19501-19533
REVENUE AND TAXATION CODE
SECTION 19501-19533
19501. The Franchise Tax Board shall administer and enforce Part 10
(commencing with Section 17001), Part 10.7 (commencing with Section
21001), Part 11 (commencing with Section 23001), and this part. For
this purpose, it may divide the state into a reasonable number of
districts, in each of which a branch office or offices may be
maintained during all or part of the time as may be necessary.
19502. In the establishment of the districts and offices, the
Franchise Tax Board shall give due consideration to the matter of
economy of administration and service to the taxpayers.
19503. (a) The Franchise Tax Board shall prescribe all rules and
regulations necessary for the enforcement of Part 10 (commencing with
Section 17001), Part 10.7 (commencing with Section 21001), Part 11
(commencing with Section 23001), and this part and may prescribe the
extent to which any ruling (including any judicial decision or any
administrative determination other than by regulation) shall be
applied without retroactive effect.
(b) (1) Except as otherwise provided in this subdivision, no
regulation relating to Part 10 (commencing with Section 17001), Part
10.7 (commencing with Section 21001), Part 11 (commencing with
Section 23001), or this part shall apply to any taxable year ending
before the date on which any notice substantially describing the
expected contents of any regulation is issued to the public.
(2) Paragraph (1) shall not apply to either of the following:
(A) Regulations issued within 24 months of the date of the
enactment of the statutory provision to which the regulation relates.
(B) Regulations issued within 24 months of the date that temporary
or final federal regulations with respect to statutory provisions to
which California conforms are filed with the Federal Register.
(3) The Franchise Tax Board may provide that any regulation may
take effect or apply retroactively to prevent abuse.
(4) The Franchise Tax Board may provide that any regulation may
apply retroactively to correct a procedural defect in the issuance of
any prior regulation.
(5) The limitation of paragraph (1) shall not apply to any
regulation relating to the Franchise Tax Board's policies, practices,
or procedures.
(6) The limitation of paragraph (1) may be superseded by a
legislative grant of authority to the Franchise Tax Board to
prescribe the effective date with respect to any regulation.
(7) The Franchise Tax Board may provide for any taxpayer to elect
to apply any regulation before the dates specified in paragraph (1).
(c) The amendments made by the act adding this subdivision are
operative with respect to regulations which relate to California
statutory provisions enacted on or after January 1, 1998.
19504. (a) The Franchise Tax Board, for the purpose of
administering its duties under this part, including ascertaining the
correctness of any return; making a return where none has been made;
determining or collecting the liability of any person in respect of
any liability imposed by Part 10 (commencing with Section 17001),
Part 11 (commencing with Section 23001), or this part (or the
liability at law or in equity of any transferee in respect of that
liability); shall have the power to require by demand, that an entity
of any kind including, but not limited to, employers, persons, or
financial institutions provide information or make available for
examination or copying at a specified time and place, or both, any
book, papers, or other data which may be relevant to that purpose.
Any demand to a financial institution shall comply with the
California Right to Financial Privacy Act set forth in Chapter 20
(commencing with Section 7460) of Division 7 of Title 1 of the
Government Code. Information that may be required upon demand
includes, but is not limited to, any of the following:
(1) Addresses and telephone numbers of persons designated by the
Franchise Tax Board.
(2) Information contained on Federal Form W-2 (Wage and Tax
Statement), Federal Form W-4 (Employee's Withholding Allowance
Certificate), or State Form DE-4 (Employee's Withholding Allowance
Certificate).
(b) The Franchise Tax Board may require the attendance of the
taxpayer or of any other person having knowledge in the premises and
may take testimony and require material proof for its information and
administer oaths to carry out this part.
(c) (1) The Franchise Tax Board may issue subpoenas or subpoenas
duces tecum, which subpoenas must be signed by any member of the
Franchise Tax Board, and may be served on any person for any purpose.
