Franchise Tax Board is Contacting Thousands of Businesses to File Delinquent Tax Returns
Sacramento: The state is contacting more than 40,000 California businesses that have not filed their 2008 state income tax returns with the Franchise Tax Board (FTB).
The notices inform the businesses that they have 30 days to file a return or show why there is no tax filing requirement. Businesses that disregard these notices could face tax assessments that may include penalties, interest, and fees.
FTB annually reviews more than 5 million income records received from the Internal Revenue Service, the State Employment Development Department, the State Board of Equalization, financial institutions, and other business entities, then compares that data to tax returns already filed to identify noncompliance. Last year, FTB collected approximately $38 million from non-filing businesses the agency notified.
California faces an annual tax gap of $6.5 billion per year. The tax gap is the difference between taxes owed and taxes paid. The failure to file tax returns is one part of the tax gap along with underreporting of income, overstatement of tax deductions, and the underpayment of taxes owed.