Sam Brotman, JD, LLM, MBA August 24, 2014 3 min read

Franchise Tax Board Appeals

Franchise Tax Board Appeals - Process of Appealing FTB's Decision in Protest Dispute

The Franchise Tax Board Appeals Process

The protester who wants to appeal the Franchise Tax Board's decision, has 30 days to file appeal in writing from the day FTB mails Notice of Action letter. If taxpayer does not appeal within 30 days, the decision becomes final. FTB then sends taxpayer written demand for payment, and taxpayer must pay the amount demanded within 10 days from the day the Franchise Tax Board mailed the demand letter.

After taxpayer files his or her Franchise Tax Board appeal, the Franchise Tax Board and taxpayer will have an opportunity to provide additional information in support of their positions. An oral hearing will be conducted before the Board of Equalization, unless both the Franchise Tax Board and taxpayer waive oral hearing. Once Board of Equalization makes its decision, both the Franchise Tax Board and a taxpayer may request another hearing (rehearing) within 30 days of the decision. If no rehearing is requested, then the decision becomes final after the expiration of 30-day period.

However, the decision is binding on the Franchise Tax Board, but not on the taxpayer. A taxpayer can pay the tax, then file a claim for refund, and then appeal in California Superior Court. After the California Superior Court has rendered its decision, either the FTB or the taxpayer may file an appeal on the decision to the California Appellate Court and/or the California Supreme Court, and ultimately the U.S. Supreme Court.

Franchise Tax Board Appeals - Claim for Refund

The taxpayer may pay the tax deficiency demanded by FTB and then file a claim for refund any time during the protest process. If FTB denies claim for refund, taxpayer has 90 days from the mailing of the denial letter by FTB to file an appeal with the Board of Equalization (see above) or file a lawsuit in Superior Court. If the FTB does not take any action at all regarding filed claim for refund, taxpayer may still file a lawsuit in the Superior Court of California, despite the fact that the claim for refund was not officially denied by the FTB.

Franchise Tax Board Appeals- Suspended Corporations

A suspended corporation is one that has had its corporate rights, privileges, and powers suspended by FTB or the Office of the Secretary of State (SOS). A corporation may be suspended for failing to file tax returns, pay taxes, pay assessments, or file the necessary documents with the SOS. Since a suspended corporation has no privileges or rights, it cannot file a protest or appeal while it is suspended. The taxpayer corporation must revive to good standing within the protest period or appeal period to have a timely protest.

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Sam Brotman, JD, LLM, MBA

Owner and Director of Legal
Brotman Law

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