Christi Grab's Blog

I am excited to report that James Lovett and I have launched a new documentary series exposing the corruption at the Franchise Tax Board! We plan to release a series of short videos, each focusing on a specific topic.

Today we released Trailer #1: This is Christi’s Story, Trailer #2: FTB’s 8 Illegal Schemes to Overcharge Taxpayers, and our first segment, called: The Linchpin of FTB’s Schemes.

The Linchpin quickly but clearly explains how FTB falsifies a document called the Notice of Proposed Assessment in order to unlawfully impose penalties.

James and my long-term goal is to go after FTB with Federal Class-Action Criminal Complaints. If FTB has falsely imposed penalties on you using the withholding of payments scheme that I described in this video, please join the complaint! Email me at FTBFighter at protonmail dot com (I wrote it like this to avoid spam bots). 

I am planning on filing a Federal Criminal Complaint against Franchise Tax Board for Overcharging Interest. My goal is to find fellow taxpayers who have also been overcharged interest so that it can be a Class Action Criminal Complaint. So please, check to see if you have been overcharged interest. If you were overcharged and would like to join in on the Federal Criminal Complaint, please email me at: FTBFighter at protonmail dot com (I wrote it like this to avoid spam bots).  

Step #1: Send a letter requesting copies of your Amortization Schedules.

This is a record of how they calculated the principal balance, how many payments you made, how the payments were applied, and how much interest was charged in the interim between each payment that was made. 

You can only request this information via fax from the Disclosure Department. Their fax number is (916) 845-4849. Your letter must include: 

• The date you faxed the letter 
• Your name and taxpayer ID # (usually social security number)
• Your spouse’s name and taxpayer ID # (usually social security number) 
• Your address 
• You must specify each and every tax year that you want the amortization schedules for 
• Specify if you want the documents mailed or faxed back. If you want them faxed, include a fax number.
• The letter must be signed

Here is a suggestion for what you can write in the body of the letter: “I would like to see a record of all payments made towards those tax years, dates the payments were applied, how penalties were calculated, and complete amortization schedules showing how the interest was calculated.”

2. Check to see if FTB overcharged based on their own numbers.

Once you get the amortization schedules back, there should be at least one page titled: Interest Computation Detail Display.

Under the title will be your taxpayer ID#s and the tax year 

Under that is the type of liability and liability amount. In this example, the top portion says liability: Demand Pen and unpaid liability amount of $3,873

Under that will be a series of lines, each listing the date beginning, date ending, total number of days, rate and total interest charged. 

To figure out interest, you have to check each and every line. Again using our own tax year 2014 as an example:

Line #1

We were charged 3% interest. $3,873 x .03 = $116.19 interest per year

There are 365 days per year. $116.19  / 365 days = .3183 per day

We were charged this amount for 214 days. $0.3183 x 214 = $68.12 total interest due

However, as you can see, we were charged $68.53, which is 41 cents more than what we actually owed.

Line #2

We were charged 4% interest. $3,873 x .04 = $154.92 interest per year

There are 365 days per year. $154.92 / 365 days = .4244 per day

We were charged this amount for 163 days. $0.4244 x 163 = $69.18

However, as you can see, we were charged $71.04, which is $1.68 more than what I actually owed.

Total:

Line 1 overcharge was 41 cents

Plus line 2 overcharge was $1.68

Equals a total overcharge of $2.27

I hand-calculated all the tax years that we paid interest on. From what I can tell, it looks like FTB’s system automatically added about an extra $1 per calendar year to our total interest charges. It’s not much money per person, but considering they are overcharging this $1 per year on thousands of people, it is a substantial amount of illicit revenue to the State of CA.  

3. Check to see if FTB falsified the numbers they are using. 

You will probably need to refer back your own records (ie the bills that FTB sent you) and compare the old records to the ones FTB has just sent you to find the falsification(s). 

I have caught two type of falsifications: tacking on extra interest beyond what they calculate is owed and not crediting all the money you’ve already paid in towards the liability. 