(2) For taxpayers that have been contacted by the Franchise Tax
Board regarding the use of a potentially abusive tax shelter (within
the meaning of Section 19777), the subpoena may be signed by any
member of the Franchise Tax Board, the Executive Officer of the
Franchise Tax Board, or any designee.
(d) Obedience to subpoenas or subpoenas duces tecum issued in
accordance with this section may be enforced by application to the
superior court as set forth in Article 2 (commencing with Section
11180) of Chapter 2 of Part 1 of Division 3 of Title 2 of the
Government Code.
(e) When examining a return, the Franchise Tax Board shall not use
financial status or economic reality examination techniques to
determine the existence of unreported income of any taxpayer unless
the Franchise Tax Board has a reasonable indication that there is a
likelihood of unreported income. This subdivision applies to any
examination beginning on or after October 10, 1999.
19504.5. (a) (1) Except as provided in subdivision (b), no subpoena
may be issued under this part and the Franchise Tax Board may not
begin any action under Article 2 (commencing with Section 1180) of
Chapter 2 of Part 1 of Division 3 of Title 2 of the Government Code
to enforce any subpoena to produce or analyze any tax-related
computer software source code.
(2) Any software and related materials that are provided to the
Franchise Tax Board under this part shall be subject to the
safeguards under subdivision (c).
(b) (1) Paragraph (1) of subdivision (a) shall not apply to any
portion, item, or component of the tax-related computer software
source code if all of the following apply:
(A) The Franchise Tax Board is unable to otherwise reasonably
ascertain the correctness of any item on a return from either of the
following:
(i) The taxpayer's books, papers, records, or other data.
(ii) The computer software executable code (and any modifications
thereof) to which the source code relates and any associated data
which, when executed, produces the output to ascertain the
correctness of the item.
(B) The Franchise Tax Board identifies with reasonable specificity
the portion, item, or component of the source code needed to verify
the correctness of the item on the return.
(C) The Franchise Tax Board determines that the need for the
portion, item, or component of the source code with respect to the
item outweighs the risks of unauthorized disclosure of trade secrets.
(2) Paragraph (1) of subdivision (a) shall not apply to any of the
following:
(A) Any inquiry into any offense connected with the administration
or enforcement of this part, Part 10 (commencing with Section
17001), Part 10.7 (commencing with Section 21001), or Part 11
(commencing with Section 23001).
(B) Any tax-related computer software source code acquired or
developed by the taxpayer or related person primarily for internal
use by the taxpayer or that person rather than for commercial
distribution.
(C) Any communications between the owner of the tax-related
computer software source code and the taxpayer or related persons.
(D) Any tax-related computer software source code which is
required to be provided or made available pursuant to any other
provision of this part, Part 10 (commencing with Section 17001), Part
10.7 (commencing with Section 21001), or Part 11 (commencing with
Section 23001).
(3) For purposes of paragraph (1), the Franchise Tax Board shall
be treated as meeting the requirements of subparagraphs (A) and (B)
of that paragraph if all of the following apply:
(A) The Franchise Tax Board determines that it is not feasible to
determine the correctness of an item without access to the computer
software executable code and associated data described in clause (ii)
of subparagraph (A) of paragraph (1).
(B) The Franchise Tax Board makes a formal request to the taxpayer
for the code and data and to the owner of the computer software
source code for the executable code.
(C) The code and data are not provided within 180 days of that
request.
(4) In any proceeding brought under Article 2 (commencing with
Section 1180) of Chapter 2 of Part 1 of Division 3 of Title 2 of the
Government Code to enforce a subpoena issued under the authority of
this subdivision, the court shall, at the request of any party, hold
a hearing to determine whether the applicable requirements of this
section have been met.
(c) (1) In any court proceeding to enforce a subpoena for any
portion of software, the court may receive evidence and issue any
order necessary to prevent the disclosure of trade secrets or other
confidential information with respect to that software, including
requiring that any information be placed under seal to be opened only
as directed by the court.
