19301-19368
REVENUE AND TAXATION CODE
SECTION 19301-19368
19301. (a) If the Franchise Tax Board or the board, as the case may
be, finds that there has been an overpayment of any liability
imposed under Part 10 (commencing with Section 17001), Part 11
(commencing with Section 23001), or this part by a taxpayer for any
year for any reason, the amount of the overpayment may be credited
against any amount then due from the taxpayer and the balance shall
be refunded to the taxpayer.
(b) In the case of a joint return filed under Section 18521, the
amount of the overpayment may be credited against the amount then due
from both taxpayers and the balance shall be refunded to both
taxpayers in the names under which the return was paid.
(c) In the case of a corporation, the balance shall be refunded to
the taxpayer or its successor through reorganization, merger, or
consolidation, or to its shareholders upon dissolution.
19302. If the Franchise Tax Board determines that the taxpayer paid
an amount not required to be paid under this part, the Franchise Tax
Board shall set forth that fact in its records and may either credit
the amount on any amounts then due and payable under this part from
the taxpayer by whom the amount was paid or refund the amount or the
balance to the taxpayer or the taxpayer's successors, administrators,
or executors.
19303. The Franchise Tax Board shall revise returns required to be
filed pursuant to Article 1 (commencing with Section 18501) of
Chapter 2 of Part 10.2 of Division 2 to allow a taxpayer, who is an
individual, to designate more than one account at financial
institutions for direct deposit of the taxpayer's refund.
19306. (a) No credit or refund shall be allowed or made after a
period ending four years from the date the return was filed (if filed
within the time prescribed by Section 18567 or 18604, whichever is
applicable), four years from the last day prescribed for filing the
return (determined without regard to any extension of time for filing
the return), or after one year from the date of the overpayment,
whichever period expires later, unless before the expiration of that
period a claim therefor is filed by the taxpayer, or unless before
the expiration of that period the Franchise Tax Board allows a
credit, makes a refund, or mails a notice of proposed overpayment on
a preprinted form prescribed by the Franchise Tax Board.
(b) The amendments to this section by the act adding this
subdivision shall be applied to all claims and refunds, without
regard to taxable year, for which the statute of limitations has not
expired on the date that this act takes effect.
19307. For purposes of Section 19306, a return filed within four
years from the last day prescribed for filing the return showing a
credit allowable by Section 19002 or estimated tax paid pursuant to
Section 19023, 19024, or 19136 in excess of the tax due, shall be
considered a claim for refund of the excess if the amount thereof is
more than one dollar ($1). No refund of tax withheld or estimated tax
paid shall be allowed to an employee or taxpayer who fails to file a
return for the taxable year in respect of which the tax withheld or
estimated tax was allowable as a credit.
19308. The period within which a claim for credit or refund may be
filed, or credit or refund allowed or made if no claim is filed,
shall be the period within which the Franchise Tax Board may mail a
notice of proposed deficiency assessment under the same
circumstances, if either of the following apply:
(a) The taxpayer has, within the period prescribed in Section
19306, agreed in writing, under Article 3 (commencing with Section
19031) of Chapter 4, to extend the time within which the Franchise
Tax Board may propose a deficiency assessment.
(b) The taxpayer has agreed with the United States Commissioner of
Internal Revenue for an extension (or renewals thereof) of the
period for proposing and assessing deficiencies in federal income tax
for any year.
19309. Section 19306 shall apply to any claim filed, or credit or
refund allowed or made, before the execution of an agreement pursuant
to Section 19308.
19311. (a) (1) If a change or correction is made or allowed by the
Commissioner of Internal Revenue or other officer of the United
States or other competent authority, a claim for credit or refund
resulting from the adjustment may be filed by the taxpayer within two
years from the date of the final federal determination (as defined
in Section 18622), or within the period provided in Section 19306,
19307, 19308, or 19316, whichever period expires later.
(2) Within two years of the date of the final determination (as
defined in Section 18622) or within the period provided in Section
19306, 19307, or 19308, whichever period expires later, the Franchise
Tax Board may allow a credit, make a refund, or mail to the taxpayer
a notice of proposed overpayment resulting from the final federal
determination.
