Published: 2015-07-09
Key Benefits:
(a) Every individual taxable under Part 10 (commencing with Section 17001) shall make a return to the Franchise Tax Board, stating specifically the items of the individual’s gross income from all sources and the deductions and credits allowable, if the individual has any of the following for the taxable year:
(1) An adjusted gross income from all sources in excess of eight thousand dollars ($8,000), if single.
(2) An adjusted gross income from all sources in excess of sixteen thousand dollars ($16,000), if married.
(3) A gross income from all sources in excess of ten thousand dollars ($10,000), if single, and twenty thousand dollars ($20,000), if married, regardless of the amount of adjusted gross income.
(4) In the case of an individual described in Section 63(c)(5) of the Internal Revenue Code, relating to limitation on basic standard deduction in the case of certain dependents, a gross income from all sources that exceeds the amount of the standard deduction allowed under that section.
(b) If a husband and wife have for the taxable year an adjusted gross income from all sources in excess of sixteen thousand dollars ($16,000) or a gross income from all sources in excess of twenty thousand dollars ($20,000), each shall make a return or the income of each shall be included on a single joint return as otherwise provided in this article.
(c) For any individual described in paragraph (1) or (2), the Franchise Tax Board shall recompute the amounts provided in subdivision (b) and paragraphs (1) to (3), inclusive, of subdivision (a) as follows:
(1) For any individual eligible to claim the credit described in subdivision (c) of Section 17054, the Franchise Tax Board shall increase the income amounts described in subdivision (b) and paragraphs (1) to (3), inclusive, of subdivision (a), as adjusted by subdivision (d), by the quotient provided by dividing the credit described in subdivision (c) of Section 17054, as adjusted in subdivision (i) of Section 17054, by 2 percent.
(2) For any individual or married couple eligible to claim the credit described in subdivision (d) of Section 17054, the Franchise Tax Board shall increase the income amounts described in subdivision (b) or paragraphs (1) to (3), inclusive, of subdivision (a), as adjusted by subdivision (d), by the quotient provided by dividing each credit described in subdivision (d) of Section 17054, as adjusted in subdivision (i) of Section 17054, by the following:
(A) If the individual or married couple is not eligible to claim the credit allowed in subdivision (c) of Section 17054, 3 percent for the first dependent credit and 4 percent for the second dependent credit, if any.
(B) If the individual or married couple is eligible to claim the credit allowed in subdivision (c) of Section 17054, 4 percent for the first dependent credit and 5 percent for the second dependent credit, if any.
(d) For each taxable year beginning on or after January 1, 1996, the Franchise Tax Board shall recompute the income amounts prescribed in paragraphs (1) to (3), inclusive, of subdivision (a) and in subdivision (b), as follows:
(1) The Department of Industrial Relations shall transmit annually to the Franchise Tax Board the percentage change in the California Consumer Price Index for all items from June of the prior calendar year to June of the current calendar year, no later than August 1 of the current calendar year.
(2) The Franchise Tax Board shall do both of the following:
(A) Compute an inflation adjustment factor by adding 100 percent to the percentage change figure that is furnished pursuant to paragraph (1) and dividing the result by 100.
(B) Multiply the income amounts for the preceding taxable year by the inflation adjustment factor determined in subparagraph (A) and round off the resulting products to the nearest one dollar ($1).
(e) The changes to subdivision (c) made by the act adding this subdivision shall apply to each taxable year beginning on or after January 1, 1999.
(Amended by Stats. 1999, Ch. 196, Sec. 1. Effective January 1, 2000.)
Every fiduciary (except a receiver appointed by authority of law in possession of only a part of the property of an individual) taxable under Part 10 (commencing with Section 17001) shall make a return, which shall contain or be verified by a written declaration that it is made under the penalties of perjury, for any of the following taxpayers for whom he or she acts, stating specifically the items of gross income of the taxpayer and the deductions and credits allowed for the taxable year:
(a) Every individual having an adjusted gross income from all sources in excess of eight thousand dollars ($8,000), if single.
(b) Every individual having an adjusted gross income from all sources in excess of sixteen thousand dollars ($16,000), if married.
(c) Every individual having a gross income from all sources in excess of ten thousand dollars ($10,000), if single, and twenty thousand dollars ($20,000), if married, regardless of the amount of adjusted gross income.
(d) Every estate having a net income from all sources in excess of one thousand dollars ($1,000).
(e) Every trust (not treated as a corporation under Section 23038) having a net income from all sources in excess of one hundred dollars ($100).
(f) Every estate or trust (not treated as a corporation under Section 23038) having a gross income from all sources in excess of ten thousand dollars ($10,000), regardless of the amount of the net income.
(g) Every decedent, for the year in which death occurred, and for prior years, if returns for those years should have been filed but have not been filed by the decedent, under the rules and regulations that the Franchise Tax Board may prescribe.
(Amended by Stats. 2000, Ch. 863, Sec. 3. Effective January 1, 2001.)
If an individual is deceased, the return of that individual required under Section 18501 shall be made by his or her executor, administrator, or other person charged with property of that decedent.
(Added by Stats. 2000, Ch. 863, Sec. 4. Effective January 1, 2001.)