(2) Notwithstanding any other provision of this section, and in
addition to any protections ordered pursuant to paragraph (1), in the
case of software that comes into the possession or control of the
Franchise Tax Board in the course of any examination with respect to
any taxpayer, all of the following shall apply:
(A) The software may be used only in connection with the
examination of that taxpayer's return, any protest or appeal by the
taxpayer, any judicial proceeding and any appeals therefrom, or any
inquiry into any offense connected with the administration or
enforcement of this part, Part 10 (commencing with Section 17001),
Part 10.7 (commencing with Section 21001), or Part 11 (commencing
with Section 23001).
(B) The Franchise Tax Board shall provide, in advance, to the
taxpayer and the owner of the software a written list of the names of
all individuals who will analyze or otherwise have access to the
software.
(C) (i) The software shall be maintained in a secure area or
place, and in the case of computer software source code, shall not be
removed from the owner's place of business unless the owner permits,
or a court orders, that removal.
(ii) For purposes of clause (i), the owner shall make available
any necessary equipment or materials for analysis of computer
software source code required to be conducted on the owner's
premises.
(D) The software may not be copied except as necessary to perform
an analysis, and the Franchise Tax Board shall number all copies made
and certify in writing that no other copies have been or will be
made.
(E) At the end of the period during which the software may be used
under subparagraph (A), both of the following apply:
(i) The software and all copies thereof shall be returned to the
person from whom they were obtained and any copies thereof made under
subparagraph (D) on the hard drive of a machine or other mass
storage device shall be permanently deleted.
(ii) The Franchise Tax Board shall obtain from any person who
analyzes or otherwise had access to that software a written
certification under penalty of perjury that all copies and related
materials have been returned and that no copies were made of them.
(F) The software may not be decompiled or disassembled.
(G) (i) The Franchise Tax Board shall provide to the taxpayer and
the owner of any interest in the software, as the case may be, a
written agreement, between the Franchise Tax Board and any person who
is not an officer or employee of the State of California and who
will analyze or otherwise have access to that software, which
provides that the person agrees not to do either of the following:
(I) Disclose the software to any person other than persons to whom
the information could be disclosed for tax administration purposes
under Section 19542.
(II) Participate for two years in the development of software
which is intended for a similar purpose as the software examined.
(ii) The owner of any interest in the software shall be considered
a party to any agreement described in clause (i).
(H) The software shall be treated as return information for
purposes of Section 19542.
(d) For purposes of this section:
(1) "Software" includes computer software source code and computer
software executable code.
(2) "Computer software source code" means all of the following:
(A) The code written by a programmer using a programming language
which is comprehensible to appropriately trained persons and is not
capable of directly being used to give instructions to a computer.
(B) Related programmers' notes, design documents, memoranda, and
similar documentation.
(C) Related customer communications.
(3) "Computer software executable code" means both of the
following:
(A) Any object code, machine code, or other code readable by a
computer when loaded into its memory and used directly by the
computer to execute instructions.
(B) Any related user manuals.
(4) "Owner" includes, with respect to any software, the developer
of the software.
(5) A person shall be treated as related to another person if the
persons are related persons under Section 267 or 707(b) of the
Internal Revenue Code.
(6) "Tax-related computer software source code" means the computer
source code for any computer software program intended for
accounting, tax return preparation or compliance, or tax planning.
(e) This section and Section 19542.3 shall not apply to any
software acquired or developed for internal use by the Franchise Tax
Board.
(f) This section shall apply to subpoenas issued, and software
acquired, after the effective date of the act adding this section. In
the case of any software acquired on or before the effective date of
the act adding this section, the requirements of paragraph (2) of
subdivision (a) shall apply after the 90th day after the effective
date of the act adding this section. The preceding sentence shall not
apply to the requirement under clause (ii) of subparagraph (G) of
paragraph (2) of subdivision (c).
