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50 Percent Interest Based Penalty

REFUND CLAIM TIME

We imposed a penalty because your entity had a past-due tax

FRAMES

liability that qualified for tax amnesty, but it did not resolve its

tax amnesty obligations. Check the Web at

for more information. The penalty is equal to 50 percent of the

There is a time limit for requesting a refund from us. Generally,

interest that accrued on the balance from the original due date

you can file a refund claim until the later of four years from the

of the tax to March 31, 2005. You can file a claim for refund of

due date of your return, or one year from the date of

this penalty only on the grounds that the amount of the penalty

overpayment. (R&TC Section 19306)

was not properly computed by the Franchise Tax Board.

For claims filed on or after January 1, 2002, you can file an

(R&TC Section 19777.5(a)(1))

informal refund claim within the time frames indicated above if

Accuracy and Fraud Penalty

you have not paid the full amount due. An informal claim will

Under certain circumstances, if you understate your entity's tax

extend your time frames and protect your right to file an appeal

liability, we may impose a 20 percent accuracy penalty on the

with the California State Board of Equalization or file suit

understatement. We may also impose a 75 percent fraud

against us in court. However, if you fully paid your tax liability

penalty on any portion of the understatement that is

more than seven years ago, we cannot refund these amounts.

attributable to fraud. (R&TC Section 19164)

(R&TC Section 19322.1)

Delinquent Return Penalty

If you do not file your entity's income tax return by the original

TELEPHONE AND INTERNET

due date, we impose a penalty of 5 percent of the tax due,

after applying any payments and credits made on or before the

ASSISTANCE

due date, for each month or part of a month the return is late.

The maximum penalty is 25 percent. (R&TC Section 19131)

From within the United States, call . . . . . . . . . (800) 852-5711

Demand to File Penalty

From outside the United States, call

If we send you a demand to file your entity’s income tax return

(not toll-free) . . . . . . . . . . . . . . . . . . . . . . . . (916) 845-6500

and you do not file it, we impose a penalty of 25 percent of the

Website at:

tax liability before applying any payments or credits. Therefore,

Assistance for persons with disabilities: We comply with

your entity may owe penalty and interest even if its tax

the Americans with Disabilities Act. Persons with hearing or

return shows that a refund is due. This penalty is in addition

speech impairments please call TTY/TDD (800) 822-6268.

to the 25 percent delinquent return penalty. (R&TC

Section 19133)

Dishonored Payment Penalty

COLLECTION COST

We impose a penalty if your entity’s financial institution does

not honor a payment you make to us by check, money order,

RECOVERY FEES

or electronic funds transfer. For a payment of $750 or more,

the penalty is 2 percent of the payment amount. For a payment

Collection Fee

less than $750, the penalty is $15 or the payment amount;

whichever is less. (R&TC Section 19134)

We charge a collection fee to entities that require us to take

collection action to resolve filing and payment delinquencies.

Electronic Funds Transfer Requirement

(R&TC Section 19254)

Once a corporation remits an estimated tax or extension

Filing Enforcement Fee

payment in excess of $20,000 or has a total tax liability in

excess of $80,000 in any taxable year beginning on or after

We charge a filing enforcement fee to entities that do not file a

January 1, 1995, it must make all future payments, regardless

tax return by the date indicated on our written demand to file a

of the taxable year or amount, through an electronic funds

tax return. (R&TC Section 19254)

transfer. Payments made by other means will result in a

Lien Fee

penalty of 10 percent of the amount paid. For more information

We charge a lien fee to entities with delinquent liabilities when

regarding this requirement, see our Electronic Funds Transfer

we file a state tax lien with the county recorder or the

Information Guide (FTB Pub. 3817), access our Website at

California Secretary of State. (R&TC Section 19221 and

, or call us at (800) 852-2753. (R&TC

Government Code Section 7171)

Section 19011)

Estimated Tax Penalty

We impose a penalty if your entity does not pay, pays late, or

PENALTIES

underpays an estimated tax installment. We calculate the

penalty on the unpaid amount from the due date of the

estimated tax installment to the date we receive your payment

40 Percent Accuracy Penalty

or to the due date of the return, whichever is earlier. (R&TC

For tax years that were eligible for amnesty, we may impose an

Sections 19142 - 19161)

accuracy-related penalty if you understated your entity's

liability. The penalty is equal to 40 percent of the related

underpayment. (R&TC Section 19164)

FTB 7265BC (REV 03-2006) SIDE 2

Form Ftb 7265bc - Corporation Collections Information - State Of California Franchise Tax Board Page 2

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