If an individual is unable to make a return required under Section 18501, the return of that individual shall be made by a duly authorized agent, his or her committee, guardian, fiduciary, or other person charged with the care of the person or property of the individual. The preceding sentence shall not apply in the case of a receiver appointed by authority of law in possession of only a part of the property of an individual.
(Added by renumbering Section 18503 by Stats. 2000, Ch. 863, Sec. 1. Effective January 1, 2001.)
A trust that qualifies under Section 401(a) of the Internal Revenue Code and which is exempt is not required to file a return unless it changes the character of its organization, the purpose for which it was organized, or its method of operation or unless the trust has unrelated business taxable income. Where an exempt trust has unrelated business taxable income which exceeds one thousand dollars ($1,000) it shall file a return, verified by an executive officer under penalties of perjury in the form prescribed by the Franchise Tax Board on or before the 15th day of the fourth month following the close of the taxable year.
(Added by Stats. 1993, Ch. 31, Sec. 26. Effective June 16, 1993. Operative January 1, 1994, by Sec. 83 of Ch. 31.)
(a) Returns of an estate, a trust, or an estate of an individual under Chapter 7 or Chapter 11 of Title 11 of the United States Code shall be made by the fiduciary thereof.
(b) Under the rules and regulations that the Franchise Tax Board may prescribe, a return made by one of two or more joint fiduciaries shall be sufficient compliance with the requirements of Section 18501. A return made pursuant to this subdivision shall contain a statement that the fiduciary has sufficient knowledge of the affairs of the person for whom the return is made to enable him or her to make the return, and that the return is, to the best of his or her knowledge and belief, true and correct.
(Amended by Stats. 2000, Ch. 863, Sec. 6. Effective January 1, 2001.)
Any fiduciary required to make a return under Section 18505 is subject to all the provisions of Part 10 (commencing with Section 17001) and this part that apply to individuals.
(Added by Stats. 1993, Ch. 31, Sec. 26. Effective June 16, 1993. Operative January 1, 1994, by Sec. 83 of Ch. 31.)
(a) (1) The Franchise Tax Board shall revise the returns required to be filed pursuant to this article, Article 2 (commencing with Section 18601), Section 18633, Section 18633.5, and Article 3 (commencing with Section 23771) of Chapter 4 of Part 11, and the accompanying instructions for filing those returns, in a form and manner approved by the State Board of Equalization, to allow a person to report and pay qualified use tax in accordance with the provisions of Section 6452.1.
(2) Within 10 working days of receiving from the Franchise Tax Board the returns and instructions described in paragraph (1), the State Board of Equalization shall do either of the following:
(A) Approve the form and manner of the returns and instructions and notify the Franchise Tax Board of this approval.
(B) Submit comments to the Franchise Tax Board regarding changes to the returns and instructions that shall be incorporated before the State Board of Equalization approves the form and manner of the returns and instructions.
(b) (1) Of payments and credits shown on the return, together with any other credits associated with that person’s tax year, of a person that reports qualified use tax on an acceptable tax return, an amount equal to the qualified use tax liability reported on that acceptable tax return in accordance with Section 6452.1 shall be applied to that liability.
(2) This subdivision shall apply to returns filed for taxable years beginning on or after January 1, 2015.
(c) The Franchise Tax Board shall transfer the qualified use tax received pursuant to Section 6452.1, and any information the State Board of Equalization deems necessary for its administration of the use tax, to the State Board of Equalization within 60 days from the date the use tax is received or the acceptable tax return is processed, whichever is later.
(d) Except as otherwise provided, this section shall be operative for returns filed for taxable years beginning on and after January 1, 2010.
(e) The amendments made by Chapter 14 of the Statutes of 2011 shall apply to returns filed for taxable years beginning on and after January 1, 2011.
(Amended by Stats. 2014, Ch. 541, Sec. 2. Effective January 1, 2015.)
(a) (1) Except as otherwise provided in this section, an individual shall use the same filing status that he or she used on his or her federal income tax return filed for the same taxable year.
(2) If the Franchise Tax Board determines that the filing status used on the taxpayer’s federal income tax return was incorrect, the Franchise Tax Board may, under Section 19033 (relating to deficiency assessments), revise the return to reflect a correct filing status.
(3) If either spouse or domestic partner was a nonresident for any portion of the taxable year, and the couple files a joint federal income tax return, the spouses or domestic partners shall be required to file a joint nonresident return.
(b) In the case of an individual who is not required to file a federal income tax return for the taxable year, that individual may use any filing status on the return required under this part that he or she would be eligible to use on a federal income tax return for the same taxable year if a federal income tax return was required.
(c) Notwithstanding subdivision (a), spouses and registered domestic partners, as described in Section 297 of the Family Code, who are registered as domestic partners as of the close of the taxable year, may file separate returns under this part if either spouse or registered domestic partner was either of the following during the taxable year:
(1) An active member of the Armed Forces or any auxiliary branch thereof.
(2) A nonresident for the entire taxable year who had no income from a California source.