Adding Excess Interest

Going back to the example above, you can see that on the bottom half of the page, FTB listed a second unpaid liability in the amount of $7.04. When I did the calculations, I saw that I was not overcharged interest on the $7.04. 

However, my instincts told me that something was not right with this $7.04. Why would a second demand Penalty be imposed three weeks after the initial Demand penalty was imposed. If FTB had gotten the liability amount wrong, wouldn’t they simply go back and correct it retroactively?

I looked through my old bills and I found that in February 2014, a FTB rep told me to send in $28.20, but the bill stated that I only owed $21.15. Somehow, that representative had manually changed the interest in the system to reflect the higher amount of money that he’d quoted me. 

So for tax year 2014, I was actually overcharged by $9.32: 

$2.27 in systematic overcharges (from section 2 above)

Plus $7.05 in fraudulently added interest

This was actually the second time I caught a FTB representative telling me to send in more than the bill stated was due, so this appears to be an ongoing scheme at FTB. This is the documentation for the first time it happened to us, on tax year 2011. 

Not Crediting All The Money You’ve Paid Towards the Liability

When I was looking through the bills that FTB had sent to us, something that jumped out at me was that for tax year 2014, our bills stated that FTB had only collected $29,388.25 in tax payments from us. Per FTB’s own records, my husband’s employers had collected almost $32,000 in state taxes, plus we’d made an estimated tax payment, so there was obviously something very wrong with the $29,388.25 number on the bill. 

The records that FTB had provided are discombobulated, so I had a hard time figuring out how FTB came up with their number. The full breakdown is here, but the summary is that, for the purposes of calculating interest, FTB only recognized a partial payment from my husband’s employers, FTB did not credit an overpayment of SDI collected by my husband’s employers, and FTB did not credit the estimated tax payment that we’d made via credit elect. 

We had actually overpaid our tax liability for 2014 by so much that we had enough in there to cover the penalties imposed, which means that every penny in interest had been fraudulently imposed because no interest accrues on a zero balance. 

Most people probably won’t have a zero balance when you add the missing payment(s) back in, so you will have to go back and hand recalculate what you should have paid in interest per the instructions above. To help guide you on how to do this, here is an imaginary example:

Let’s pretend that the only money that my husband and I had paid in estimated taxes was the amount of money collected by my husband’s employers for wages: $30,905.

Our tax liability was $26,609

Plus FTB assessed us a penalty of $6,652.25

= Total Tax Liability: $33,261.25

Minus the payments collected by employer: -$30,905

= Total that would have been due to FTB = $2,356.25

Now let’s go back to section 1 to figure out how much we should have paid in interest in this imaginary scenario:

Line #1

FTB charged 3% interest. $2,356.25 x .03 = $70.6875 interest per year

There are 365 days per year. $70.6875  / 365 days = $0.1936 per day

I was charged this amount for 214 days. $0.1936 x 214 = $41.44 total interest due

Line #2

We were charged 4% interest. $2,356.25 x .04 = $94.25 interest per year

There are 365 days per year. $94.25 / 365 days = $0.2582 per day

We were charged this amount for 163 days. $0.2582 x 163 = $42.09

In this imaginary scenario, our total tax interest would have been:

Line 1: $41.44 + Line 2: $42.09 = $83.53 in total Interest.

Just crediting us the full amount of money that my husband’s employer collected made a huge difference in total interest. Now imagine if they had included in the other payments we’d made!

For those that prefer video, here is a 12-minute speech that I made to Betty Yee via webinar in December 2020, which sums up the info below.

The over-simplified explanation of the schemes that I got ensnared in is that the Franchise Tax Board does not apply the money that you send them to your account right away. Then they charge you penalties for “paying late.” Then they over-charge interest on these penalties. 

But you have to understand that the reason that they’ve been getting away with their criminal activities is because tax law is complicated, and they work the complex nature of the laws to deceive the public on what the laws actually say. 

