19701. Any person who does any of the following is liable for a
penalty of not more than five thousand dollars ($5,000):
(a) With or without intent to evade any requirement of Part 10
(commencing with Section 17001), Part 11 (commencing with Section
23001), or this part or any lawful requirement of the Franchise Tax
Board, repeatedly over a period of two years or more, fails to file
any return or to supply any information required, or who, with or
without that intent, makes, renders, signs, or verifies any false or
fraudulent return or statement, or supplies any false or fraudulent
information, resulting in an estimated delinquent tax liability of at
least fifteen thousand dollars ($15,000).
(b) Aids, abets, advises, encourages, or counsels any person to
evade the tax imposed by Part 10 (commencing with Section 17001) or
Part 11 (commencing with Section 23001) by not filing any return or
supplying any information required under Part 10 (commencing with
Section 17001), Part 11 (commencing with Section 23001), or this
part, or, by making, rendering, signing, or verifying any false or
fraudulent return or statement, or by supplying false or fraudulent
information.
(c) Under this part, is required to pay any estimated tax or tax,
who willfully fails to pay that estimated tax or tax, at the time or
times required by law or regulations.
The penalty shall be recovered in the name of the people in any
court of competent jurisdiction. Counsel for the Franchise Tax Board
may, upon request of the district attorney or other prosecuting
attorney, assist the prosecuting attorney in presenting the law or
facts to recover the penalty at the trial of a criminal proceeding
for violation of this section.
That person is also guilty of a misdemeanor and shall upon
conviction be fined not to exceed five thousand dollars ($5,000) or
be imprisoned not to exceed one year, or both, at the discretion of
the court, together with costs of investigation and prosecution. The
preceding sentence shall not apply to any person who is mentally
incompetent, or suffers from dementia, Alzheimer's disease, or
similar condition.
(d) For purposes of subdivision (a), the president of a
corporation, or the chief operating officer, is the person presumed
to be responsible for filing any return or supplying information
required from that corporation.
19701.5. (a) Any person who signs his or her spouse's name on any
income tax return, or any schedules or attachments thereto, or who
files electronically pursuant to Section 18621.5, without the consent
of the spouse as provided in subdivision (b), is guilty of a
misdemeanor and shall upon conviction be fined an amount not to
exceed five thousand dollars ($5,000) or be imprisoned for a term not
to exceed one year, or both, at the discretion of the court,
together with costs of investigation and prosecution.
(b) Notwithstanding subdivision (a), any person who signs his or
her spouse's name shall not be guilty of a misdemeanor when one
spouse is physically unable by reason of disease or injury to sign a
joint return, and the other spouse, with the oral consent of the one
who is incapacitated, signs the incapacitated spouse's name in the
proper place on the return followed by the words "By ____, Husband
(or Wife)," and by the signature of the signing spouse in his or her
own right, provided that a dated statement signed by the spouse who
is signing the return is attached to and made a part of the return
stating each of the following:
(1) The name of the return being filed.
(2) The taxable year.
(3) The reason for the inability of the spouse who is
incapacitated to sign the return.
(4) That the spouse who is incapacitated consented to the signing
of the return and that the taxpayer and his or her agent, if any, are
responsible for the return as made and incur liability for the
penalties provided for erroneous, false, or fraudulent returns.
(c) The penalties provided by this section are cumulative and
shall not be construed as restricting any other penalty provided by
law based upon the same facts, including any penalty under Section
470 of the Penal Code. However, an act or omission which is made
punishable in different ways by this section and different provisions
of the Penal Code shall not be punished under more than one
provision.
19702. The prosecutor may, with the consent of the Franchise Tax
Board, compromise any penalty for which he or she may bring action
under this chapter. The penalties provided by this chapter are
additional to all other penalties provided in Part 10 (commencing
with Section 17001), Part 11 (commencing with Section 23001), or this
part.
19703. The certificate of the Franchise Tax Board to the effect
that a return has not been filed or that information has not been
supplied as required by this part is prima facie evidence that the
return has not been filed or that the information has not been
supplied.
19704. Any action or prosecution under this chapter shall be
instituted within six years after commission of the offense.
19705. (a) Any person who does any of the following shall be guilty
of a felony and, upon conviction, shall be fined not more than fifty
thousand dollars ($50,000) or imprisoned in the state prison, or
both, together with the costs of investigation and prosecution:
(1) Willfully makes and subscribes any return, statement, or other
document, that contains or is verified by a written declaration that
it is made under penalty of perjury, and he or she does not believe
to be true and correct as to every material matter.
(2) Willfully aids or assists in, or procures, counsels, or
advises the preparation or presentation under, or in connection with
any matter arising under, the Personal Income Tax Law or the
Corporation Tax Law, of a return, affidavit, claim, or other
document, that is fraudulent or is false as to any material matter,
whether or not that falsity or fraud is with the knowledge or consent
of the person authorized or required to present that return,
affidavit, claim, or document.