(d) Notwithstanding subdivision (a), registered domestic partners, as described in Section 297 of the Family Code, who are registered as domestic partners as of the close of the taxable year and who are prohibited under federal law from filing a joint federal income tax return, shall either file a joint state income tax return or separate state income tax returns by applying the standards applicable to spouses who file separately pursuant to Section 6013 of the Internal Revenue Code. A separate return filed by a domestic partner of a registered domestic partnership shall be subject to the same conditions and limitations applicable to the separate return of a spouse.
(e) Except for taxpayers described in subdivision (c), for any taxable year with respect to which a joint return has been filed, a separate return shall not be made by either spouse or domestic partner after the period for either to file a separate return has expired.
(f) No joint return shall be made if the spouses or the domestic partners have different taxable years; except that if their taxable years begin on the same day and end on different days because of the death of either or both, then a joint return may be made with respect to the taxable year of each. The above exception shall not apply if the surviving spouse remarries or the surviving domestic partner enters into a new domestic partnership before the close of his or her taxable year, or if the taxable year of either spouse or domestic partner is a fractional part of a year under Section 443(a) of the Internal Revenue Code.
(g) In the case of the death of one spouse or domestic partner or both spouses or both domestic partners the joint return with respect to the decedent may be made only by the decedent’s executor or administrator; except that, in the case of the death of one spouse or domestic partner, the joint return may be made by the surviving spouse or surviving domestic partner with respect to both that spouse or domestic partner and the decedent if no return for the taxable year has been made by the decedent, no executor or administrator has been appointed, and no executor or administrator is appointed before the last day prescribed by law for filing the return of the surviving spouse or surviving domestic partner. If an executor or administrator of the decedent is appointed after the making of the joint return by the surviving spouse or surviving domestic partner, the executor or administrator may disaffirm the joint return by making, within one year after the last day prescribed by law for filing the return of the surviving spouse or surviving domestic partner, a separate return for the taxable year of the decedent with respect to which the joint return was made, in which case the return made by the survivor shall constitute his or her separate return.
(Amended by Stats. 2006, Ch. 802, Sec. 4. Effective January 1, 2007.)
If an individual has filed a separate return for a taxable year for which a joint return could have been made by him or her and his or her spouse under Section 18521, and the time prescribed for filing the return for that taxable year has expired, that individual and his or her spouse may nevertheless make a joint return for that taxable year, provided a joint federal income tax return is made under the provisions of Section 6013(b) of the Internal Revenue Code. A joint return filed by the husband and wife in that case shall constitute the return of the husband and wife for that taxable year, and all payments, credits, refunds, or other repayments made or allowed with respect to the separate return of either spouse for that taxable year shall be taken into account in determining the extent to which the tax based upon the joint return has been paid.
(Added by Stats. 1993, Ch. 31, Sec. 26. Effective June 16, 1993. Operative January 1, 1994, by Sec. 83 of Ch. 31.)
If a joint return is made under Section 18522, any election (other than the election to file a separate return) made by either spouse in his or her separate return for the taxable year with respect to the treatment of any income, deduction, or credit of the spouse shall not be changed in the making of the joint return where the election would have been irrevocable if the joint return had not been made.
(Added by Stats. 1993, Ch. 31, Sec. 26. Effective June 16, 1993. Operative January 1, 1994, by Sec. 83 of Ch. 31.)
If a joint return is made under Section 18522 after the death of either spouse, the return with respect to the decedent may be made only by his or her executor or administrator.
(Added by Stats. 1993, Ch. 31, Sec. 26. Effective June 16, 1993. Operative January 1, 1994, by Sec. 83 of Ch. 31.)
A joint return may not be made under Section 18522 in any of the following situations:
(a) After the expiration of four years from the last date prescribed by law for filing the return for the taxable year (determined without regard to any extension of time granted to either spouse).
(b) After there has been mailed to either spouse, with respect to the taxable year, a notice of deficiency under Section 19033, if the spouse, as to that notice, files a protest under Section 19041 or appeal under Section 19045.
(c) After either spouse has commenced a suit in any court for the recovery of any part of the tax for that taxable year.
(d) After either spouse has entered into a closing agreement under Section 19441 with respect to the taxable year.
(Added by Stats. 1993, Ch. 31, Sec. 26. Effective June 16, 1993. Operative January 1, 1994, by Sec. 83 of Ch. 31.)
For the purposes of Article 1 (commencing with Section 19301) of Chapter 6 (relating to refunds and credits), a joint return made under Section 18522 shall be deemed to have been filed on the last date prescribed for filing the return for the taxable year (determined without regard to any extension of time granted to either spouse).
(Added by Stats. 1993, Ch. 31, Sec. 26. Effective June 16, 1993. Operative January 1, 1994, by Sec. 83 of Ch. 31.)
(a) For the purposes of Sections 19057 to 19067, inclusive (relating to period of limitations upon assessment and collection), and for the purposes of Section 19131 (relating to delinquent returns), a joint return made under Section 18522 shall be deemed to have been filed as follows:
(1) Where both spouses filed separate returns prior to making the joint return, on the date the last separate return was filed (but not earlier than the last date prescribed by this part for filing the return of either spouse).
(2) Where one spouse filed a separate return prior to the making of the joint return, and the other spouse had eight thousand dollars ($8,000) or less of adjusted gross income from all sources and ten thousand dollars ($10,000) or less of gross income from all sources for the taxable year, on the date of the filing of the separate return (but not earlier than the last date prescribed by this part for the filing of the separate return).
