To appeal a decision by the California Franchise Tax Board (FTB), you must first attempt to use all of your administrative remedies within the FTB. After you have exhausted these procedures, you may appeal your decision by submitting the proper forms by the appropriate deadline. These procedures were handled by the Board of Equalization (BOE), but a new bill passed in California has changed some of these procedures, with a new Office of Tax Appeals handling FTB tax appeals beginning January 1, 2018.
How to Submit Your Appeal
There are many different types of FTB notices you have the right to appeal, including:
- Notice of Action on a protest against a tax assessment, including penalties and interest
- Notice of Action on a cancellation, credit, or refund, which denies all or part of a refund
- Notice of Determination Not to Abate Interest
- Notice of Action denying a request of innocent spouse relief
Appeals for most notices most be filed within 30 days of the FTB notice. If you are considering filing an appeal, contact a California tax attorney immediately to avoid missing your deadline and losing your appeal rights. Notice of Actions denying a refund have a 90-day appeal deadline, along with a Notice of Determination Not to Abate Interest.
If you miss your deadline on an appeal of a proposed tax assessment, your best option would be to pay the tax and file a claim for a refund.
You will have to send an appeal letter in order to officially file your appeal, which includes the dates of all FTB notices, the tax years and amounts at issue, a statement of the facts, and your legal authority for disputing the FTB decision.
How Changes to the BOE Affect Your Tax Appeal
If you wish to file a tax appeal and receive a decision on or before December 31, 2017, you should follow the existing appeals process with the BOE. After this date, the BOE will continue to review decisions related to property tax assessments, taxes on insurers, and excise taxes on alcoholic beverages.
Beginning in January of 2018, the Office of Tax Appeals will begin hearing appeals related to California income taxes, franchise taxes, sales and use taxes, and other special taxes and fees. Appeals will be heard by a panel of three Administrative Law Judges.
The details of the new appeals process will need to be figured out by the beginning of 2018, as taxpayers and tax attorneys prepare for a new—and hopefully improved—appeals process. If you have questions about FTB appeals or the new Office of Tax Appeals, consult with a tax attorney.