(b) The amendments made by the act adding this paragraph shall
apply, without regard to taxable year, to federal determinations that
become final on or after the effective date of the act adding this
paragraph.
19311.5. (a) If any taxes paid to another state result in an
allowable credit under Section 18001, 18002, 18003, 18004, 18005, or
18006, a claim for credit or refund of an overpayment of income tax
attributable to a credit allowable under any of these sections may be
filed within one year from the date tax is paid to the other state
or within the period provided in Section 19306, whichever period
expires later.
(b) This section shall apply to taxes paid to another state on or
after January 1, 2009.
19312. Insofar as the claim for credit or refund relates to an
overpayment on account of the deductibility, under Section 24348 of
this code or Section 166 of the Internal Revenue Code, of a debt as
one which became worthless, or a loss from worthlessness of a
security under Section 24347 or 24348 of this code or Section 165(g)
or 166 of the Internal Revenue Code, or an erroneous inclusion of an
amount attributable to the recovery of a bad debt, prior tax or
delinquency amount, under Section 111 of the Internal Revenue Code
due to an adjustment of a bad debt deduction under Section 24348 of
this code or Section 166 of the Internal Revenue Code, or a loss
deduction from worthlessness of a security under Section 24347 of
this code or Section 165(g) of the Internal Revenue Code, in lieu of
the period of limitations prescribed in Section 19306, the period
shall be seven years from the date prescribed by law for filing the
return for the year with respect to which the claim is made.
19313. (a) In the case of any tax imposed by Part 10 (commencing
with Section 17001) or Part 11 (commencing with Section 23001) with
respect to any person, the period for filing a claim for credit or
refund of any overpayment attributable to any partnership item of a
federally registered partnership shall not expire before the later of
the following:
(1) The date which is five years after the date prescribed by law
(including extensions thereof) for filing the partnership return for
the partnership taxable year in which the item arose.
(2) If an agreement under Section 6501(c)(4) of the Internal
Revenue Code of 1954 extending the period for the assessment of any
deficiency attributable to the partnership item is made before the
date specified in paragraph (1), the date six months after the
expiration of the extension.
In any case to which the preceding sentence applies, the amount of
the credit or refund may exceed the portion of the tax paid within
the period provided in Section 19306 or 19308, whichever is
applicable.
(b) For purposes of this subdivision, "partnership item" and
"federally registered partnership" have the same meanings as when
used in Section 19063.
19314. (a) Notwithstanding any statute of limitations otherwise
provided for in this part, any overpayment due a taxpayer for any
year, shall be allowed as an offset in computing any deficiency in
tax, for the same or any other year, if the overpayment results from
any of the following:
(1) A transfer of items of income or deductions or both to or from
another year for the same taxpayer.
(2) A transfer of items of income or deductions or both for the
same year for a related taxpayer described in Section 19110.
(3) A transfer of items of income or deductions, or both, to or
from another taxpayer for the same or different years if the items of
income or deductions are transferred between affiliated taxpayers
whose tax is determined under Chapter 17 (commencing with Section
25101) of Part 11.
(b) The offset provided under subdivision (a) shall not be allowed
after the expiration of seven years from the due date of the return
or returns on which the overpayment is determined.
(c) No refund shall be allowed under subdivision (a) unless before
the period set forth in Section 19306 a claim therefor is filed by
the taxpayer or unless before the expiration of that period the
Franchise Tax Board has allowed a credit or made a refund.
19316. (a) In the case of an individual taxpayer under the Personal
Income Tax Law (Part 10 (commencing with Section 17001)), the
running of any period specified in Section 19306, 19308, 19311,
19312, or 19313 shall be suspended during any period during which
that individual taxpayer is "financially disabled" as defined in
subdivision (b). The financial disability of an individual taxpayer
shall be established in accordance with those procedures and
requirements specified by the Franchise Tax Board.