(3) Where only one spouse filed a separate return prior to the making of a joint return and the other spouse had an adjusted gross income from all sources in excess of eight thousand dollars ($8,000) or a gross income from all sources in excess of ten thousand dollars ($10,000) for the taxable year, on the date of the filing of the joint return.
(b) For purposes of Article 1 (commencing with Section 19301) of Chapter 6, a joint return made under Section 18522 shall be deemed to have been filed on the later of the last date prescribed by this part for filing the return for the taxable year (determined without regard to any extension of time granted to either spouse) or the date the later timely filed separate return was filed.
(Amended by Stats. 2000, Ch. 863, Sec. 7. Effective January 1, 2001.)
If a joint return is made under Section 18522, the period of limitations provided in Sections 19057 to 19067, inclusive, on the making of assessments and collecting taxes shall with respect to that return include one year immediately after the date of the filing of the joint return (computed without regard to Section 18528).
(Added by Stats. 1993, Ch. 31, Sec. 26. Effective June 16, 1993. Operative January 1, 1994, by Sec. 83 of Ch. 31.)
Where the amount shown as the tax by the husband and wife on a joint return made under Section 18522 exceeds the aggregate of the amounts shown as the tax upon the separate return of each spouse, each of the following shall apply:
(a) If any part of the excess is attributable to negligence or intentional disregard of rules and regulations (but without intent to defraud) at the time of the making of the separate return, then 20 percent of the total amount of the excess shall be assessed, collected and paid, in lieu of the 20 percent addition to the tax provided in subdivision (a) of Section 19164.
(b) If any part of the excess is attributable to fraud with intent to evade tax at the time of the making of the separate return, then 75 percent of the total amount of the excess shall be assessed, collected and paid, in lieu of the 75 percent addition to the tax provided in subdivision (b) of Section 19164.
(Added by Stats. 1993, Ch. 31, Sec. 26. Effective June 16, 1993. Operative January 1, 1994, by Sec. 83 of Ch. 31.)
For the purposes of Chapter 9 (commencing with Section 19701) which relates to criminal penalties in the case of fraudulent returns, the term “return” includes a separate return filed by a spouse with respect to a taxable year for which a joint return is made under Section 18522 after the filing of the separate return.
(Added by Stats. 1993, Ch. 31, Sec. 26. Effective June 16, 1993. Operative January 1, 1994, by Sec. 83 of Ch. 31.)
For purposes of Section 443 of the Internal Revenue Code, where the husband and wife have different taxable years because of the death of either spouse, the joint return shall be treated as if the taxable years of both spouses ended on the date of the closing of the surviving spouse’s taxable year.
(Added by Stats. 2000, Ch. 863, Sec. 8. Effective January 1, 2001.)
For the purposes of this article, each of the following shall apply:
(a) The status as husband and wife of two individuals having taxable years beginning on the same day shall be determined as follows:
(1) If both have the same taxable year, then as of the close of that year.
(2) If one dies before the close of the taxable year of the other, then as of the time of the death.
(b) An individual who is legally separated from his or her spouse under a decree of divorce or of separate maintenance shall not be considered as married.
(c) If a joint return is made, the tax shall be computed on the aggregate income and the liability with respect to the tax shall be joint and several.
(Amended by Stats. 2000, Ch. 863, Sec. 9. Effective January 1, 2001.)
(a) (1) Notwithstanding subdivision (a) and the first sentence of subdivision (b) of Section 19006:
(A) An individual who has made a joint return may elect to seek relief under the procedures prescribed under subdivision (b), and
(B) If the individual is eligible to elect the application of subdivision (c), the individual may, in addition to any election under subparagraph (A), elect to limit the individual’s liability for any deficiency with respect to the joint return in the manner prescribed under subdivision (c).
(2) Any determination under this section shall be made without regard to community property laws.
(b) (1) Under procedures prescribed by the Franchise Tax Board, if—
(A) A joint return has been made under this chapter for a taxable year,
(B) On that return there is an understatement of tax attributable to erroneous items of one individual filing the joint return,
(C) The other individual filing the joint return establishes that in signing the return he or she did not know of, and had no reason to know of, that understatement,
(D) Taking into account all facts and circumstances, it is inequitable to hold the other individual liable for the deficiency in tax for that taxable year attributable to that understatement, and
(E) The other individual elects (in the form and manner as the Franchise Tax Board may prescribe) the benefits of this subdivision not later than the date that is two years after the date the Franchise Tax Board has begun collection activities with respect to the individual making the election,
then the other individual shall be relieved of liability for tax (including interest, penalties, and other amounts) for that taxable year to the extent that the liability is attributable to that understatement.
(2) If an individual who, but for subparagraph (C) of paragraph (1), would be relieved of liability under paragraph (1), establishes that in signing the return the individual did not know, and had no reason to know, the extent of the understatement, then the individual shall be relieved of liability for tax (including interest, penalties, and other amounts) for that taxable year to the extent that the liability is attributable to the portion of the understatement of which that individual did not know and had no reason to know.
(3) For purposes of this subdivision, the term “understatement” has the meaning given to that term by Section 6662(d)(2)(A) of the Internal Revenue Code.
