How Much Penalties Can the FTB Charge Me?

On: July 20, 2018

It depends on the reason or reasons for the penalties in question. The FTB has a list of 18 pages of different kinds of penalties for various infractions and failure in the filing and paying of your taxes (FTB 1024 – Franchise Tax Board Penalty Reference Chart).

Two Examples:

Failure to File a Return/Late Filing Penalty 19131 6651 Any taxpayer who is required to file a return, but fails to do so by the due date. 5% of the tax due, after allowing for timely payments, for every month that the return is late, up to a maximum of 25%. For fraud, substitute 15% and 75% for 5% and 25%, respectively. For individuals and fiduciaries, minimum penalty is the lesser of: • $135 or • 100% of the tax required to be shown on the return.

Failure to Pay Tax/Late Payment Penalty 19132 6651 Taxpayer failing to pay tax by the due date. This penalty is not imposed if, for the same tax year, the sum of Sections 19131 and 19133 penalties are equal to or greater than this penalty. 5% of the total tax unpaid plus 1/2 of 1% for every month the payment of tax was late up to 40 months. Not to exceed 25% of the total unpaid tax.

There are 18 pages of this.

Obviously, this is one reason to hire a tax professional in dealing with the FTB. The FTB is notoriously more difficult to deal with than the IRS, not that either can write in a fashion an average person can understand. Reasonable cause is grounds to have such penalties abated, though the definition of this term periodically changes.