Bill Text: CA AB1777 | 2013-2014 | Regular Session | Amended

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Bill Title: Income taxation: timeliness penalty: abatement.

Spectrum: Bipartisan Bill

Status: (Introduced - Dead) 2014-05-23 - In committee: Set, second hearing. Held under submission. [AB1777 Detail]

Download: California-2013-AB1777-Amended.html

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BILL NUMBER: AB 1777	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  MAY 1, 2014
	AMENDED IN ASSEMBLY  APRIL 7, 2014

INTRODUCED BY   Assembly Member Quirk-Silva
   (Principal coauthor: Assembly Member Gorell)

                        FEBRUARY 18, 2014

   An act to repeal and add Section 19132.5 of the Revenue and
Taxation Code, relating to taxation, and making an appropriation
therefor.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 1777, as amended, Quirk-Silva. Income taxation: timeliness
penalty: abatement.
   Existing law imposes penalties when a taxpayer fails to timely
file an income tax return or fails to timely pay the tax due as shown
on, or as required to be shown on, the tax return, unless it is
shown that the failure is due to reasonable cause and not due to
willful neglect.
   The bill would require the Franchise Tax Board, upon 
taxpayer  request  of a qualified taxpayer, as defined
 , to abate a failure-to-file or failure-to-pay timeliness
penalty when specified circumstances are met, including where the
 qualified  taxpayer has paid, or is in a current
arrangement to pay, all tax currently due and the Franchise Tax Board
has not imposed a timeliness penalty in the year of the request or
prior 4 years. The bill would make a continuous appropriation from
the General Fund to the Franchise Tax Board in those amounts
necessary to make payments to those  qualified  taxpayers
who have paid the penalty that is being abated before the effective
date of this bill.
   The bill would make a legislative finding and declaration
regarding the public purpose served by the bill.
   Vote: 2/3. Appropriation: yes. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 19132.5 of the Revenue and Taxation Code is
repealed.
  SEC. 2.  Section 19132.5 is added to the Revenue and Taxation Code,
to read:
   19132.5.  (a) (1) A  qualified  taxpayer may elect to
request abatement of a timeliness penalty under this section for a
timeliness penalty that has been considered and rejected for
abatement, waiver, or rescission pursuant to the provisions of the
section under which the penalty is imposed.
   (2) A  qualified  taxpayer may, in lieu of requesting
consideration for abatement, waiver, or recission pursuant to the
provisions of the section under which the timeliness penalty is
imposed, instead request abatement of a timeliness penalty under this
section.
   (b) If a  qualified  taxpayer described in subdivision
(a) requests, either orally or in writing, the abatement of a
timeliness penalty pursuant to this section, the timeliness penalty
shall be abated if all of the following apply:
   (1) The  qualified  taxpayer has not previously been
required to file a California return under Part 10 (commencing with
Section 17001), this part, or Part 11 (commencing with Section
23001), or no other timeliness penalty has been imposed by the
Franchise Tax Board in the calendar year of the request for abatement
or in the prior four tax years.
   (2) The  qualified  taxpayer has filed all returns
required under Part 10 (commencing with Section 17001), this part, or
Part 11 (commencing with Section 23001), as of the date of the 
qualified  taxpayer's request for abatement.
   (3) Excluding the timeliness penalty that is the subject of the
abatement request, the  qualified  taxpayer has paid in
full, or arranged to pay pursuant to an installment agreement, any
tax, penalties, fees, and interest due for all currently required
returns and the  qualified  taxpayer is current with all
installment payments.
   (c) For purposes of this  section, "timeliness 
 section:  
   (1) "Qualified taxpayer" means any corporation with gross receipts
of less than one million dollars ($1,000,000) in the taxable year
for which the timeliness penalty is imposed or an individual
taxpayer. 
    (2)     "Timeliness  penalty" means a
penalty imposed under Section 19131, 19132, 19172, or 19172.5.
   (d) For purposes of this section:
   (1) A timeliness penalty imposed and subsequently abated due to a
determination of reasonable cause or reasonable cause and not willful
neglect with respect to the  qualified  taxpayer or the
 qualifie   d  taxpayer's spouse, shall be
considered to have not been imposed.
   (2) A timeliness penalty is considered imposed on the original due
date of the return for the taxable year for which the penalty is
imposed.
   (3) If a  qualified  taxpayer requests abatement for more
than one taxable year and two or more taxable years would be
eligible for abatement under this section, then only the penalty for
the earliest taxable year shall be abated.
   (4)  This   Subject to Section 19306, 
 this  section shall apply to requests for abatement made
before, on, or after the effective date of the act adding this
section.
   (e) The Franchise Tax Board may issue any regulations necessary or
appropriate to implement this section.
   (f) Notwithstanding Section 13340 of the Government Code, and
without regard to fiscal year, there is hereby continuously
appropriated from the General Fund to the Franchise Tax Board those
amounts necessary to make the payments required by the act adding
this subdivision with respect to the abatement of penalties paid
before the effective date of the act adding this subdivision.
  SEC. 3.  The Legislature finds and declares that the abatement by
this act of timeliness penalties with respect to the abatement of
penalties paid before the effective date  of  this act,
serves a public purpose and does not constitute a gift of public
funds within the meaning of Section 6 of Article XVI of the
California Constitution.