(c) (1) Except as provided in this subdivision, if an individual who has made a joint return for any taxable year elects the application of this subdivision, the individual’s liability for any deficiency that is assessed with respect to the return may not exceed the portion of the deficiency properly allocable to the individual under subdivision (d).
(2) Except as provided in clause (ii) of subparagraph (A) of paragraph (3) or subparagraph (C) of paragraph (3), each individual who elects the application of this subdivision shall have the burden of proof with respect to establishing the portion of any deficiency allocable to that individual.
(3) (A) (i) An individual shall only be eligible to elect the application of this subdivision if—
(I) At the time the election is filed, that individual is no longer married to, or is legally separated from, the individual with whom that individual filed the joint return to which the election relates, or
(II) That individual was not a member of the same household as the individual with whom the joint return was filed at any time during the 12-month period ending on the date the election is filed.
(ii) If the Franchise Tax Board demonstrates that assets were transferred between individuals filing a joint return as part of a fraudulent scheme by those individuals, an election under this subdivision by either individual shall be invalid (and subdivision (a) and the first sentence of subdivision (b) of Section 19006 shall apply to the joint return).
(B) An election under this subdivision for any taxable year shall be made not later than two years after the date on which the Franchise Tax Board has begun collection activities with respect to the individual making the election.
(C) If the Franchise Tax Board demonstrates that an individual making an election under this subdivision had actual knowledge, at the time the individual signed the return, of any item giving rise to a deficiency (or portion thereof) that is not allocable to the individual under subdivision (d), that election does not apply to that deficiency (or portion). This subparagraph does not apply where the individual with actual knowledge establishes that the individual signed the return under duress.
(4) (A) Notwithstanding any other provision of this subdivision, the portion of the deficiency for which the individual electing the application of this subdivision is liable (without regard to this paragraph) shall be increased by the value of any disqualified asset transferred to the individual.
(B) For purposes of this paragraph—
(i) The term “disqualified asset” means any property or right to property transferred to an individual making the election under this subdivision with respect to a joint return by the other individual filing the joint return if the principal purpose of the transfer was the avoidance of tax or payment of tax.
(ii) (I) For purposes of clause (i), except as provided in subclause (II), any transfer that is made after the date that is one year before the date on which the first notice of proposed assessment under Article 3 (commencing with Section 19031) of Chapter 4 is sent shall be presumed to have as its principal purpose the avoidance of tax or payment of tax.
(II) Subclause (I) does not apply to any transfer pursuant to a decree of divorce or separate maintenance or a written instrument incident to that decree or to any transfer that an individual establishes did not have as its principal purpose the avoidance of tax or payment of tax.
(d) For purposes of subdivision (c)—
(1) The portion of any deficiency on a joint return allocated to an individual shall be the amount that bears the same ratio to the deficiency as the net amount of items taken into account in computing the deficiency and allocable to the individual under paragraph (3) bears to the net amount of all items taken into account in computing the deficiency.
(2) If a deficiency (or portion thereof) is attributable to—
(A) The disallowance of a credit, or
(B) Any tax (other than tax imposed by Section 17041 or 17062) required to be included with the joint return, and the item is allocated to one individual under paragraph (3), that deficiency (or portion) shall be allocated to that individual. Any item so allocated may not be taken into account under paragraph (1).
(3) For purposes of this subdivision—
(A) Except as provided in paragraphs (4) and (5), any item giving rise to a deficiency on a joint return shall be allocated to individuals filing the return in the same manner as it would have been allocated if the individuals had filed separate returns for the taxable year.
(B) Under rules prescribed by the Franchise Tax Board, an item otherwise allocable to an individual under subparagraph (A) shall be allocated to the other individual filing the joint return to the extent the item gave rise to a tax benefit on the joint return to the other individual.
(C) The Franchise Tax Board may provide for an allocation of any item in a manner not prescribed by subparagraph (A) if the Franchise Tax Board establishes that the allocation is appropriate due to fraud of one or both individuals.
(4) If an item of deduction or credit is disallowed in its entirety solely because a separate return is filed, the disallowance shall be disregarded and the item shall be computed as if a joint return had been filed and then allocated between the spouses appropriately.
(5) If the liability of a child of a taxpayer is included on a joint return, that liability shall be disregarded in computing the separate liability of either spouse and that liability shall be allocated appropriately between the spouses.
(e) (1) In the case of an individual who elects to have subdivision (b) or (c) apply, or who requests equitable relief under subdivision (f)—
(A) (i) The determination of the Franchise Tax Board as to whether the liability is to be revised as to one individual filing the joint return shall be made not less than 30 days after notification of the other individual filing the joint return.
(ii) Any action taken under this section shall be treated as though it were action on a protest taken under Section 19044 and shall become final upon the expiration of 30 days from the date that notice of the action is mailed to both individuals filing the joint return, unless, within that 30-day period, the individual making the election under subdivision (b) or (c) or requesting equitable relief under subdivision (f) appeals the determination to the board as provided in clause (iii) or the other individual filing the joint return appeals the determination to the board as provided in Section 19045.