19504.7. (a) An officer or employee of the Franchise Tax Board may
not contact any person other than the taxpayer with respect to the
determination or collection of the tax liability of the taxpayer
without providing reasonable notice in advance to the taxpayer that
contacts with persons other than the taxpayer may be made. The notice
shall explain that a request may be made as provided in subdivision
(b). A notice shall be valid for any third-party contacts made during
the 12 months following the date of the notice. For any third-party
contacts made after the expiration of the 12 months, an additional
preliminary notice must be provided. This subdivision shall not apply
if mail to the same address is returned undeliverable with no
forwarding address. The notice shall not be required if the unpaid
tax for which notice would otherwise be required under this paragraph
is consolidated for collection purposes with a preexisting unpaid
tax for which notice has been given under this paragraph with respect
to that described preexisting unpaid tax of the person.
(b) The Franchise Tax Board shall provide, upon request from the
taxpayer, a record of persons contacted during that 12-month period
by the Franchise Tax Board with respect to the determination or
collection of the tax liability of the taxpayer. The taxpayer's
request shall be made no later than 60 days after the 12-month period
has expired.
(c) This section shall not apply:
(1) To any contact which the taxpayer has authorized.
(2) If the Franchise Tax Board determines for good cause shown
that the notice would jeopardize collection of any tax or the notice
may involve reprisal against any person.
(3) With respect to any pending criminal investigation.
(d) This section shall be operative for contacts made after 180
days after the effective date of the act adding this section.
19505. The Franchise Tax Board may appoint and remove, in the
manner provided by law, those officers, agents, branch office income
tax deputies, and other employees as it deems necessary. They shall
have the duties and powers as the Franchise Tax Board from time to
time prescribes.
19506. The Franchise Tax Board may appoint one or more deputies or
assistants to conduct hearings, prescribe regulations, or perform any
other duty imposed by this part or other laws of the state upon the
Franchise Tax Board.
19507. Any temporary appointments of branch office income tax
deputies and other branch office employees shall be made from
eligible residents of the district in which the branch office is
located.
19508. The salaries of the personnel required by the Franchise Tax
Board shall be such as it may prescribe, in the manner provided by
law, and the Franchise Tax Board and its personnel shall be allowed
reasonable and necessary traveling and other expenses incurred in the
performance of their duties.
19509. The Franchise Tax Board may require officers, agents,
deputies, and other employees designated by it to give bond for the
faithful performance of their duties in the sum and with the sureties
as it may determine. It shall pay all premiums on the bonds out of
moneys appropriated for the administration of this part.
19511. The Franchise Tax Board and officers and employees
designated by it may administer an oath to any person or take the
acknowledgment of any person in respect of any return or report
required by this part or the rules and regulations of the Franchise
Tax Board.
19512. Any person acting in a fiduciary capacity shall assume the
duties and, upon giving notice to the Franchise Tax Board, shall
assume the rights and privileges of the taxpayers in respect of any
tax, additions to tax, penalties, and interest imposed by Part 10
(commencing with Section 17001), Part 11 (commencing with Section
23001), or this part except as otherwise specifically provided, until
he or she gives notice that his or her fiduciary has terminated. He
or she shall give notice under this section pursuant to rules and
regulations prescribed by the Franchise Tax Board.
19513. (a) If assets of an estate are distributable to one or more
nonresident beneficiaries, the final account of the fiduciary shall
not be allowed by the probate court unless the fiduciary obtains from
the Franchise Tax Board and files with the court a certificate to
the effect that all taxes, additions to tax, penalties, and interest
imposed by Part 10 (commencing with Section 17001) or this part upon
the estate or decedent which have become payable have been paid, and
that all taxes, additions to tax, penalties, and interest which may
become due are secured by bond, deposit or otherwise.
(b) This section only applies if the value of the assets of the
estate at the death of the decedent and the value of the assets
distributable to one or more nonresidents exceed amounts prescribed
by regulations promulgated by the Franchise Tax Board.
19514. Within 30 days after receiving a request for a certificate,
the Franchise Tax Board shall either issue the certificate or notify
the person requesting the certificate of the amount that shall be
paid or the amount of bond, deposit, or other security that shall be
furnished as a condition of issuance of the certificate.
