QUESTION
How many years can the state of California Franchise Tax Board go back to amend a tax return?
Asked on Sep 26th, 2013 on Taxation - California
More details to this question:
The California FTB snet me a notice that I owe $850 from a 2010 tax return in which they just now found a mathematical error. Apparently, number was subtracted instead of added. I have not yet pulled the return to verify. I am facing severe financial hardship right now, and if there is a way out of this by a "statute of limitations" issue, I would like to take advantage of that.
1 ANSWER
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Generally, the Franchise Tax Board has 4 years to propose an increased tax assessment. This 4 year period begins on the date the return is due or the date of filing, whichever is later.
Your 2010 return was due April 15, 2011, without an extension to file. Therefore, the state has until April 15, 2015, at a minimum, to propose an increase tax assessment.
If you are unable to pay the additional liability plus penalties and interest, you may request Currently Not Collectible or Hardship Status. Penalties and interest continue to accrue, but the Franchise Tax Board will not attempt to collect by bank or wage levy.
Of course, review the proposed assessment with your tax preparer as soon as possible to preserve your right to appeal if necessary.
Answered on Sep 27th, 2013 at 3:34 PM