:
• Paying your tax liability in full.
• Making an installment agreement.

Information • Filing any required returns or providing proof that no


return is due.
• Making an Offer in Compromise that we accept.
In this document, we refer to the California Revenue and • Establishing that your financial hardship prevents you
Taxation Code as R&TC. from paying this liability.
Laws Regarding Collection Actions
RIGHTS AS A TAXPAYER Third Party Contacts: We may contact third parties to
determine or collect your tax liabilities. To the extent the
One of our goals at the Franchise Tax Board is to make law allows, we will provide you, upon your request, a list
certain we protect your rights. We want you to have the of individuals or organizations we contacted during the
highest confidence in the integrity, efficiency, and fairness 12‑month period following the date of the enclosed notice.
of our state tax system. The California Taxpayers’ Bill We must receive your request no later than 60 days after
of Rights (FTB Pub. 4058) includes information on your the 12-month period has ended. (R&TC Section 19504.7)
rights as a state taxpayer and how to request written tax Installment Agreement Cancellation: If we cancel your
advice from the Franchise Tax Board. installment agreement, we will notify you in writing 30
You can order the California Taxpayers’ Bill of Rights days prior to the cancellation. (R&TC Section 19008)
by: Tax Liens: If we file a tax lien, you can get it released by
Telephone: (800) 338-0505 paying the total tax liability (including any penalties and
(Select Personal Income Tax Forms) accrued interest) for the tax years represented by the lien.
Mail: FRANCHISE TAX BOARD We will record a certificate of release in the office of the
PO BOX 942840 county recorder where we filed the tax lien and/or with
SACRAMENTO CA 94240-0040 the California Secretary of State no later than 40 days
after you pay the liability. If you pay by check, the 40-day
Website: www.ftb.ca.gov period does not begin until your financial institution honors
In keeping with the California Taxpayers’ Bill of Rights, we the check. (Government Code Sections 7174(c)(1) and
have a Taxpayer Advocate who reviews cases where 7174(e)(1))
taxpayers have been unable to resolve their problems with Unfortunately, we sometimes file a tax lien in error. If this
us through regular channels. You have the right to an happens to you, please write to us and tell us why you
independent administrative review if we levy your income think we are wrong. If we agree with you, we will send a
or assets or file a tax lien. You must submit your request notice to the applicable county recorder’s office and to
for review within 30 days of the date of the levy notice or credit reporting companies in that county stating that we
within 15 days of the date of the tax lien notice. filed the tax lien in error. (R&TC Section 21019)
You can contact the Taxpayer Advocate by: Bank, Wage, or Other Levies: If we take your property
Mail: TAXPAYER ADVOCATE BUREAU and you believe our action is improper, you have the
PO BOX 157 right to a hearing. At the hearing, you should provide
RANCHO CORDOVA CA 95741-0157 information that demonstrates to us the need to change or
Telephone: (800) 883-5910 withdraw our levy or stop the sale of your property.
FAX: (916) 845-6614 If we seize your bank account in error, and you did not
Website: www.ftb.ca.gov contribute to that error, we may reimburse you for related
bank charges. You must file your reimbursement claim
within 90 days of the levy. (R&TC Section 21018)
The California Code of Civil Procedure Sections 700.010
through 704.995, and the California Revenue and Taxation
Code Sections 18670 and 18671 govern the seizure and

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sale of real and personal property. The California Code
of Civil Procedure Sections 706.020 through 706.154
PENALTIES
govern wage garnishment.
Accuracy and Fraud Penalty
Refund Claim Time Frames Under certain circumstances, if you understate your tax
liability, we may impose a 20 percent accuracy penalty on
There is a time limit for requesting a refund from us.
the understatement. We may also impose a 75 percent
Generally, you can file a refund claim until the later of four
fraud penalty on any portion of the understatement that is
years from the due date of your return, or one year from
attributable to fraud. (R&TC Section 19164)
the date of overpayment. (R&TC Section 19306)
For claims filed on or after January 1, 2002, you can file 40 Percent Accuracy Penalty
an informal refund claim within the time frames indicated For tax years that were eligible for tax amnesty, we
above if you have not paid the full amount due. An may impose an accuracy-related penalty if you have
informal claim will extend your time frames and protect understated your liability. The penalty is equal to 40
your right to file an appeal with the California State Board percent of the related underpayment. (R&TC Section
of Equalization or file suit against us in court. However, 19164)
if you fully paid your tax liability more than seven years
ago, we cannot refund these amounts (R&TC Section Demand to File Penalty
19322.1) If we send you a demand to file your income tax return or
to provide us with information, and you do not comply, we
impose a penalty of 25 percent of the tax liability before
applying any payments or credits. Therefore, you may
TELEPHONE AND INTERNET owe penalties and interest even if your tax return
ASSISTANCE shows that a refund is due. This penalty is in addition to
the 25 percent late return penalty. (R&TC Section 19133)
From within the United States, call . . . . . (800) 852-5711
From outside the United States, Post-Amnesty Penalty
  call (not toll-free) . . . . . . . . . . . . . . . . . (916) 845-6500 We impose a penalty when you owe new or additional tax
on a tax year that qualified for tax amnesty. The penalty
Website . . . . . . . . . . . . . . . . . . . . . . . . . www.ftb.ca.gov
is equal to 50 percent of the interest that accrued on
Assistance for persons with disabilities: We comply the tax assessment from the original due date of the
with the Americans with Disabilities Act. Persons with tax to March 31, 2005. You can file a claim for refund of
hearing or speech impairments please call TTY/TDD this penalty only on the grounds that the amount of the
(800) 822-6268. penalty was not properly computed by the Franchise Tax
Board. (R&TC Section 19777.5(a)(2))