(b) (1) For purposes of this section, except as otherwise provided
in paragraph (2), an individual taxpayer is "financially disabled"
if that individual taxpayer is unable to manage his or her financial
affairs by reason of a medically determinable physical or mental
impairment that is either deemed to be a terminal impairment or is
expected to last for a continuous period of not less than 12 months.
(2) An individual taxpayer shall not be considered to be
"financially disabled" for any period during which that individual's
spouse or any other person is legally authorized to act on that
individual's behalf in financial matters.
(c) This section applies to periods of disability commencing
before, on, or after the effective date of the act adding this
section, but does not apply to any claim or refund that (without
regard to this section) is barred by the operation or rule of law,
including res judicata, as of the effective date of the act adding
this section.
19321. A refund claim upon which action has become final shall not
thereafter be considered a refund claim within the meaning of Section
19306 except to the extent it has been allowed.
19322. Every claim for refund shall be in writing, shall be signed
by the taxpayer or the taxpayer's authorized representative, and
shall state the specific grounds upon which it is founded. A claim
filed for or on behalf of a class of taxpayers shall do all of the
following:
(a) Be accompanied by written authorization from each taxpayer
sought to be included in the class.
(b) Be signed by each taxpayer or taxpayer's authorized
representative.
(c) State the specific grounds on which the claim is founded.
19322.1. (a) A claim for refund that is otherwise valid under
Section 19322, but that is made in the case in which payment of the
entire tax assessed or asserted has not been made, shall be a claim
only for purposes of tolling the time periods set forth in Section
19306. For all other purposes (including the application of Sections
19323, 19324, 19331, 19335, 19384, and 19385) the claim shall be
deemed filed on the date that full payment of the tax is made.
However, no credit or refund may be made or allowed for any payment
made more than seven years before the date that full payment of the
tax is made.
(b) This section shall apply to all claims for refund filed on or
after the effective date of the act adding this section, without
regard to taxable year.
19323. (a) If the Franchise Tax Board disallows any claim for
refund, it shall notify the taxpayer accordingly and provide an
explanation for the disallowance.
(b) The amendments made by the act adding this subdivision shall
apply to disallowances after the 180th day after the effective date
of the act adding this subdivision.
19324. (a) Except as provided in subdivision (b), at the expiration
of 90 days from the mailing of the notice, the Franchise Tax Board's
action upon the claim is final unless within the 90-day period the
taxpayer appeals in writing from the action of the Franchise Tax
Board to the board.
(b) If within the period set forth in Section 19384 for filing a
suit for refund the Franchise Tax Board receives information which it
determines clearly establishes that a disallowed claim should have
been allowed, in whole or in part, the Franchise Tax Board shall
credit the amount of the overpayment against any taxes due from the
taxpayer under this part and the balance shall be refunded to the
taxpayer.
19325. No interest shall be allowed or paid with respect to a claim
for credit or refund based upon an overpayment which is the result
of federal law, including treaties, which reduces taxes for taxable
years prior to the enactment date of the federal law or the approval
date of the treaty.
19331. If the Franchise Tax Board fails to mail notice of action on
any refund claim within six months after the claim is filed, the
taxpayer may prior to mailing of notice of action on the refund claim
consider the claim disallowed and appeal to the board. For
substitution of the 120-day period for the six-month period contained
in this section in a Title 11 case, see Section 505(a)(2) of Title
11 of the United States Code.
19332. Two copies of the appeal and two copies of any supporting
documents shall be addressed and mailed to the State Board of
Equalization at Sacramento, California. Upon receipt of the appeal,
the board shall provide one copy of the appeal and one copy of any
supporting documents to the Franchise Tax Board at Sacramento,
California.
19333. The board shall hear and determine the appeal and thereafter
shall forthwith notify the taxpayer and the Franchise Tax Board of
its determination and the reasons therefor.
19334. The determination of the board is final upon the expiration
of 30 days from the date of the determination unless within the
30-day period, the taxpayer or Franchise Tax Board files a petition
for rehearing with the board. In that event the determination becomes
final upon the expiration of 30 days from the date the board issues
its opinion on the petition.