19515. The certificate of the Franchise Tax Board does not relieve
the estate for which the fiduciary acts of liability for any amounts
which are due and unpaid at the time the certificate is issued or
which may become due from the decedent or estate after the issuance
of the certificate. It also does not relieve the fiduciary of the
liability imposed by Section 19516.
19516. Every fiduciary who pays in whole or in part any claim,
other than claims for taxes, expenses of administration, funeral
expenses, expenses of last illness, family allowance, or wage claims
as defined in Section 11402 of the Probate Code, against the person,
estate, or trust for whom or for which the fiduciary acts, or who
makes any distribution of the assets of the person, estate, or trust,
before satisfaction and payment of taxes, interest, and penalties,
except penalties due from a decedent, which are imposed by Part 10
(commencing with Section 17001) or this part on the person, estate,
or trust for whom or for which the fiduciary acts, or which
constitute a claim against the person, estate, or trust, or which are
a lien or charge on or against the assets of the person, estate, or
trust, is personally liable to the state for the taxes, interest, and
penalties to the extent of the payments and distributions.
19517. (a) In the case of income received or accrued during the
lifetime of a decedent, or by his or her estate during the period of
administration, or by a trust, the Franchise Tax Board shall mail
notices proposing to assess the tax, and shall commence any
proceeding in court without assessment for the collection of the tax,
within 18 months after written request therefor (filed after the
return is made) by the fiduciary of the estate or trust or by any
other person liable for the tax or any portion thereof.
(b) After filing a request pursuant to subdivision (a), a
fiduciary may consent in writing to waive the limitation prescribed
by subdivision (a).
19518. (a) The trustee of a trust described in Section 401(a) of
the Internal Revenue Code which is exempt from tax under Section
17631 to which contributions have been paid under a plan on behalf of
any owner-employee (as defined in Section 401(c)(3) of the Internal
Revenue Code), and each insurance company or other person which is
the issuer of a contract purchased by such a trust, or purchased
under a plan described in Section 403(a) of the Internal Revenue
Code, contributions for which have been paid on behalf of any
owner-employee, shall file the returns (in the form and at the
times), keep the records, make the identification of contracts and
funds (and accounts within the funds), and supply the information, as
the Franchise Tax Board shall by forms or regulations prescribe.
(b) Every individual on whose behalf contributions have been paid
as an owner-employee (as defined in Section 401(c)(3) of the Internal
Revenue Code)--
(1) To a trust described in Section 401(a) of the Internal
Revenue Code which is exempt from tax under Section 17631, or
(2) To an insurance company or other person under a plan
described in Section 403(a) of the Internal Revenue Code,
shall furnish the trustee, insurance company, or other person, as the
case may be, the information at the times and in the form and manner
as the Franchise Tax Board shall prescribe by forms or regulations.
19519. The Franchise Tax Board shall transmit to the Director of
Employment Development claims for credit or refund allowed pursuant
to Section 17061 of this code and subdivision (a) of Section 1176.5
of the Unemployment Insurance Code.
19520. Unless otherwise specifically provided, if a provision of
law, including Section 1088.5 and Section 1088.8 of the Unemployment
Insurance Code, authorizes the use of information for tax enforcement
purposes, the term "tax enforcement" includes the collection of any
amount referred to the Franchise Tax Board for collection under a
provision of law that authorizes the Franchise Tax Board to collect
that amount in the same manner as an unpaid tax liability is
collected by the Franchise Tax Board.
19521. (a) The rate established under this section (referred to in
other code sections as "the adjusted annual rate") shall be
determined in accordance with Section 6621 of the Internal Revenue
Code, except that:
(1) (A) For taxpayers other than corporations, the overpayment
rate specified in Section 6621(a)(1) of the Internal Revenue Code
shall be modified to be equal to the underpayment rate determined
under Section 6621(a)(2) of the Internal Revenue Code.
