California Franchise Tax Board (FTB) mails notices asking for business tax returns, no response could cost you!
FTB recently sent letters to over 41,000 California businesses that have not filed their 2015 state income tax returns.
Each year FTB reviews more than 10 million income records received from the IRS, the Employment Development Department, the Board of Equalization, financial institutions, and other businesses. They match this information against their tax records to identify potential nonfilers. Last fiscal year, they collected approximately $63.2 million from businesses that failed to file tax returns.
FTB gives business nonfilers 30 days to file a tax return or show why one is not required. Businesses that disregard the letter will get a tax assessment based on income and other information reported to FTB. The tax assessment includes interest, fees, and penalties.
It is important to respond to these notices even if you believe you are not required to file. Not responding can lead to an involuntary collection action taken against a business owners bank accounts.
Just because you received a notice does not mean you are required to file. Contact a licensed tax professional familiar with California filing requirements before responding. To schedule a free consultation contact me at firstname.lastname@example.org.