19335. If, with or after the filing of a protest or an appeal to
the State Board of Equalization pursuant to Article 3 (commencing
with Section 19031) of Chapter 4, a taxpayer pays the tax protested
before the Franchise Tax Board acts upon the protest, or the board
upon the appeal, the Franchise Tax Board or board shall treat the
protest or the appeal as a claim for refund or an appeal from the
denial of a claim for refund filed under this article.
19340. Interest shall be allowed and paid on any overpayment in
respect of any tax, at the adjusted annual rate established pursuant
to Section 19521 as follows:
(a) In the case of a credit, from the date of the overpayment to
the due date of the amount for which the credit is allowed. Any
interest allowed on any credit shall first be credited on any amounts
due from the taxpayer under Part 10 (commencing with Section 17001),
this part, or Part 11 (commencing with Section 23001).
(b) In the case of a refund, including a refund in excess of tax
liability as prescribed in subdivision (j) of Section 17053.5, from
the date of the overpayment to a date preceding the date of the
refund warrant by not more than 30 days, the date to be determined by
the Franchise Tax Board.
19341. (a) Except as provided in subdivisions (b), (c), and (d), if
any overpayment of tax is refunded or credited within 90 days after
the return is filed, or within 90 days after the last day prescribed
for filing the return of tax (determined without regard to any
extension of time for filing the return), whichever is later, no
interest shall be allowed under Section 19340 on the overpayment.
For the purposes of this section, "overpayment of tax" includes a
refund in excess of tax liability as prescribed in subdivision (j) of
Section 17053.5.
(b) In the case of returns which set forth no determination or
amount of tax liability, or credits other than that allowed under
Section 17053.5, and which are filed solely for the purpose of
claiming the renter credit, no interest shall be allowed on refunds
made within 90 days from the date on which the return is filed, or
within 90 days after the last day prescribed for filing the return,
whichever is later. This subdivision applies only when communication
with the claimant or other verification is necessary to determine
entitlement to the claimed credit.
(c) In the case of an individual or fiduciary taxable under Part
10 (commencing with Section 17001), for the 1982 taxable year and
each taxable year thereafter, the 90-day time periods specified in
subdivision (a) shall be 45 days.
(d) In the case of a return of tax which is filed after the last
date prescribed for filing the return (determined with regard to
extensions), no interest shall be allowed or paid for any day before
the date on which the return is filed.
19342. If the Franchise Tax Board disallows interest on any claim
for refund, it shall notify the taxpayer accordingly.
19343. At the expiration of 90 days from the mailing of the notice
specified in Section 19342, the Franchise Tax Board's action upon the
disallowance of the interest shall be final unless within the 90-day
period, the taxpayer appeals in writing from the action of the
Franchise Tax Board to the board.
19344. Two copies of the appeal and two copies of any supporting
documents shall be addressed and mailed to the State Board of
Equalization at Sacramento, California. Upon receipt of the appeal,
the board shall provide one copy of the appeal and one copy of any
supporting documents to the Franchise Tax Board at Sacramento,
California.
19345. The board shall hear and determine the same and thereafter
shall forthwith notify the taxpayer and the Franchise Tax Board of
its determination and the reasons therefor.
19346. The determination is final upon the expiration of 30 days
from the date of the determination unless within the 30-day period,
the taxpayer or Franchise Tax Board files a petition for rehearing
with the board. In that event the determination becomes final upon
the expiration of 30 days from the date the board issues its opinion
upon the petition.
19347. Within 90 days after the mailing of the notice of the
Franchise Tax Board's action disallowing interest upon any refund
claim, or, in the case of an appeal to the board from the
disallowance of interest on any refund claim, within the 90 days
after the board's determination (including the issuance of a
decision, opinion, or dismissal) of the appeal becomes final pursuant
to Section 19346, the taxpayer may bring an action against the
Franchise Tax Board on the grounds set forth for interest in the
claim for the recovery of the interest.
19348. If the Franchise Tax Board fails to mail notice of action of
disallowance of interest on any refund claim within six months after
the interest was claimed, the taxpayer may, prior to mailing notice
of action of disallowance of interest on the refund claim, consider
the interest disallowed and bring an action against the Franchise Tax
Board on the grounds set forth for interest in the claim for the
recovery of the interest.