They do this by omitting pertinent portions of the laws they are citing, by cherry-picking words out of context to make it seem like the laws say something different than they actually do, and by omitting the laws that work hand in hand with the laws cited.

We’ll start with the Notice of Proposed Assessment, which is one of the lynch pins of the schemes. 

When a Notice of Proposed Assessment is sent, the FTB says that if you don’t file a tax return within 60 days of the date of the letter, they will impose a fee for FILING LATE. They cite a portion of Revenue and Tax Code 19133, which says that a late filing fee can be imposed. 

FTB conveniently omits the portion of Revenue and Tax Code 19133 that clearly states that a Notice of Proposed Assessment can only be issued in accordance with Revenue and Tax Code 19087. 

And they certainly do not voluntarily disclose that Revenue and Tax Code 19087 says that Notices of Proposed Assessments can only be issued on UNDERFUNDED ACCOUNTS as determined by FTB.  So FTB calculates how much tax you owe based on a status of single, filing zero. If you have underpaid based on this calculation, then they can legally issue you a Notice of Proposed Assessment. However, if you have paid your tax liability in full, FTB CANNOT impose a LATE FILING FEE.

Embezzlement and Racketeering Schemes 1, 2 and 3

To evade the R&TC 19807 law, the FTB falsely makes it appear that your account is underfunded. They do this by not crediting your account with all the money that you have paid to them. So far, FTB has confirmed that they don’t credit the following payments until after you file that year’s tax return:

• Payments made via credit elect (line item 92 on the 540 CA tax return, where you indicate that you want your refund to be applied as an estimated tax payment for the next year instead of taking it as a cash refund). This practice violates revenue and Tax Code 19363. The legal precedent that they cite is irrelevant. 

• Estimated tax payments that are made by married couples. The laws/precedents that FTB cites are either irrelevant or say the exact opposite of what FTB claims, which confirms that the withholding practices are indeed unlawful. 

• Interestingly enough, while the Taxpayer Advocate’s office confirms year in and year out that these two withholding practices do exist, FTB’s own Disclosure Department denies that FTB has any withholding practices. 

FTB has yet to confirm this, but my own tax records indicate that they also don’t credit taxes collected from secondary employers. So they will credit the wages collected from your second job against you for your tax liability, but not credit the tax money collected from that same job towards the taxes you’ve already paid.  

FTB’s Taxpayer Advocate has told me that FTB puts these monies into “suspense,” which in accounting terminology means the general slush fund. Based on information that has come out in my court case, it appears that this slush fund account is called “No Payment.” Not crediting your money timely is the federal crime of embezzlement. 

If you file your tax return timely, the money gets credited before the late filing deadline and you never had any idea that your money had been temporarily embezzled. It is when you file late that the problems arise. Hence, the carefully controlled and convoluted language that FTB uses to hide that the penalty really and truly is a late PAYING penalty, not a late FILING penalty as they portray it to be. Imposing penalties that would not be imposed had the payments been applied in accordance to the law is the federal crime of racketeering. 

Racketeering Scheme 4

In addition to not crediting some payments, FTB has another scheme going, which is to “misapply” payments to bills that never existed on previous tax years that have already been closed and zeroed out. A few months later, they send you a refund check. The check comes from the State of CA and has no information with it, so you have no idea what the check is for. Sometimes, FTB splits the payment up over multiple years and sends multiple checks, and sometimes they add interest, so the check amounts are not necessarily the same amount as the estimated tax payment, so it’s hard to figure out what the check(s) could be for. 

When you file your tax return, you list all the payments made for that year. A few months later, FTB will send you a letter in the mail saying they did not receive as much as you claimed to have paid and you owe them money, along with penalties and interest for underpaying that year’s liability. When you call in to follow up, you find out that the mystery check(s) you got in the mail from the State of CA were actually a refund of the “misapplied” payment, and you need to re-make that payment along with the penalties and interest. It doesn’t matter that your account would not have been underfunded had they had not breached their duty to accurately apply payments, you are still on the hook for the penalties. In this racketeering scheme, you are penalized even if you did file your return timely. 

