Posted by: Robert Horwitz | March 31, 2020

FTB, OTA Extend Filing Deadlines for Protests, Appeals, Briefing — Will Treasury Follow Suit by Robert S. Horwitz

On March 30, 2020, the California Franchise Tax Board (FTB) issued Notice 2020-02.  Based on Governor Newson’s March 12, 2020, executive order authorizing the FTB to use its administrative powers to grant extensions, the notice extends the deadline for filing claims for refund, protests of Notices of Proposed Assessment (NPA), appeals and petitions for rehearing to the Office of Tax Appeals (OTA), and issuing NPAs.

Refund Claims:  A taxpayer’s claim for refund is timely if filed within the later of four years of the date the return was filed (if timely), four years from the original due date for the return, or one year from the date of payment.   Where the statute of limitations on a refund claim expires between March 12 and July 15, 2020, the refund claim will be considered timely if filed on or before July 15, 2020.

Protests:  Protests of a NPA are normally due within 60 days.  Where the time for filing a protest expires between March 12 and July 15, 2020, the protest is timely if filed on or before July 15, 2020.

Appeal and Petitions for Rehearing to OTAA taxpayer can file appeal to the OTA within thirty days from a Notice of Action on a protest of an NPA and within 90 days from the denial of a refund claim.  Any appeal due between March 12, 2020, and July 15, 2020, is timely if filed by July 15, 2020.  A petition for rehearing from a decision by the OTA that was to be filed between March 12, 2020, and July 15, 2020, is timely if filed by July 15, 2020.

Issuance of NPAs:  If the statute of limitations on issuing an NPA was to expire between March 12, 2020, and July 15, 2020, the NPA is timely if issued by July 15, 2020.

This action follows OTA Legal Notice 2020-01, issued March 18, 2020.  That notice automatically extended by 60 days all briefing and other filing deadlines that fall between March 12 and May 18, 2020, by 60 days.

The FTB’s authority to extend deadlines is contained in Revenue & Taxation Code sec. 18572, which incorporates IRC sec. 7508A.  Besides authorizing the Secretary of the Treasury to extend the date for filing returns and paying taxes in the case of a federally declared disaster, sec. 7508A authorizes the Secretary to extend the time for, among other things: a) filing Tax Court petitions, b) allowing claims for credit or refund; c) filing suit upon a claim for credit or refund, and d) filing suit by the Government in respect of any tax liability.  Secretary Mnuchin has already extended the time for filing returns and paying tax from April 15, 2020 to July 15, 2020.  Given the coronavirus pandemic and its effect on the public, the IRS and the Tax Court, will he also extend the time for filing Tax Court petitions, refund claims and refund suits?

The FTB has not yet issued guidance similar to the IRS’s recently released “People First Initiative” regarding suspension of collection actions. IR-2020-59, March 25, 2020. Accordingly, it is unclear whether the FTB has suspended the issuance of new Notices of State Income Tax Due or subsequent enforced collection actions.  The CDTFA has also recently released guidance regarding collection relief in the form of a 90 day relief for taxpayers in payment plans.

Contact Robert S. Horwitz at horwitz@taxlitigator.com or 310.281.3200   Mr. Horwitz is a principal at Hochman Salkin Toscher Perez P.C., former Chair of the Taxation Section, California Lawyers’ Association, a Fellow of the American College of Tax Counsel, a former Assistant United States Attorney and a former Trial Attorney, United States Department of Justice Tax Division.  He represents clients throughout the United States and elsewhere involving federal and state administrative civil tax disputes and tax litigation as well as defending criminal tax investigations and prosecutions. Additional information is available at http://www.taxlitigator.com.


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