(B) In the case of any corporation, for purposes of determining
interest on overpayments for periods beginning before July 1, 2002,
the overpayment rate specified in Section 6621(a)(1) of the Internal
Revenue Code shall be modified to be equal to the underpayment rate
determined under Section 6621(a)(2) of the Internal Revenue Code.
(C) In the case of any corporation, for purposes of determining
interest on overpayments for periods beginning on or after July 1,
2002, the overpayment rate specified in Section 6621(a)(1) of the
Internal Revenue Code shall be modified to be the lesser of 5 percent
or the bond equivalent rate of 13-week United States Treasury bills,
determined as follows:
(i) The bond equivalent rate of 13-week United States Treasury
bills established at the first auction held during the month of
January shall be utilized in determining the appropriate rate for the
following July 1 to December 31, inclusive. Any such rate shall be
rounded to the nearest full percent (or, if a multiple of one-half of
1 percent, that rate shall be increased to the next highest full
percent).
(ii) The bond equivalent rate of 13-week United States Treasury
bills established at the first auction held during the month of July
shall be utilized in determining the appropriate rate for the
following January 1 to June 30, inclusive. Any such rate shall be
rounded to the nearest full percent (or, if a multiple of one-half of
1 percent, that rate shall be increased to the next highest full
percent).
(2) The determination specified in Section 6621(b) of the Internal
Revenue Code shall be modified to be determined semiannually as
follows:
(A) The rate for January shall apply during the following July
through December, and
(B) The rate for July shall apply during the following January
through June.
(b) (1) For purposes of this part, Part 10 (commencing with
Section 17001), Part 11 (commencing with Section 23001), and any
other provision of law referencing this method of computation, in
computing the amount of any interest required to be paid by the state
or by the taxpayer, or any other amount determined by reference to
that amount of interest, that interest and that amount shall be
compounded daily.
(2) Paragraph (1) shall not apply for purposes of computing the
amount of any addition to tax under Section 19136 or 19142.
(c) Section 6621(c) of the Internal Revenue Code, relating to
increase in underpayment rate for large corporate underpayments, is
modified as follows:
(1) The applicable date shall be the 30th day after the earlier of
either of the following:
(A) The date on which the proposed deficiency assessment is
issued.
(B) The date on which the notice and demand is sent.
(2) This subdivision shall apply for purposes of determining
interest for periods after December 31, 1991.
(3) Section 6621(c)(2)(B)(iii) of the Internal Revenue Code shall
apply for purposes of determining interest for periods after December
31, 1998.
(d) Section 6621(d) of the Internal Revenue Code, relating to the
elimination of interest on overlapping periods of tax overpayments
and underpayments, shall not apply.
19522. (a) (1) (A) On or before the 10th of January each year, the
Franchise Tax Board shall submit to the Legislature a report on all
changes to the Internal Revenue Code enacted into law in the prior
year. To the extent possible, the report shall contain an estimate of
the revenue effect of conforming California law to each of those
changes.
(B) In the event that changes to the Internal Revenue Code are
enacted after September 15 of any year, the report described in
subparagraph (A) shall be submitted to the Legislature within 120
days after signature by the President of the United States, rather
than the 10th of January.
(2) The report required by this section shall be made available to
the public.
(3) It is the intent of the Legislature that the policy committee
of each house of the Legislature hold at least one public hearing on
the report required by this section.
(b) For any introduced bill which proposes changes in any of the
dates in Section 17024.5, the Franchise Tax Board shall prepare a
complete analysis of the bill which describes all changes to state
law which will automatically occur by reference to federal law as of
the changed date. The Franchise Tax Board shall immediately update
and supplement that analysis upon any amendment to the bill. That
analysis shall be made available to the public and shall be submitted
to the Legislature for publication in the daily journal of each
house of the Legislature. The digest of the Legislative Counsel shall
indicate that an analysis of the bill shall be prepared by the
Franchise Tax Board and printed in the daily journal of each house of
the Legislature.