This happened to me three times, once for tax year 2008 and twice for tax year 2010. I demanded that two of the three payments be backdated and the fees reversed (one payment for each year). In both cases, the re-paid monies vanished from FTB’s records. The 2010 payment went missing for 7 months. Instead of locating the lost money, a wage garnishment was filed against my husband. The 2008 payment vanished for 7 YEARS. It took personal intervention from State Controller Yee’s office to locate that payment. And of course, with the payments missing, we were still on the hook for the penalties and interest. 

Overcharging Interest:

On my account, I have caught FTB overcharging us interest via four different mechanisms. They are:

1. FTB’s accounting system seems to systematically add small amounts of excess interest, roughly $1 per year. It’s not much money per person, but if they do it to thousands of people, that is a substantial amount of revenue. 

2. FTB staff can apparently manually override the system to artificially inflate interest due. Twice I had FTB representatives order me to send in more money than the bill said was due. Instead of refunding the overpayment to me, FTB altered the interest amount to make it look like that was the amount always due.  First time, second time.

3. FTB entirely withholds some of the payments collected to make it appear that the taxpayer has a higher outstanding balance than he does, and thus charges him more interest than they should. This is in line with the above mentioned Embezzlement and Racketeering Schemes 1 – 3. 

4. On payments that have been applied, portions of the payment vanish from the interest calculation screen, despite the fact the full payment amount seems to appear in the rest of FTB’s records. 

Circling Back to the Notices of Proposed Assessments:

You have 60-days from the date the letter is mailed to file a protest. If you do not file the protest by the deadline, the liability becomes payable in full. By the time the letter gets to you via USPS, you have about 6-weeks left.

NPAs are often mailed to an old address, even though FTB has your current address on file. This means that the taxpayer never gets the notice, or is delayed in getting their notice, and is thus denied their opportunity to protest.

FTB has a 90 day turn time on processing their USPS mail and a 30-day turn-time for documents uploaded on the MyFTB website. This means that any protest sent via USPS will not be processed before the deadline, and thus the penalty is imposed even though the got the protest (AKA dispute) to them before the deadline.

FTB has a one-week processing time on faxes, and they have a big problem with “losing faxes.” So lets say you get your notice and it takes you a week to find your documentation and get to a fax place. FTB “loses” your first fax. You call and follow up a couple weeks later and are told to send the fax again. Then FTB “loses” your second fax. And now the deadline has expired.

Even if you do get your Protest processed on time, it doesn’t matter. Protests/disputes to NPAs are falsely misclassified as a “no response.” FTB is not supposed to impose penalties if you file a protest/dispute, so they when they process the protest, they misclassify it and unlawfully imposes penalties anyway.

Here is FTB’s Response to my 2020 Annual Taxpayer Bill of Rights Requests. Here is the rebuttal that I wrote in which I detail the following:

The Interim Taxpayer Rights Advocate, Chris Smith, committed multiple counts of collusion to cover up criminal activity by misrepresenting what the law says about FTB’s practices of withholding estimated tax payments from the taxpayer’s account .

Mr. Smith stated that FTB’s accounting irregularities which lead to overcharging of interest are intentional business practices, not “flaws.” Mr. Smith did not deny that FTB overcharges interest.

Mr. Smith did not deny the racketeering scheme in which FTB delays re-applying “misapplied” payments until after the account has been put into collections and penalties falsely imposed.

Mr. Smith stated that FTB has “no capability” of opening correspondence timely. He did not deny that FTB falsely imposes penalties on people for “not responding timely,” even when FTB did receive the correspondence timely but FTB didn’t open it timely.

FTB has not denied that it abuses the Notice of Proposed Assessment in order to falsely impose penalties.

In addition to calling out all of the above, I harshly criticize FTB for many of its other unethical business practices, such as unfairly targeting those of low socio-economic status with their assorted schemes, and playing evasive games to avoid accountability.

