Receiving a penalty from the California Franchise Tax Board (FTB) can be aggravating—especially when you believe it was issued in error. The state offers a formal process for disputing these assessments, giving you a legitimate opportunity to seek reduction or removal.
Understand the basis of the penalty
FTB penalties often stem from late filings, underpayments, or inaccuracies in submitted returns. Before taking any action, examine the notice you received. It outlines the specific violation and monetary penalty involved. A clear understanding of the basis for the charge enables you to craft an effective response and choose the appropriate challenge method.
Submit a penalty abatement request
If you had a valid reason for the error or delay, you may be eligible for penalty relief through an abatement request. Acceptable causes typically include serious illness, natural disasters, or reliance on incorrect professional tax advice. Use FTB Form 2917 to explain your circumstances in detail.
Supporting evidence, such as medical documentation, insurance reports, or correspondence, strengthens your request. The FTB evaluates each case on its own merits and may grant relief if your justification meets its standards.
Pursue a formal protest when necessary
If your request for abatement is denied or you fundamentally disagree with the FTB’s determination, you have the right to file a formal protest. This must occur within 60 days of the Notice of Proposed Assessment. Your protest should include a well-reasoned written explanation supported by documentation.
You may also request an administrative hearing to present your case. Though more complex, this route offers a real chance for reversal when your argument is well-substantiated.
Maintain documentation and monitor timelines
Timeliness and thorough documentation are essential throughout the challenge process. Keep copies of all submitted forms, notices, and correspondence. Closely monitor deadlines to avoid forfeiting your appeal rights. If you need procedural guidance, the FTB’s website offers detailed instructions and downloadable forms to assist you.