(iii) The individual making the election under subdivision (b) or (c) or requesting equitable relief under subdivision (f) may appeal the determination of the Franchise Tax Board of the appropriate relief available to the individual under this section if that appeal is filed during the 30-day period prescribed in clause (ii) and the appeal shall be treated as an appeal to the board under Section 19045. Notwithstanding the preceding sentence, the individual making the election under subdivision (b) or (c) or requesting equitable relief under subdivision (f) may appeal to the board at any time after the date that is six months after the date the election is filed with the Franchise Tax Board and before the close of the 30-day period prescribed in clause (ii).
(B) Except as otherwise provided in Section 19081 or 19082, no levy or proceeding in court shall be made, begun, or prosecuted against the individual making an election under subdivision (b) or (c) or requesting equitable relief under subdivision (f), for collection of any assessment to which the election relates until the expiration of the 30-day period described in clause (ii) of subparagraph (A), or, if an appeal to the board has been filed under clause (iii) or Section 19045, until the decision of the board has become final.
(2) The running of the period of limitations in Section 19371 on the collection of the assessment to which the petition under subparagraph (A) of paragraph (1) relates shall be suspended for the period during which the Franchise Tax Board is prohibited by subparagraph (B) of paragraph (1) from collecting by levy or a proceeding in court and for 60 days thereafter.
(3) (A) Except as provided in subparagraph (B), notwithstanding any other law or rule of law (other than Section 19306 and Article 6 (commencing with Section 19441) of Chapter 6), a credit or refund shall be allowed or made to the extent attributable to the application of this section.
(B) In the case of any election under subdivision (b) or (c) or request for equitable relief under subdivision (f), if a decision of the board in any prior proceeding for the same taxable year has become final, that decision shall be conclusive except with respect to the qualification of the individual for relief that was not an issue in that proceeding. The exception contained in the preceding sentence does not apply if the board determines that the individual participated meaningfully in the prior proceeding.
(C) No credit or refund shall be allowed as a result of an election under subdivision (c).
(f) Under procedures prescribed by the Franchise Tax Board, if taking into account all the facts and circumstances, it is inequitable to hold the individual liable for any unpaid tax or any deficiency (or any portion of either), and relief is not available to the individual under subdivision (b) or (c), the Franchise Tax Board may relieve the individual of that liability.
(g) (1) The Franchise Tax Board may prescribe regulations providing methods for allocation of items other than the methods under paragraph (3) of subdivision (d).
(2) It is the intent of the Legislature that, in construing this section and any other sections that are specifically cross-referenced in this section, any regulations that may be promulgated by the Secretary of the Treasury under Section 6015 of the Internal Revenue Code shall apply to the extent that those regulations do not conflict with this section or with any regulations that may be promulgated by the Franchise Tax Board.
(h) The amendments made by Section 5 of Chapter 931 of the Statutes of 1999 shall apply to any liability for tax arising after October 10, 1999, and any liability for tax arising on or before that date but remaining unpaid as of that date.
(i) (1) An individual who has made a joint return and has been granted relief under Section 6015 of the Internal Revenue Code, relating to joint and several liability with respect to a federal joint income tax return, shall be eligible for relief under this section if all of the following conditions are satisfied:
(A) The individual requests relief under this section.
(B) The facts and circumstances that apply to the understatement and liabilities for which the relief is requested are the same facts and circumstances that applied to the understatement and liabilities for which that individual was granted relief under Section 6015 of the Internal Revenue Code.
(C) The individual requesting relief under this subdivision furnishes the Franchise Tax Board with a copy of the federal determination granting that individual relief under Section 6015 of the Internal Revenue Code. If the federal determination does not clearly identify the issues and liabilities for which the individual was granted relief under Section 6015 of the Internal Revenue Code, the Franchise Tax Board may request, from the individual requesting relief, any supporting documentation reasonably necessary to substantiate that the issues and liabilities for which relief is requested under this section are the same as the issues and liabilities for which the individual received relief under Section 6015 of the Internal Revenue Code.
(2) This subdivision does not apply if, prior to the expiration of the 30-day period described in clause (i) of subparagraph (A) of paragraph (1) of subdivision (e), the other individual that filed the joint return for which the relief is requested under this subdivision submits information to the Franchise Tax Board that indicates that relief should not be granted. For purposes of this paragraph, “information that indicates that relief should not be granted” is limited to the following:
(A) Information that indicates that the facts and circumstances that apply to the understatement and liabilities for which the relief is requested are not the same facts and circumstances that applied to the understatement and liabilities for which that individual was granted relief under Section 6015 of the Internal Revenue Code.
(B) Information that indicates that there has not been a federal determination granting relief under Section 6015 of the Internal Revenue Code or that the federal determination granting relief under Section 6015 of the Internal Revenue Code has been modified, altered, withdrawn, canceled, or rescinded.
(C) Information indicating that the other individual, as described in the first sentence of this paragraph, did not have the opportunity to participate, within the meaning of Section 6015 of the Internal Revenue Code and the regulations thereunder, in the federal administrative or judicial proceeding that resulted in relief under Section 6015 of the Internal Revenue Code.
