California taxpayers are beginning work on their 2010 state tax returns. But the California Franchise Tax Board (FTB) isn't through with 2009's taxes just yet. The FTB announced this week that it will be getting in touch with over 900,000 people to ask them why they did not file a 2009 California income tax return.
The FTB uses millions of sources to trace income, trying to identify people who earned income in California in 2009, but have not filed a state income tax return for the 2009 filing year.
The FTB identifies income by using data from the Internal Revenue Service, California state government departments, employers, banks and many other sources. The FTB also uses mortgage interest payment information to find people who are required to file a California state income tax return. Occupational licensing data also leads FTB to income earners who have not filed.
By searching for income earners in these ways, the FTB has been able to recover over five hundred million dollars in tax revenue in the last year alone.
FTB has been making contact with non-filers since the 50s. Once contacted, an individual has thirty days to file, or prove why they are not required to file.
If a return is required but not filed, the FTB will issue a tax assessment based on an estimate of tax due using the information they have. This assessment will also include fees, interest and penalties that can reach 50% of the tax due.
FTB has a website that gives taxpayers more information about filing state tax returns. They even have an option to sign up for an e-mail reminder to file a state tax return.
Source: California Franchise Tax Board "State Contacting Income Earners Who Did Not File Tax Returns" 1/18/2011