California Tax Refund, form or booklet number for

I could not find the California FTB equivalent of IRS form 843 abatement of penalty. A simple letter with the necessary attachments might work. It's a good idea to quote which section of the taxation code you are interested in so that it gets routed to the right person, and perhaps also to mention that you could not find the CA form for abatement of penalty like IRS form 843. In this case, I think the section is 19131 where you show that the failure is "due to reasonable cause and not due to willful neglect".

19131. (a) If any taxpayer fails to make and file a return required by this part on or before the due date of the return or the due date as extended by the Franchise Tax Board, then, unless it is shown that the failure is due to reasonable cause and not due to willful neglect, 5 percent of the tax shall be added to the tax for each month or fraction thereof elapsing between the due date of the return (determined without regard to any extension of time for filing) and the date on which filed, but the total penalty may not exceed 25 percent of the tax. In the case of a commencing corporation, the penalty shall apply to all tax accruable on the due date of the return. The penalty so added to the tax shall be due and payable upon notice and demand from the Franchise Tax Board.

Seems the interest on the penalty should I think also be abated. There is a section (f) though I'm not sure where (a)(2)(B) is.

(f) No interest shall accrue on the portion of the penalty prescribed in subparagraph (B) of paragraph (2) of subdivision (a).

Were you continuously hospitalized, or unable to leave your home for the last 1.5 years due to illness? Such circumstances would probably be considered reasonable cause for failing to file during a 1.5 year period.

Sounds right -- according to the audit procedures manual from FTB regarding waiver of failure to file penalty:

"This penalty can be waived if the taxpayer submits a written statement listing the facts which support reasonable cause for failing to file the return by the original due date."

One of the generally acceptable reasons given is:

"Death, or severe illness of the taxpayer"

-Mark Bole

Death of the taxpayer generally does NOT need a statement. It is surmised by the name entry (followed by the date of death) and the naming of an executor, or on a paper return, a "by surviving spouse" signature.

Generally, yes. But I was quoting California tax auditor instructions regarding reasonable cause for waiving a failure to file (FTF) penalty.

I'm not sure CA will automatically waive the FTF penalty just because the state income tax return has some kind of indication that the taxpayer is deceased.

-Mark Bole

The IRS generally will. Such was policy when I worked there in the 90's.

Good to know. Unfortunately for the OP, he was just ill, not deceased, so showing reasonable cause for failure to file (FTF) will involve some additional statements, I suppose.

-Mark Bole

Unfortunately?

Oh, never mind.....

I thought about that after I hit send, almost replied to my own post, but then I realized I could count on this group to not miss a beat!

-Mark Bole

Speaking of which, I recall a while ago someone mentioned that the three year statute of limitations for claiming refunds could be waived if there are sufficient health related grounds.

Do you know the statute, rule or ruling that says that? I haven't been able to find it.

Thanks.

Fortunately. Uh, unfortunately. Oh, whatever!

For federal, there is IRS Rev. Proc. 99?21. Not sure if Calif. has anything similar (haven't looked).

There was a thread on this topic a few years ago which you should be able to read from Google Groups archive copy at the following URL. Interesting commentary on the legislative history...

[excerpt from rev. proc.] .02 Section 6511(h), as added by § 3202 of the Internal Revenue Service Restructuring and Reform Act of 1998, Pub. L. No. 105?206, 112 Stat. 685 (July 22, 1998), suspends the statute of limitations period for filing a claim for credit or refund under § 6511(a) for any period of an individual taxpayer?s life during which the taxpayer is unable to manage the taxpayer?s financial affairs because of a medically determinable mental or physical impairment that can be expected to result in death, or has lasted (or can be expected to last) for a continuous period of not less than 12 months. Further, a taxpayer is not considered to be financially disabled during any period in which the taxpayer?s spouse or any other person is authorized to act on behalf of the taxpayer in financial matters. Section 6511(h)(2)-(A) requires that proof of the taxpayer?s financial disability be furnished to the Internal Revenue Service. [end excerpt]

-Mark Bole

Thanks Mark - exactly what I was looking for.

It would have been a good time to spend a year dead for tax purposes.

Seth

I guess that's sort of like saying that if you have assets worth more than $1,000,000 the best estate planning technique for you is to die in 2010.