California is gaming 5 percent tax penalty

June 25, 2013 

I now fully understand how the state has come from such a tax deficit to a tax surplus so quickly. It has come on the backs of the legit taxpayer.

I received a "Notice of State Income Tax Due" letter with a penalty and interest due because they did not receive my 2012 tax due and first quarter 2013 estimated tax payment by the April 15 deadline. That is when I found out how this all really works. The Franchise Tax Board scans in your payments for processing but conveniently destroys the envelope that shows the postmark date. It is your responsibility to produce for them a receipt that shows in fact that you did mail the payments by April 15.

I don't believe you will see any changes to the California Revenue and Taxation code that states "all payments mailed in for processing should be by certified letter or delivery service."

To not do the extra step with certified mail, you could be assessed a 5 percent penalty plus interest on the so-called "late payment." That creates an additional 5 percent in tax revenue, and they didn't have to get voter approval to do it.



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