19349. A payment not made incident to a bona fide and orderly
discharge of an actual liability or one reasonably assumed to be
imposed by law, is not an overpayment for the purposes of Section
19340 and interest is not payable thereon.
19350. If a credit or refund of any part of an overpayment would be
barred under Section 19306, except for Section 19312, no interest
shall be allowed or paid with respect to that part of the overpayment
for any period beginning after the expiration of the period of
limitation provided in Section 19306 for filing claim for credit or
refund of that part of the overpayment and ending at the expiration
of six months after the date on which the claim was filed or, in case
no claim was filed and the overpayment was found by the board,
ending at the time the appeal was filed with the board.
19351. The provisions of Section 19066, which are applicable in
determining the period of limitation on credit or refund, shall be
applicable in determining the date of payment for purposes of
Sections 19340, 19341, 19363, and 19391.
19354. If the amount allowable as a credit under Section 19002
(relating to credit for tax withheld) and the amount, if any,
allowable as a refundable tax credit (including the Child and
Dependent Care Credit allowable under Section 17052.6) exceeds the
tax imposed by Part 10 (commencing with Section 17001), against which
the credits are allowable, the amount of the excess shall be
considered an overpayment.
19355. Any action of the Franchise Tax Board in refunding the
excess of tax withheld under Section 18662 or 18666 or estimated tax
paid pursuant to Section 19136 or any action of the Employment
Development Department in refunding to the employer the excess tax
withheld under Section 13020 of the Unemployment Insurance Code shall
not constitute a determination of the correctness of the return of
the taxpayer for purposes of this part.
19361. In the case of an overpayment of tax imposed by Section
18662 or 18666, refund or credit shall be made to the employer or to
the withholding agent, as the case may be, only to the extent that
the amount of the overpayment was not deducted and withheld by the
employer or withholding agent. No interest shall be allowed on the
overpayment.
19362. The Franchise Tax Board is authorized to prescribe
regulations providing for the crediting against the estimated tax for
any taxable year of the amount determined by the taxpayer or the
Franchise Tax Board to be an overpayment of the tax for a preceding
taxable year.
19363. Credits or refunds of overpayments of estimated tax shall be
made by the Franchise Tax Board as provided in this article. Any
amount paid as estimated tax for any taxable year shall be deemed to
have been paid on the last day prescribed for filing the return for
the taxable year (determined without regard to any extension of time
for filing the return).
19364. If any overpayment of tax is claimed as a credit against
estimated tax for the succeeding taxable year, that amount shall be
considered as payment of the tax for the succeeding year (whether or
not claimed as a credit in the return of estimated tax for that
succeeding year), and no claim for credit or refund of that
overpayment shall be allowed for the taxable year in which the
overpayment arises.
19365. (a) (1) A corporation electing to be treated as an "S
corporation" for a taxable year beginning in 2002 under Chapter 4.5
(commencing with Section 23800) of Part 11 may file an application
for the transfer of an overpayment with respect to payments of
estimated tax for taxable years beginning in 2002 to the personal
income tax accounts of its shareholders. An application under this
subdivision shall not constitute a claim for credit or refund.
(2) An application under this subdivision shall be verified in the
manner prescribed by Section 18621 in the case of the taxpayer, and
shall be filed in the manner and form prescribed by the Franchise Tax
Board. The application shall set forth all of the following:
(A) The amount the "S corporation" estimates as its tax liability
under this part for the taxable year, which shall not be less than
the greater of 1 1/2 percent of its net income or the applicable
minimum franchise tax.
(B) The amount and date of the estimated tax paid during the
taxable year.
(C) For each shareholder affected, his or her name, social
security account number, address, and percentage of ownership, and
any changes in that percentage of ownership for the S corporation's
taxable year, the amount of each overpayment to be transferred, and
the date the amount was paid.
(D) Any other information for purposes of carrying out this
section as may be required by the Franchise Tax Board.