(j) If, prior to the date the Franchise Tax Board issues its determination with respect to a request for relief under this section, the individual requesting relief demonstrates to the Franchise Tax Board that a request for relief has been filed with the Internal Revenue Service pursuant to Section 6015 of the Internal Revenue Code and demonstrates that the request for relief involves the same facts and circumstances as the request for relief that is pending before the Franchise Tax Board, the Franchise Tax Board may not deny relief with respect to that request, in whole or in part, until federal action on the request for relief under Section 6015 of the Internal Revenue Code is final.
(k) An individual may not be granted relief under this section if a court has revised the tax liability in a proceeding for dissolution of the marriage in accordance with subdivision (b) of Section 19006.
(l) Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code shall not apply to any procedure or rule prescribed by the Franchise Tax Board pursuant to this section.
(m) (1) This section shall become operative on January 1, 2009.
(2) The provisions of subdivision (i) and (j), as amended by the act adding this paragraph, shall apply on and after January 1, 2009.
(3) The amendments made to subdivisions (e), (g), and (h) shall apply to requests for relief received on or after the effective date of the act adding this paragraph.
(Amended by Stats. 2010, Ch. 318, Sec. 1. Effective January 1, 2011.)
(a) Under regulations prescribed by the Franchise Tax Board, if:
(1) An individual does not file a joint return for any taxable year,
(2) That individual does not include in gross income for that taxable year an item of community income properly includable therein,
(3) The individual establishes that he or she did not know of, and had no reason to know of, that item of community income, and
(4) Taking into account all facts and circumstances, it is inequitable to include that item of community income in that individual’s gross income, then, for purposes of Part 10 (commencing with Section 17001) and this part, that item of community income shall be included in the gross income of the other spouse (and not in the gross income of the individual).
Under procedures prescribed by the Franchise Tax Board, if, taking into account all the facts and circumstances, it is inequitable to hold the individual liable for any unpaid tax or any deficiency (or any portion of either) attributable to any item for which relief is not available under the preceding sentence, the Franchise Tax Board may relieve the individual of that liability.
(b) The Franchise Tax Board may disallow the benefits of any community property law to any taxpayer with respect to any income if that taxpayer acted as if solely entitled to that income and failed to notify the taxpayer’s spouse before the due date (including extensions) for filing the return for the taxable year in which the income was derived of the nature and amount of that income.
(c) It is the intent of the Legislature that, in construing this section, any regulations that may be promulgated by the Secretary of the Treasury under Section 66(c) of the Internal Revenue Code, as amended by Public Law 105-206, shall apply to the extent that those regulations do not conflict with this section or with any regulations that may be promulgated by the Franchise Tax Board.
(d) The amendments made by the act adding this subdivision shall apply to any liability for tax arising after the effective date of the act adding this subdivision and any liability for tax arising on or before that date but remaining unpaid as of that date.
(Amended by Stats. 1999, Ch. 931, Sec. 6. Effective October 10, 1999.)
(a) In lieu of electing nonresident partners filing a return pursuant to Section 18501, the Franchise Tax Board may, pursuant to requirements and conditions set forth in forms and instructions, provide for the filing of a group return for one or more electing nonresident partners by a partnership doing business in, or deriving income from, sources in California. The tax rate or rates applicable to each electing partner’s distributive share shall consist of the highest marginal rate or rates provided by Part 10 (commencing with Section 17001) plus, in the case of any electing nonresident partner included on the group return who would be subject to Section 17043 when filing individually, an additional tax rate of 1 percent. Except as provided in subdivision (b), no deductions shall be allowed except those necessary to determine each partner’s distributive share, and no credits shall be allowed except those directly attributable to the partnership. As required by the Franchise Tax Board, the partnership as agent for the electing partners shall make the payments of tax, additions to tax, interest, and penalties otherwise required to be paid by the electing partners.
(b) Deductions provided by Chapter 5 (commencing with Section 17501) of Part 10, attributable to earned income of a partner derived from a partnership filing a group return on behalf of electing nonresident partners under subdivision (a), shall be allowed if the partner certifies, in the form and manner as the Franchise Tax Board may prescribe, that he or she has no earned income from any other source.
(c) This section shall also be applicable to a nonresident shareholder of a corporation which is treated as an “S” corporation under Chapter 4.5 (commencing with Section 23800) of Part 11. In that case, the provisions of subdivisions (a) and (b) are modified to refer to“shareholder or shareholders” in lieu of “partners” and to “S” corporation in lieu of “partnership.”
(d) This section shall also be applicable to a nonresident individual with a membership or economic interest in a limited liability company, registered limited liability partnership, or foreign limited liability partnership, which is classified as a partnership for California tax purposes. In that case, the provisions of subdivisions (a) and (b) are modified to refer to “holders of a membership or economic interest” in lieu of “partners” and to “limited liability companies” in lieu of “partnerships,” and “partnerships” shall include registered limited liability partnerships and foreign limited liability partnerships.
(e) The Franchise Tax Board may adjust the income of an electing nonresident taxpayer included in a group return filed under this section to properly reflect income under Part 10 (commencing with Section 17001), including Chapter 11 thereof (commencing with Section 17951), this part (commencing with Section 18401), and Part 11 (commencing with Section 23001), including Chapter 17 thereof (commencing with Section 25101).
