Blog Archives - Page 37 of 51

Franchise Tax Board Assessment

July 5, 2026August 24, 2014 by Brotman Law

A Franchise Tax Board assessment are usually made on a tax year basis (i.e. per tax year). A missing Franchise Tax Board assessment is usually defined by which type of entity they are. For non-qualified in California corporation, missing years are created when a business entity does business or derives income during a tax year but doesn’t file a tax return. For California qualified corporations – any time a qualified franchise tax filer doesn’t file a return. Business activity and income do not determine the filing requirement for a corporation who has qualified through the California Secretary of State. Missing year assessments enable the Franchise Tax Board to assess taxes due in the absence of a tax return. Missing year assessments can be set up by Franchise Tax Board’s automated system or manually by its staff. Franchise Tax Board staff must evaluate the cost effectiveness of setting up a missing year assessment if there is no indication of company’s business activity, income, or transferee assessments.

Key Takeaways

A Franchise Tax Board assessment are usually made on a tax year basis (i.e. per tax year). A missing Franchise Tax Board assessment is usually defined by which type of entity they are.
• Is the business entity actively doing business (in or out of California).
• What were the entity’s gross receipts for the certain year(s) of.

Franchise Tax Board Protest and Appeals – Part Two

July 5, 2026August 24, 2014 by Brotman Law

Franchise Tax Board Protest Process

Taxpayers must file a Franchise Tax Board protest with the Franchise Tax Board, Protest Section, Sacramento, CA 95867. The protest can be filed either on FTB’s Form 3531 PROTEST or in the form of a detailed letter.

Key Takeaways

Taxpayers must file a Franchise Tax Board protest with the Franchise Tax Board, Protest Section, Sacramento, CA 95867. The protest can be filed either on FTB’s Form 3531 PROTEST or in the form of a detailed letter.
The taxpayer can request an informal oral hearing conducted in Sacramento or at one of other FTB’s California offices.
In most cases, a Franchise Tax Board protest is undocketed, although some are docketed. Docketed protests are those involving some legal question concerning assessed deficiency amount which has never been decided by court.

Franchise Tax Board Protests – Part One

July 5, 2026August 24, 2014 by Brotman Law

Franchise Tax Board Protests – Requirements of a Valid Protest

The California Revenue and Taxation Code provides that a taxpayer who disagrees with additional tax assessment can file with the Franchise Tax Board a written protest against the proposed additional tax. Protest letter must be filed with FTB within 60 days after notice of additional tax was mailed by FTB to taxpayer. Please note that clock starts ticking from the date of the notice mailing, not when taxpayer receives it. This letter notice is called the Notice of Proposed Assessment (NPA), and it contains a description of procedures to file a protest.

Key Takeaways

The California Revenue and Taxation Code provides that a taxpayer who disagrees with additional tax assessment can file with the Franchise Tax Board a written protest against the proposed additional tax.
The letter must state the taxpayer’s name, account number, and tax year.
An FTB employee compares the date the protest was received at Franchise Tax Board with the date of the NPA to determine that the protest was timely filed. Franchise Tax Board protests must be filed within 60 days of the date of the NPA.

Employment Development Department Offer in Compromise – Part One

July 5, 2026August 24, 2014 by Brotman Law

California Employment Development Department (EDD), like FTB, offers its own Offer in Compromise Program. Article 8, Sections 1870-1875 of the California Unemployment Insurance Code (CUIC) governs the EDD’s Offer in Compromise program. This law permits the EDD to receive applications for Offers in Compromise that may enable a qualified tax debtor to eliminate an employment tax liability at less than full value.

Key Takeaways

California Employment Development Department (EDD), like FTB, offers its own Offer in Compromise Program. Article 8, Sections 1870-1875 of the California Unemployment Insurance Code (CUIC) governs the EDD’s Offer in Compromise program.
A business must be inactive and inoperative to qualify for EDD’s Offer in Compromise. An owner, partner or an individual assessed under Section 1735 of the CUIC may apply for offer in compromise.
Only non-disputed, final tax liabilities will be considered for compromise. Liabilities currently under petition or bankruptcy will not be considered by EDD.

Employment Development Department Offer in Compromise Part Two

July 5, 2026August 24, 2014 by Brotman Law

To fill out the form applicant will need social security number and EDD number. Applicant will need to provide reasonable offer and explain why offer should be accepted by EDD. Additionally, the form requires full financial disclosure, including information about community property. The application must be accompanied by cash, cashiers check or money order equal to amount offered. If applicant cannot pay the full amount at the time of offer, EDD may permit to pay the agreed amount in installments within no more than five-year period. When applicant submits payment with application, in the event an offer is not accepted, the amount will either be applied to the liability or refunded, at the discretion of the applicant submitting the offer. A determination by the EDD that it would not be in the best interest of the State to accept partial payment in satisfaction of a tax liability will not be subject to administrative appeal or judicial review. A separate application must be submitted for each EDD account to be compromised.

Key Takeaways

To fill out the form applicant will need social security number and EDD number. Applicant will need to provide reasonable offer and explain why offer should be accepted by EDD.
Once applicant-taxpayer satisfies the compromise agreement, EDD will notify him or her, in writing, that the terms of the compromise agreement have been fulfilled and all liens filed or recorded, or both, against the individual’s interests have been released.
Once the terms of the compromise agreement are fulfilled, including payment of the amount offered, the liability will be considered satisfied in full and all tax liens filed or recorded, or both, will be released.