In response to the requests for documents that I had made in October 2020, FTB did provide amortization tables showing how they calculated the interest that they charged us. I went through the amortization schedules line by line and caught FTB overcharging interest via four different mechanisms:

1. FTB’s accounting system seems to systematically add small amounts of excess interest. 

2. FTB staff can apparently manually override the system to artificially inflate interest due. (In 2018, I’d caught another instance of this, as well).

3. FTB entirely withholds some of the payments collected to make it appear that the taxpayer has a higher outstanding balance than he does, and thus charges him more interest than they should. 

4. On payments that have been applied, portions of the payment vanish from the interest calculation screen, despite the fact the full payment amount seems to appear in the rest of FTB’s records. 

On January 10, 2021, I sent this letter and proof FTB’s Taxpayer Advocate, FTB’s Board of Directors, FTB’s Executive Officers and several staff at GovOps. I also copied two people who work directly in Governor Newsom’s office, Stacy O’Brien and Blake Kaiser-Lack, along with members and staff of the Senate Governance and Finance Committee and members and staff of the Assembly Committee on Revenue and Taxation. And I sent a copy to my own State Senator, Toni Atkins, who is Senate President pro Tempore and wields great power.

Everyone who got this letter has the power of oversight over FTB. The official word from the legislators is that they will do NOTHING to stop the unlawful activities. Colin Grinnell, Staff Director of the Senate Governance and Finance Committee, verbally told me that the legislators won’t intervene unless a judge sides with me in court. This explains why the OTA judges gave such a blatantly corrupt verdict and why the CA Supreme Court gave no explanation as to why they would not hear my case.

On December 15, 2020, I filed a Motion to Compel Further Discovery with San Diego Superior Court regarding the case that I have pending against FTB for a refund of penalties, fees and interest for tax years 2011, 2013 and 2014.  Here are pages 1 – 21 and pages 22 – 42.

Key Points Contained in Motion: 

There are 5 line items on FTB accounting ledgers that I believe are fraudulent: 2 payments that show up as refunded even though they were not refunded, and 3 bills that I believe never existed (see pages 9, 11, 12, 21, 25). 

FTB has refused to provide the documentation for these 5 line items, hence the Motion to Compel. 

FTB stated under penalty of perjury that they do not keep accurate accounting records (see pages 5, 6). I could be wrong about this, but I think that since this was submitted to a court, anyone can use this information in their own cases that they have pending against FTB.

FTB committed perjury. Per R&TC 19363, estimated tax payments made via credit elect are to be backdated to 4-15-YEAR. I had asked what the actual dates were that these payments were applied, since the actual dates don’t show on the ledgers. FTB stated that the dates listed on the ledgers were the accurate dates that the payments were applied. The Notices of Proposed Assessment proved the monies had not been applied on those dates. (Pages 7 – 8)

FTB refused to disclose the location of where our payments were held in the interim between receiving the monies and applying them to our account. However, the documents provided indicated that the “ lost” estimated tax payments were labeled in FTB’s system as “no payments.”  (Pages 8 – 9)

FTB’s attorney, Deputy Attorney General Anna Barsegyan, made two statements that were so deceptive that they may qualify as unlawful (pages 24 – 25). 

Here is the full speech that I tried to give at FTB’s 2020 Annual Taxpayer Bill of Rights Meeting (12 minutes). For those that prefer reading over video, here is the written speech.

Unfortunately, State Controller Yee muted me after 5 minutes. Usually, FTB lets people speak for 8 minutes, and last year they let me talk for 11 minutes without cutting me off.

Controller Yee said that they had already received my written submission (which was longer and more detailed than the speech), and all of the requests I’d made would be addressed in their response due on February 1, 2021.

Just like last year, FTB did not provide any rebuttal. If my allegations were false, FTB would have denied them.

I think it was obvious to everyone that regularly attends these meetings that the Board knew what I was going to say and the Board cut the time short this year stop me from speaking the truth.