(Amended by Stats. 2008, Ch. 751, Sec. 65. Effective September 30, 2008.)
(a) In lieu of electing nonresident directors filing a return pursuant to Section 18501, the Franchise Tax Board may, pursuant to requirements and conditions set forth in applicable forms and instructions, provide for the filing of a group return by a corporation for one or more electing nonresident individuals who receive wages, salaries, fees, or other compensation from that corporation for director services, including attendance of board of directors’ meetings that take place in this state. The tax rate or rates applicable to each director’s compensation for services performed in this state shall consist of highest marginal rate or rates provided for by Part 10 (commencing with Section 17001) of Division 2 plus, in the case of any electing nonresident director included on the group return who would be subject to Section 17043 when filing individually, an additional tax rate of 1 percent and no deductions or credits shall be allowed. As required by the Franchise Tax Board, the corporation, as the agent for the electing nonresident directors, shall make the payments of tax, additions to tax, interest, and penalties otherwise required to be paid by, or imposed on, the electing directors.
(b) The Franchise Tax Board may adjust the income of an electing nonresident taxpayer included in a group return filed under this section to properly reflect the income under Part 10 (commencing with Section 17001) of Division 2.
(Amended by Stats. 2008, Ch. 751, Sec. 66. Effective September 30, 2008.)
Notwithstanding any other provision of law, the Franchise Tax Board may design tax returns to provide for the designation of contributions to specified funds, as otherwise provided by law, on a separate schedule which shall be attached to the primary return form.
(Added by Stats. 1993, Ch. 31, Sec. 26. Effective June 16, 1993. Operative January 1, 1994, by Sec. 83 of Ch. 31.)
Section 13021 of the Unemployment Insurance Code sets forth requirements for the filing of returns and payment of tax by every employer required to withhold any personal income tax on wages.
(Added by Stats. 1993, Ch. 31, Sec. 26. Effective June 16, 1993. Operative January 1, 1994, by Sec. 83 of Ch. 31.)
Returns filed under this article on the basis of the calendar year shall be filed on or before the 15th day of April following the close of the calendar year. Returns made on the basis of a fiscal year shall be filed on or before the fifteenth day of the fourth month following the close of the fiscal year.
(Added by Stats. 1993, Ch. 31, Sec. 26. Effective June 16, 1993. Operative January 1, 1994, by Sec. 83 of Ch. 31.)
(a) The Franchise Tax Board may grant a reasonable extension of time for filing any return, declaration, statement or other document required by Part 10 (commencing with Section 17001) or this part in the manner and form as the Franchise Tax Board may determine. Except for a taxpayer residing or traveling abroad, no extension shall be for more than six months. In the case of a taxpayer residing or traveling abroad, returns shall be filed no later than the 15th day of the sixth month following the close of the taxable year, unless the requirements for extension have been fulfilled on or before that date.
(b) An extension of time granted pursuant to this section is not an extension of time for payment of tax required to be paid on or before the due date of the return without regard to extension. Underpayment of tax penalties shall be imposed as provided by law without regard to any extension granted under this section.
(c) A reasonable extension for payment of tax required by this part may be granted by the Franchise Tax Board whenever in its judgment good cause exists.
(Amended by Stats. 1996, Ch. 952, Sec. 22. Effective January 1, 1997.)
(a) In the case of an individual who is serving as a member of the armed forces of the United States or any auxiliary branch thereof, or the merchant marine, beyond the boundaries of the United States, the Franchise Tax Board shall automatically grant, without application being made therefor, an extension of time, free from interest and penalties, for filing the return (except income withheld at source), for payment of the tax (except income withheld at source), for taking any of the steps required by Sections 19041, 19045, 19306, 19324, and 19331, until 180 days after his or her return to the United States.
(b) “United States,” as used in subdivision (a), means the 50 states of the United States and the District of Columbia.
(c) This section shall also apply to the spouse of any individual described in subdivision (a).
(Added by Stats. 1993, Ch. 31, Sec. 26. Effective June 16, 1993. Operative January 1, 1994, by Sec. 83 of Ch. 31.)
(a) The provisions of Section 7508 of the Internal Revenue Code, relating to time for performing certain acts postponed by reason of service in a combat zone or contingency operation, shall apply except as otherwise provided.
(b) Section 7508(e)(1) of the Internal Revenue Code, relating to tax in jeopardy, etc., is modified to refer to jeopardy assessments and liens authorized under this part, in lieu of the references to Section 6851 and Chapter 70 or 71 of the Internal Revenue Code.
(c) Notwithstanding Section 17034, this section shall be operative without regard to taxable years and shall be operative with respect to any actions specified in Section 18570 that are required or permitted to be taken on or after August 2, 1990.
(Amended by Stats. 2005, Ch. 691, Sec. 41. Effective October 7, 2005.)
(a) Section 7508A of the Internal Revenue Code, relating to postponement of certain tax-related deadlines, shall apply, except as otherwise provided.
(b) Section 7508A of the Internal Revenue Code, relating to postponement of certain tax-related deadlines, shall apply to a taxpayer determined by the Franchise Tax Board to be affected by a state of emergency declared by the Governor.
(Amended by Stats. 2012, Ch. 382, Sec. 1. Effective January 1, 2013.)