FEES Dishonored Payment Penalty


We impose a penalty if your financial institution does
Cost Recovery Fees not honor a payment you make to us by check, money
We charge you cost recovery fees if we must take order, or electronic funds transfer. For a payment of
collection action to resolve your filing and payment $750 or more, the penalty is 2 percent of the payment
delinquencies. Cost recovery fees may include a filing amount. For a payment less than $750, the penalty is
enforcement fee, a collection fee, a lien fee, and fees $15 or the payment amount; whichever is less. (R&TC
to cover the cost of seizing and selling property. (R&TC Section 19134)
Sections 19254, 19209, 19221, 19233, and 19234) Estimated Tax Penalty
We impose a penalty if you do not pay, pay late, or
underpay an estimated tax installment. We calculate the
TAX LIENS penalty on the unpaid amount from the due date of the
estimated tax installment to the date we receive your
If you do not pay your entire California income tax liability payment or to the due date of the return, whichever is
by the time it becomes due and payable, the unpaid earlier. Please see the interest rates listed on this insert.
amount is subject to a state tax lien. (Government Code (R&TC Section 19136)
Section 7162 and R&TC Section 19221)
We may record the state tax lien in the county recorder’s Late Return Penalty
office of the county in which you live or own real property. If you do not file your income tax return by the extended
We may also file a state tax lien with the California due date, we impose a penalty of 5 percent of the tax
Secretary of State. (Government Code Sections 7171 due, after applying any payments and credits made on
and 7220) or before the original due date, for each month or part
of a month the return is late. The maximum penalty is
25 percent. We impose the penalty from the original due
date of the return. (For a return that shows a balance
due, the minimum penalty for filing a return more than

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60 days late is $100 or 100 percent of the tax due after
applying timely payments and credits, whichever is less.)
(R&TC Section 19131)
Underpayment and Monthly Penalty
We impose a penalty if you do not pay the total amount
due shown on your tax return by the original due date.
The penalty is 5 percent on the unpaid tax, plus 0.5
percent on the unpaid tax for each month or part of a
month it remains unpaid. The maximum penalty is 25
percent of the unpaid tax. (R&TC Section 19132)
50 Percent Interest Based Penalty
We imposed a penalty because you had a past-due tax
liability that qualified for tax amnesty, but you did not
resolve your tax obligations. Check the Web at www.
ftb.ca.gov for more information. The penalty is equal to
50 percent of the interest that accrued on your balance
from the original due date of the tax to March 31, 2005.
You can file a claim for refund of this penalty only on the
grounds that the amount of the penalty was not properly
computed by the Franchise Tax Board. (R&TC Section
19777.5(a)(1))

INTEREST
Interest accrues on unpaid taxes from the original due
date of the return until the date we receive payment. We
also charge interest on penalties. (R&TC Section 19101)
Interest and Penalty Rates
The following are rates for computing interest on:
• Underpayments.
• Overpayments.
• Penalties for estimated tax underpayment. *
*Note: We do not compound the rate when computing
the estimated tax underpayment penalty.
January 1, 2007 and later . . . . . . . . . . . . . . 8% a year
July 1, 2006 – December 31, 2006 . . . . . . . 7% a year
January 1, 2006 – June 30, 2006 . . . . . . . . 6% a year
July 1, 2005 – December 31, 2005 . . . . . . . 5% a year
July 1, 2004 – June 30, 2005 . . . . . . . . . . . . 4% a year
July 1, 2003 – June 30, 2004 . . . . . . . . . . . . 5% a year
July 1, 2002 – June 30, 2003 . . . . . . . . . . . . 6% a year
January 1, 2002 – June 30, 2002 . . . . . . . . 7% a year
January 1, 2001 – December 31, 2001 . . . . 9% a year
January 1, 2000 – December 31, 2000 . . . . 8% a year
July 1, 1999 – December 31, 1999 . . . . . . . 7% a year
To get prior years’ rates, please see the TELEPHONE
AND INTERNET ASSISTANCE section of this insert.

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