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SB-1082 Income taxation: timeliness penalty: abatement. (2017-2018)

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Date Published: 03/20/2018 09:00 PM
SB1082:v98#DOCUMENT

Amended  IN  Senate  March 20, 2018

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Senate Bill
No. 1082

Introduced by Senator Bradford

February 12, 2018

An act to repeal and add Section 19132.5 of the Revenue and Taxation Code, relating to taxation.


LEGISLATIVE COUNSEL'S DIGEST


SB 1082, as amended, Bradford. Income taxation: timeliness penalty: abatement.
Existing law imposes penalties when a taxpayer fails to timely file an income tax return or fails to timely pay the tax due as shown on, or as required to be shown on, the tax return, unless it is shown that the failure is due to reasonable cause and not due to willful neglect.
This bill, for taxable years beginning on and after January 1, 2019, would require the Franchise Tax Board, upon request by an individual taxpayer, to grant a one­time abatement of a failure-to-file or failure-to-pay timeliness penalty if the taxpayer was not previously required to file a California personal income tax return or the Franchise Tax Board has not imposed a timeliness penalty in the year of the request or any proceeding taxable years, has not previously been granted abatement under this section, the taxpayer has filed all required returns as of the date of the request for abatement, and the taxpayer has paid, or is in a current arrangement to pay, all tax currently due.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 Section 19132.5 of the Revenue and Taxation Code is repealed.

SEC. 2.

 Section 19132.5 is added to the Revenue and Taxation Code, to read:

19132.5.
 (a) (1)   An individual taxpayer may elect to request a one­time abatement of a timeliness penalty under this section for a timeliness penalty that has been considered and rejected for abatement pursuant to the provisions of the section under which the penalty is imposed.
(2) An individual taxpayer may, in lieu of requesting consideration for abatement pursuant to the section under which the timeliness penalty is imposed, instead request a one­time abatement of a timeliness penalty under this section.
(b) If a taxpayer described in subdivision (a) requests, either orally or in writing, the abatement of a timeliness penalty pursuant to this section, the timeliness penalty shall be abated if all of the following apply:
(1) The taxpayer has not previously been required to file a California personal income tax return under Part 10 (commencing with Section 17001) or no other timeliness penalty has been imposed by the Franchise Tax Board in the calendar year of the request for abatement or any of the proceeding taxable years. has not previously been granted abatement under this section.
(2) The taxpayer has filed all returns required under Part 10 (commencing with Section 17001) as of the date of the taxpayer’s request for abatement under this section.
(3) Excluding the timeliness penalty that is the subject of the abatement request under this section, the taxpayer has paid in full, or arranged to pay pursuant to an installment agreement, any tax, penalties, fees, and interest due for the required returns pursuant to paragraph (2) and the taxpayer is current with all installment payments.
(c) For purposes of this section, “timeliness penalty” means a penalty imposed under Section 19131 or 19132 with respect to a return filed by an individual.
(d) For purposes of this section:
(1) A timeliness penalty imposed and subsequently abated due to a determination of reasonable cause, or reasonable cause and not willful neglect, with respect to the taxpayer or the taxpayer’s spouse shall be considered to have not been imposed for purposes of determining eligibility for timeliness penalty abatement under this section.
(2) A timeliness penalty shall be considered imposed on the original due date of the return for the taxable year for which the penalty is imposed.
(e) 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 rule, guideline, or procedure prescribed by the Franchise Tax Board pursuant to this section.
(f) This section shall apply to requests for abatement made for taxable years beginning on or after January 1, 2019.