19523. If the Secretary of the Treasury has, under the authority of
Section 330(c) of Title 31 of the United States Code:
(a) Assessed a penalty under Section 6701(a) of the Internal
Revenue Code, and
(b) Provided that appraisals by an appraiser shall not have any
probative effect in any administrative proceeding before the
Department of the Treasury or the Internal Revenue Service, and
(c) Barred that appraiser from presenting evidence or testimony in
that proceeding, then appraisals by that person shall be presumed to
have no probative effect in any administrative proceeding before the
State Board of Equalization or the Franchise Tax Board.
19523.5. (a) If the United States Secretary of the Treasury has,
under the authority of Section 330(b) of Subchapter II of Chapter 3
of Subtitle 1 of Title 31 of the United States Code, suspended or
disbarred a person from practice before the United States Department
of the Treasury, the Franchise Tax Board shall, after notice and
opportunity for a proceeding, suspend or disbar that person from
practice before the Franchise Tax Board during the period of federal
suspension or disbarment, unless the action of the United State
Secretary of the Treasury was clearly erroneous.
(b) For purposes of this section, both of the following
definitions apply:
(1) "Practice" or "practices" means all matters connected with a
presentation to the Franchise Tax Board or any of its officers or
employees relating to a taxpayer's rights, privileges, or liabilities
under laws or regulations administered by the Franchise Tax Board.
(2) "Presentations" means, but is not limited to, preparing and
filing documents, corresponding and communicating with the Franchise
Tax Board, and representing a client at conferences, hearings, and
meetings.
(c) (1) Every person who practices before the Franchise Tax Board
and is suspended or disbarred from practice before the United States
Department of the Treasury shall notify the Franchise Tax Board, in
writing, within 45 days of the issuance of a final order disbarring
or suspending the person pursuant to Section 10.80 of Subpart D of
Part 10 of Subtitle A of Title 31 of the Code of Federal Regulations,
revised as of July 26, 2002.
(2) Any person that fails to notify the Franchise Tax Board
pursuant to paragraph (1) shall be subject to a penalty of five
thousand dollars ($5,000).
(d) The written notice required by subdivision (c) shall concede
the accuracy of the federal action, or state the reason or reasons
why the federal action is clearly erroneous.
(e) Any person that has been suspended or disbarred from practice
before the Franchise Tax Board may seek review of that determination
by bringing an action pursuant to Section 1085 of the Code of Civil
Procedure.
(f) The Franchise Tax Board may prescribe any regulations
necessary to carry out the purposes of this section.
(g) This section shall be effective for final federal orders of
disbarment or suspension issued on or after the enactment date of
this act.
19525. The Franchise Tax Board, under regulations prescribed by the
Franchise Tax Board, may establish a reward program for information
resulting in the identification of underreported or unreported income
subject to taxes imposed by Part 10 (commencing with Section 17001)
or Part 11 (commencing with Section 23001). Any reward may not exceed
10 percent of the taxes collected as a result of the information
provided. Any person employed by or under contract with any state or
federal tax collection agency shall not be eligible for a reward
provided for pursuant to this section.
19526. The Franchise Tax Board shall develop and maintain a
taxpayer cross-reference file which shall be used as a part of a
nonwage earner filing enforcement program. The taxpayer
cross-reference file may include information from taxpayer
identification information available from tax returns, application
forms, other documents, and any other files as already exist and are
maintained by the state's major revenue agencies. The taxpayer
cross-reference file shall only be used for the purposes of tax law
enforcement and administration.
19528. (a) Notwithstanding any other provision of law, the
Franchise Tax Board may require any board, as defined in Section 22
of the Business and Professions Code, and the State Bar, the
Department of Real Estate, and the Insurance Commissioner
(hereinafter referred to as licensing board) to provide to the
Franchise Tax Board the following information with respect to every
licensee:
(1) Name.
(2) Address or addresses of record.
(3) Federal employer identification number (if the entity is a
partnership) or social security number (for all others).
(4) Type of license.
(5) Effective date of license or renewal.
(6) Expiration date of license.