On Friday, December 18, 2020, at 1:30 pm (PST). the CA Franchise Tax Board will be having its Annual Taxpayer Bill of Rights Meeting, where they accept suggestions from the public on how to improve “the system.” More information is here: https://www.ftb.ca.gov/your-rights/your-taxpayer-rights.html

Details: The Franchise Tax Board will meet remotely on Thursday, December 18, 2020, at 1:30 p.m. The public may view the meeting at Franchise Tax Board’s Internet web site and may participate by telephone at 877-336-4440, access code: 6683081. Instructions for viewing and participating in the meeting can be found in the enclosed copy of the agenda.

During the meeting, the FTB will invite people one at a time to give their suggestions out loud to the FTB’s Board Members (who are currently Betty Yee, State Controller; Keely Bosler, Director of the Department of Finance; and Antonio Vasquez, Board of Equalization Chairman), as well as the FTB’s Executive Staff. FTB will be given time to respond. Here is are two examples of how the speeches go: 2018 and 2019.

If you cannot attend or don’t want to make a speech, you can still submit suggestions! Simply send an email before the meeting to  FTBAdvocate@ftb.ca.gov. They would prefer to receive them by December 15, 2020, but they will accept suggestions up until the meeting day. Last year, it appeared that they stopped taking suggestions via email, but Susan Maples assured me that they will be taking email suggestions this year.

All Policy Change Suggestions will get a response, called a Formal Resolution, by February 1, 2021.

You may be wondering why you’ve never heard about this meeting before? I mean, if they do it every year, you should have heard about it at some point, right?

This ability to make requests at the Annual Taxpayer Bill of Rights Meeting is a California State Right, pursuant to Revenue and Taxation Code section 21006(b)(2). Up until last year, FTB effectively hid this right from the public.

In 2017, 2018 (see 3:46) and 2019 (see 3:54), I requested that FTB do a better job of disclosing this right to the public. After my third request, they added a page to their website about it! So I can attest that the requests do work, you just have to be persistent. And if several people make the same requests, it has more power.

I am trying to spread the word about this State Right. Please share this information with other California taxpayers. Let’s flood the meeting with suggestions on how to improve the FTB! Let’s band together in a positive, constructive and legal way to demand that their broken system be fixed!

In California, we each have two State Legislators that represent us on State matters — one is our State Senator and the other is our Assemblyman. If you don’t know who yours is, you can find them here

The legislative year starts the September prior to the calendar year (so they are working on 2021 now even though it’s still 2020). From September to December, each legislator decides what they want to introduce for the next year. September is really the month you want to try to get into your legislator’s faces about the bills you would like to see introduced so that they have time to consider it, draft the bill, refine it, etc. But it’s still not too late!

Bills are introduced in January. Between January and August, the bills are revised, voted on, revised some more, voted on again… The final vote is usually at the end of August, so if it didn’t pass by August, its done for the year. If it is a bill your legislator feels strongly about, (s)he may choose to re-introduce it the next year. 

Once bills are passed, they have to go to the governor to be signed into law. if he doesn’t like the bill he can simply veto it — and it’s dead. The last day for the governor to sign bills is usually the end of September. Here is the calendar.

So if you have any ideas about new legislature that you’d like to see enacted, or changes to be made to existing legislature, now is the time to contact your representatives. And if you like any of my ideas, please suggest them to your representatives.

I have nothing to say regarding Title 18, but I have a lot to say about Revenue and Tax Code 19133! I have requested two major changes to the law. You can read my requests in their entirety here, but here are the highlights:

Suggestion 1 – Clarification of When a Penalty is NOT to be Imposed

As 19133 (a) and (b)(2) are currently written, it is unclear that Demand Penalties are to be imposed only when a taxpayer’s account has been underfunded. It is my belief that if the FTB genuinely cared about its mission to “…pay the correct amount,” or its value “We exemplify honesty, credibility, and accountability” or its goal to “Fairly administer the law to ensure taxpayers file and pay the correct amount,” then FTB would make it clear to the taxpayers about when penalties and fees are not to be imposed….