California Payroll Tax Settlements

May 25, 2026August 24, 2014 by Brotman Law

California EDD offers taxpayers tax settlement program, where EDD and taxpayer can settle a claim for less than the amount owed. EDD can settle if it evaluates costs and risks associated with the litigation of the case and determines that it is better and less expensive for EDD to settle for lower amount than to litigate in court. The Settlements Program allows an employer the opportunity to enter into a settlement agreement to also avoid the cost of prolonged litigation associated with resolving a disputed employment tax matter.

Key Takeaways

California EDD offers taxpayers tax settlement program, where EDD and taxpayer can settle a claim for less than the amount owed.
When reviewing an offer, the EDD will consider the risk of loss for the State and the cost of litigation balanced against the benefits of reaching a settlement agreement.
Upon approval of the settlement offer, the employer and the EDD will enter into a settlement agreement. All settlement agreements are subject to approval by an administrative law judge, and some require approval by the CUIAB and/or the Attorney General.

California Employment Development Department Notice of Levy

July 5, 2026August 23, 2014 by Brotman Law

Key Takeaways

The Unemployment Insurance Code (UIC) section §1755 directs that the Notice of Levy must be served on taxpayer in person or by certified mail not later than three years after the required payment o…
Please note that EDD will not automatically release a Notice when the taxpayer files bankruptcy after the Notice is served.
To release or modify Notice of Levy , EDD uses form DE 8016 .

The California Employment Development Department can issue a Notice of Levy to attach the credits or personal property of any delinquent account, either active or inactive.

The Notice of Levy may be made upon financial institutions, including banks, credit unions, trust companies, savings and loan institutions. For these institutions, the Notice requires that any funds held at the time of receipt of the Notice be remitted to the Employment Development Department.
Notice can be imposed on the third party accounts receivable. In such cases a third party is served with the Notice and must surrender assets within five days after the assets are payable to taxpayer.
Notice can be served on Credit card Processors and it will remain in force for one year, and can be renewed.

Correction of Franchise Tax Board Notices

July 5, 2026August 23, 2014 by Brotman Law

Sometimes a Notice of Proposed Assessment may require corrections when new information is received from taxpayer. After a Notice of Proposed Assessment has been issued, and the taxpayer submits supplemental information leading to correction of the assessment, the FTB makes the correction. Depending on the circumstances, the assessment may be corrected by a second Notice of Action or a Notice of Revision; it may be withdrawn and a new NPA (Notice of Proposed Assessment) issued; or in the case of protested NPAs, it may be restored to protest status.

Key Takeaways

Sometimes a Notice of Proposed Assessment may require corrections when new information is received from taxpayer.
If taxpayer does not protest the NPA, FTB must issue a Notice of Revision prior to the expiration of 60-day protest period or within the prescribed time if assessment is deferred, which can vary.
In the case when Notice of Proposed Assessment is protested by a taxpayer, and a Notice of Action has already been issued, FTB must mail a corrected Notice of Action within the 30-day appeal period.

California Interagency Offer in Compromise

July 5, 2026August 23, 2014 by Brotman Law

California streamlined offer in compromise process where now a single application can be used for three different agencies The Board of Equalization (BOE), Employment Development Department (EDD) and Franchise Tax Board (FTB). The application is located at https://www.edd.ca.gov/pdf_pub_ctr/de999ca.pdf. Just like before, taxpayers can apply for offer in compromise program when they are unable to pay their full tax liabilities to the state. The program allows taxpayers to negotiate a reduced amount of their non-disputed tax liabilities. The state will consider an Offer In Compromise when it is unlikely that the tax liability can be collected in full and the amount offered reasonably reflects collection potential. However, previously California taxpayers had to submit a separate form to each of the three agencies. Now, they can submit a single interagency application with the state, and all three agencies will coordinate offer in compromise process among themselves. The form is available online at the California Tax Service Center (www.taxes.ca.gov), as well as at each of the three tax departments’ Website’s (BOE www.boe.ca.gov, EDD www.edd.ca.gov, FTB www.ftb.ca.gov). The individual agencies must still negotiate each Offer in Compromise separately for their respective taxes. For example, FTB will negotiate with taxpayer a state income tax liability and Board of Equalization will negotiate a sales or use tax liability.

Key Takeaways

California streamlined offer in compromise process where now a single application can be used for three different agencies The Board of Equalization (BOE), Employment Development Department (EDD) and Franchise Tax Board (FTB).
Generally, respective agency rules regarding offer in compromise program did not change significantly. However, some recent changes have been made.
Like before, three agencies will not initiate tax collection activity while offer is pending.

California Payroll Tax Settlements

May 25, 2026August 23, 2014 by Brotman Law

Key Takeaways

California EDD offers taxpayers tax settlement program, where EDD and taxpayer can settle a claim for less than the amount owed.
When reviewing an offer, the EDD will consider the risk of loss for the State and the cost of litigation balanced against the benefits of reaching a settlement agreement.
Upon approval of the settlement offer, the employer and the EDD will enter into a settlement agreement. All settlement agreements are subject to approval by an administrative law judge, and some require approval by the CUIAB and/or the Attorney General.