(b) (1) Within a period of 45 days from the date on which an
application for a transfer is filed under subdivision (a), the
Franchise Tax Board shall make, to the extent it deems practicable in
that period, a limited examination of the application to discover
omissions and errors therein, and shall determine the final amount of
the transfers upon the basis of the application and the examination,
except that the Franchise Tax Board may disallow, without further
action, any application which it finds contains material omissions or
errors which it deems cannot be corrected within the 45-day period.
(2) The Franchise Tax Board, within the 45-day period referred to
in paragraph (1), may credit the amount of the overpayment against
any liability on the part of the taxpayer under Part 11 (commencing
with Section 23001).
(3) In the event the amount available for transfer is less than
requested by the taxpayer, the overpayment amount shall be allocated
among the shareholders on a pro rata basis based on their percentage
of ownership stated on the application.
(4) For purposes of Part 10 (commencing with Section 17001), Part
11 (commencing with Section 23001), and this part, the transferred
amounts shall be treated as if they had been estimated tax payments
paid by the respective shareholders on the date originally paid by
the corporation.
(5) No application under subdivision (a) shall be allowed unless
the amount to be transferred equals or exceeds five hundred dollars
($500).
(6) Each S corporation which files an application for transfer of
overpayments under subdivision (a) shall furnish to each person who
is a shareholder at any time during the taxable year a statement
showing amounts and dates of the overpayments being transferred to
that person's personal income tax account.
19368. (a) If the Franchise Tax Board makes or allows a refund or
credit that it determines to be erroneous, in whole or in part, the
amount erroneously made or allowed may be assessed and collected
after notice and demand pursuant to Section 19051 (pertaining to
mathematical errors), except that the rights of protest and appeal
shall apply with respect to amounts assessable as deficiencies
without regard to the running of any period of limitations provided
elsewhere in this part. Notice and demand for repayment must be made
within two years after the refund or credit was made or allowed, or
during the period within which the Franchise Tax Board may mail a
notice of proposed deficiency assessment, whichever period expires
the later. Abatement of interest on an amount due under this section
is governed by subdivision (c) of Section 19104.
(b) (1) This section shall also apply to a misdirected refund. For
purposes of this subdivision, a "misdirected refund" means a direct
deposit refund that was deposited in the account of a person other
than the taxpayer entitled to that refund. A misdirected refund does
not include any refund caused by Franchise Tax Board error, which is
an erroneous refund under subdivision (a).
(2) This subdivision shall only apply if the Franchise Tax Board
determines that all of the following conditions have been satisfied:
(A) A taxpayer filed a tax return that designated one or more
direct deposit refunds.
(B) The taxpayer, tax preparer, or electronic return originator
entered an incorrect financial institution account or routing number
that resulted in all or a portion of the refund not being received,
directly or indirectly, by the taxpayer due the refund.
(C) The taxpayer did not receive the refund.
(D) The recipient of the misdirected refund was not entitled to
the refund.
(3) Before any credit of the misdirected refund is allowed to the
taxpayer, the taxpayer shall provide one or more of the following to
the Franchise Tax Board, upon written request by the board:
(A) An affidavit from the taxpayer that the taxpayer notified the
financial institution that the taxpayer, tax preparer, or electronic
return originator entered an incorrect financial institution account
or routing number and that the state-issued refund was directly
deposited into an account not owned, directly or indirectly, by the
taxpayer entitled to the refund.
(B) An affidavit from the taxpayer indicating that neither the
taxpayer nor the taxpayer's representative has custody or control,
directly or indirectly, over the account at the financial institution
that received the direct deposit refund.
(C) An affidavit from the taxpayer indicating that neither the
taxpayer nor the taxpayer's representative has received reimbursement
of the refund moneys from any source.
(4) The Franchise Tax Board shall mail notice and demand for
repayment as prescribed in subdivision (a) to the recipient of the
misdirected refund at the last known address.
(5) Effective on the date the notice and demand for repayment to
the recipient is mailed to the recipient, the taxpayer's account
shall be credited with the amount of the misdirected refund.
(6) This subdivision shall apply to any misdirected refund
deposited on or after January 1, 2009.