As you may be aware, I have recently filed an Accusation in the CA Supreme Court against FTB employee Eric Yadao. In the Accusation, I clearly laid out that FTB exploits this unclear wording of R&TC 19133 to falsely impose penalties and fees on taxpayers.

On page 23 of the (Supreme Court ) Accusation, I explained how one of the tactics Mr. Yadao used to cover up FTB’s federal crimes of embezzling and racketeering was via omission of critical portions of R&TC 19133. In his ROB, Mr. Yadao omitted portion (2) from R&TC 19133, which states: the FTB has proposed an assessment of tax under the authority of Revenue and Taxation Code section 19087… in hiding this portion of the law, he hid the fact that penalties are only to be imposed on delinquent accounts. Mr. Yadao does not deny that we were never delinquent on tax years 2010 – 2016. By hiding this portion of the law, he hid that the NPA and Demand Notices were falsely issued and the Demand Penalties falsely imposed…

Given FTB’s history of exploiting this vague wording to falsely impose penalties and fees, and their reluctance to fully disclose the portions of the law that disclose this, I am insisting that this flaw be corrected immediately.

Suggestion 2 – Opportunity to File a Dispute

I am also requesting that FTB’s wording of “prescribed manner” in portions (b)(1) and (b)(2) to be altered. The current policy is that only a tax return is an acceptable response to a Demand Notice/Request for Information… FTB should instead change their policy to include disputes as an acceptable response to a NPA and/or Demand Notice and/or Request for Information for avoidance of Demand Penalties. 

It is my belief that imposing Demand Penalties on taxpayers who have disputed an NPA and/or Demand Notice and/or Request for Information goes against FTB’s missions, values and goals… I documented in my OTA case that I called FTB 33 times and sent 38 letters to dispute the inaccurate NPAs and the Demand Notices that would not have been issued had the NPA’s been accurate. My disputes were disregarded and, as documented above, Demand Fees and penalties were improperly imposed in violation of R&TC 19807. 

If FTB genuinely cared about being fair to taxpayers, there would be a hold placed on a disputed account until the review of the dispute was completed. If the dispute was denied by FTB, a new Demand Notice would be issued based on the dates of the denial. It is my belief that not affording the taxpayers the right to dispute is a violation of state and federal laws.

If you are interested in providing comments or suggestions on either matter, here is a copy/paste of the emails FTB sent out to “interested parties” on the topics. The links have all the pertinent info and directions on how to submit comments:

10/08/2020 — Announcement of Notice of Proposed Rulemaking

The Franchise Tax Board hereby gives Notice of proposed amendments to Title 18, California Code of Regulations, section 19133, relating to Penalty for Failure To File Return Upon Notice and Demand. 

The Notice of Proposed Rulemaking will be published in the California Regulatory Notice Register on October 9, 2020.  The Notice, Initial Statement of Reasons, and Proposed Draft Language are now available on the FTB Regulatory Activity page.  Written comments will be accepted until November 23, 2020, by mail and email to the contact identified in the Notice. 

Please click on the link below to the FTB Regulatory Activity page and scroll down to the Draft Regulations to view the Notice, Initial Statement of Reasons, and Draft Language. https://www.ftb.ca.gov/tax-pros/law/regulatory-activity/index.html

and:

10/08/2020 — Announcement of Notice of Proposed Rulemaking

The Franchise Tax Board hereby gives Notice of proposed amendments to Title 18, California Code of Regulations, section 23663-1, and the potential adoption of section 23663-6, relating to Assignment of Credits – Eligible Assignees and Reorganizations. 

The Notice of Proposed Rulemaking will be published in the California Regulatory Notice Register on October 9, 2020.  The Notice, Initial Statement of Reasons, and Draft Language are now available on the FTB Regulatory Activity page.  Written comments will be accepted until November 23, 2020, by mail and email to the contact identified in the Notice. 

Please click on the link below to the FTB Regulatory Activity page and scroll down to the Draft Regulations to view the Notice, Initial Statement of Reasons, and Draft Language. https://www.ftb.ca.gov/tax-pros/law/regulatory-activity/index.html