(7) Whether license is active or inactive, if known.
(8) Whether license is new or renewal.
(b) The Franchise Tax Board may do the following:
(1) Send a notice to any licensee failing to provide the
identification number or social security number as required by
subdivision (a) of Section 30 of the Business and Professions Code
and subdivision (a) of Section 1666.5 of the Insurance Code,
describing the information that was missing, the penalty associated
with not providing it, and that failure to provide the information
within 30 days will result in the assessment of the penalty.
(2) After 30 days following the issuance of the notice described
in paragraph (1), assess a one hundred dollar ($100) penalty, due and
payable upon notice and demand, for any licensee failing to provide
either its federal employer identification number (if the licensee is
a partnership) or his or her social security number (for all others)
as required in Section 30 of the Business and Professions Code and
Section 1666.5 of the Insurance Code.
(c) Notwithstanding Chapter 3.5 (commencing with Section 6250) of
Division 7 of Title 1 of the Government Code, the information
furnished to the Franchise Tax Board pursuant to Section 30 of the
Business and Professions Code or Section 1666.5 of the Insurance Code
shall not be deemed to be a public record and shall not be open to
the public for inspection.
19529. The Franchise Tax Board shall notify the Registrar of
Contractors of the Contractors State License Board, the Director of
Employment Development, the Economic and Employment Enforcement
Coalition, and the Joint Enforcement Strike Force on the Underground
Economy upon the arraignment of or the filing of criminal charges
against any individual for a violation of Chapter 9 (commencing with
Section 19701) of this Part if that individual engages in the
business or acts in the capacity of a contractor within this state
pursuant to a license issued by the Contractors State License Board
or if that individual unlawfully engages in the business or acts in
the capacity of a contractor within this state without having a
license therefor.
19530. The Franchise Tax Board shall preserve reports and tax
returns for three years from the due dates thereof and thereafter
until it orders them to be destroyed. Information returns and other
documents filed pursuant to Article 4 (commencing with Section 18631)
or Article 5 (commencing with Section 18661) of Chapter 2 shall be
preserved until the Franchise Tax Board orders them to be destroyed.
19532. (a) The Franchise Tax Board may charge fees for its "Tax
News" publication and its "California Package X." The fees shall
include preparation and production costs and other related costs,
including, but not limited to, the handling of requests, printing,
and postage.
(b) This section shall not apply to documents distributed to
public distribution sites.
(c) Fees received under this section shall be handled in
accordance with Section 19605.
19533. In the event the debtor has more than one debt being
collected by the Franchise Tax Board and the amount collected by the
Franchise Tax Board is insufficient to satisfy the total amount
owing, the amount collected shall be applied in the following
priority:
(a) Payment of any delinquencies transferred for collection under
Article 5 (commencing with Section 19270) of Chapter 5.
(b) Payment of any taxes, additions to tax, penalties, interest,
fees, or other amounts due and payable under Part 7.5 (commencing
with Section 13201), Part 10 (commencing with Section 17001), Part 11
(commencing with Section 23001), or this part, and amounts
authorized to be collected under Section 19722.
(c) Payment of delinquent wages collected pursuant to the Labor
Code.
(d) Payment of delinquencies collected under Section 10878.
(e) Payment of any amounts due that are referred for collection
under Article 5.5 (commencing with Section 19280) of Chapter 5.
(f) Payment of any amounts that are referred for collection
pursuant to Section 62.9 of the Labor Code.
(g) Payment of delinquent penalties collected for the Department
of Industrial Relations pursuant to the Labor Code.
(h) Payment of delinquent fees collected for the Department of
Industrial Relations pursuant to the Labor Code.
(i) Payment of delinquencies referred by the Student Aid
Commission.
(j) Notwithstanding the payment priority established by this
section, voluntary payments designated by the taxpayer as payment for
a personal income tax liability or as a payment on amounts
authorized to be collected under Section 19722, shall not be applied
pursuant to this priority, but shall instead be applied as
designated.