Since the 1950s, the Franchise Tax Board (FTB) has contacted people who earned income in California but did not file a tax return. The letters are sent throughout the year, starting in January. Last year, FTB collected more than $715 million through this effort, helping to ensure everyone pays their fair share.
Each year, FTB receives more than 500 million income records from banks, employers, state government, the IRS, and other third parties. FTB matches these income records against its database of tax returns. The program detects others who earned income but did not file a return through sources such as occupational licenses and mortgage interest payments.
Those contacted by FTB have 30 days to file a state tax return or show why one is not required. For those who do not respond, FTB estimates a tax bill based on income records. The assessment includes interest, fees, and penalties that can total as much as 50 percent of the tax due.
Some taxpayers might not have filed because they earned too little. But these taxpayers also may want to file returns. If they had too much withheld from wages or overpaid estimated taxes, filing a return is the only way to get a refund.
State tax law allows taxpayers four years to claim a refund. For 2010 returns, that window generally closes on April 15, 2015. There is no penalty for filing a late return that qualifies for a refund.
FTB provides more information for those receiving a letter at ftb.ca.gov. Taxpayers can search for: Respond to request/demand for tax return. Using this online service, individuals can request more time to reply, retrieve information that can assist in filing a tax return, request tax forms, learn about payment options, sign up to receive an email reminder to file, and access other services. They can also call FTB at 866.204.7902.
The deadline to file a 2013 state tax return was October 15, 2014. Last year, California taxpayers filed more than 16 million tax returns for the 2013 tax year.
