Balance due Notice

[shalom yaes]

What is the name of your state? CA
I have recently received a balance due notice from FTB for tax years 1996,1997,1998
How did they reach the numbers on the tax fields.
I believe these are the numbers from 1099's issued for those years.
If i file the returns for those years the deduction will reduce the taxes to nothing or a very few dollars.

I do not have the 1099's for those years but I believe that's from where the FTB got their numbers somehow they are considering the whole thing as income without any deductions.

What Should I do?

 

[moburkes]

Who is the FTB?

 

[CourtClerk]

Who is the FTB?

Moburkes, FTB = Franchise Tax Board (California's taxing agency -- collects state taxes)

OP:

The numbers they received are from the 1099's that you received and were filed by the person that issued them. What should you do? Pay the bill. If you want to have them consider deductions and the like, you'll need to figure out first if you filed for that year, if you did, amend your taxes. If you didn't file the returns, but you're still looking at some penalties and interest so get out your checkbook.

 

[FlyingRon]

How did they reach the numbers on the tax fields.
I believe these are the numbers from 1099's issued for those years.
If i file the returns for those years the deduction will reduce the taxes to nothing or a very few dollars.

It's hard to say. 1099's would be a good guess, but they probably also could be tracking the payments another way (such as from the payer's tax information). Since you didn't bother to file, they pretty much have freedom to estimate what you owe anyway they choose.

What Should I do?

Make a good faith effort to come up with the missing returns and file them? You probably need a decent accountant.

 

[LdiJ]

What is the name of your state? CA
I have recently received a balance due notice from FTB for tax years 1996,1997,1998
How did they reach the numbers on the tax fields.
I believe these are the numbers from 1099's issued for those years.
If i file the returns for those years the deduction will reduce the taxes to nothing or a very few dollars.

I do not have the 1099's for those years but I believe that's from where the FTB got their numbers somehow they are considering the whole thing as income without any deductions.

What Should I do?

You can try to get income transcripts from the IRS for those years. Those will list the
1099s. (you do realize that you are going to have to deal with federal taxes as well?)
It may take a while to get them, but they are your best source for the 1099s. CA is notorious for coming up with completely fictional (guesstimates) numbers when someone has not filed a return, therefore you are going to want proof of the exact income.

 

[abezon]

Never pay a tax bill until you examine the underlying return. The FTB has a tendency to lose your return in their computers, then send you a bill for the maximum possible bill. With 10 years of interest + penalties tacked on. Greedy bast*rds.

You can get copies of your 1099s from the IRS. Just ask for an income transcript & a transcript of your federal returns from those years. The federal return might show that you paid a balance due to CA in 1996-1999, which would indicate that you filed the return in the first place! At the very least, you'd get credit for the tax paid.

Take all information to a tax pro & file the returns. Final interest & penalties are based on the final balance due, so reducing the underlying bill reduces the total bill even more.

Good luck.

 

[tranquility]

We once had a contractor get such a notice with a huge amount of income (to him) on it. He didn't file either and the FTB said they based the income on the average income of a person with a contractor's license. It wasn't correct, but the number sure motivated the person to file.