(3) Simulates or falsely or fraudulently executes or signs any
bond, permit, entry, or other document required by the provisions of
the Personal Income Tax Law or the Corporation Tax Law, or by any
regulation pursuant to that law, or procures the same to be falsely
or fraudulently executed or advises, aids in, or connives at that
execution.
(4) Removes, deposits, or conceals, or is concerned in removing,
depositing, or concealing, any goods or commodities for or in respect
whereof any tax is or shall be imposed, or any property upon which
levy is authorized by Chapter 5 (commencing with Section 19201); or
Chapter 8 (commencing with Section 688.010) of Division 1 of, and
Chapter 5 (commencing with Section 706.010) of Division 2 of, Title 9
of the Code of Civil Procedure, with intent to evade or defeat the
assessment or collection of any tax, additions to tax, penalty, or
interest imposed by Part 10 (commencing with Section 17001), Part 11
(commencing with Section 23001), or this part.
(5) In connection with any settlement under Section 19442, or
offer of that settlement, or in connection with any closing agreement
under Section 19441 or offer to enter into that agreement, or
compromise under Section 19443, or offer of that compromise,
willfully does any of the following:
(A) Conceals from any officer or employee of this state any
property belonging to the estate of a taxpayer or other person liable
in respect of the tax.
(B) Receives, withholds, destroys, mutilates, or falsifies any
book, document, or record, or makes any false statement, relating to
the estate or financial condition of the taxpayer or other person
liable in respect of the tax.
(b) In the case of a corporation, the fifty thousand dollars
($50,000) limitation specified in subdivision (a) shall be increased
to two hundred thousand dollars ($200,000).
(c) The fact that an individual's name is signed to a return,
statement, or other document filed, including a return, statement, or
other document filed using electronic technology pursuant to Section
18621.5, shall be prima facie evidence for all purposes that the
return, statement, or other document was actually signed by him or
her.
(d) For purposes of this section, "person" means the taxpayer, any
member of the taxpayer's family, any corporation, agent, fiduciary,
or representative of, or any other individual or entity acting on
behalf of, the taxpayer, or any other corporation or entity owned or
controlled by the taxpayer, directly or indirectly, or which owns or
controls the taxpayer, directly or indirectly.
(e) The changes made to this section by the act adding this
subdivision apply to offers made on or after January 1, 1999.
19706. Any person or any officer or employee of any corporation
who, within the time required by or under the provisions of this
part, willfully fails to file any return or to supply any information
with intent to evade any tax imposed by Part 10 (commencing with
Section 17001) or Part 11 (commencing with Section 23001), or who,
willfully and with like intent, makes, renders, signs, or verifies
any false or fraudulent return or statement or supplies any false or
fraudulent information, is punishable by imprisonment in the county
jail not to exceed one year, or in the state prison, or by fine of
not more than twenty thousand dollars ($20,000), or by both the fine
and imprisonment, at the discretion of the court, together with the
costs of investigation and prosecution.
19707. The place of trial for the offenses enumerated in this
chapter shall be in the county of residence or principal place of
business of the defendant or defendants at the time of commission of
the offense. However, if the defendant or defendants had no residence
or principal place of business in this state at the time of
commission of the offense, the trial shall be held in the County of
Sacramento.
In a criminal case charging a defendant or defendants with
committing an offense enumerated in this chapter, the place of trial
may be as set forth in this section, or as provided for in Section
1462.2 or Chapter 1 (commencing with Section 777) of Title 3 of Part
2 of the Penal Code.
19708. Any person required under this part to collect, account for,
and pay over any tax or amount required to be withheld who willfully
fails to collect or truthfully account for and pay over the tax or
amount shall, in addition to other penalties provided by law, be
guilty of a felony, and, upon conviction thereof, shall be fined not
more than two thousand dollars ($2,000) or imprisoned in the state
prison, or both.
19709. Any person who, with or without intent to evade, fails to
withhold, pursuant to Section 18662 or 18666, or pay over any tax
withheld, is guilty of a misdemeanor, and, upon conviction be fined
an amount not to exceed one thousand dollars ($1,000) or imprisoned
for not more than one year, or both, at the discretion of the court.
19710. If a taxpayer fails to file a return within 60 days after
the Franchise Tax Board issues a notice and demand for the return,
the Franchise Tax Board may petition the court for a writ of mandate
to require the taxpayer to file a return. The judgment shall include
costs in favor of the prevailing party.
19711. Any individual required to supply information to his or her
employer under Section 13040, 13041, or 13042 of the Unemployment
Insurance Code, who willfully supplies false or fraudulent
information, or who willfully fails to supply information thereunder
which would require an increase in the tax to be withheld under
Section 13020 of the Unemployment Insurance Code, shall, in addition
to any other penalty otherwise provided by law, upon conviction
thereof, be fined not more than one thousand dollars ($1,000), or
imprisoned not more than one year, or both.
19712. Any tax preparer, as defined in subdivision (b) of Section
19169, who endorses or otherwise negotiates (directly or through an
agent) any warrant made in respect of the taxes imposed by Part 10
(commencing with Section 17001) or Part 11 (commencing with Section
23001) which is issued to a taxpayer (other than the tax preparer)
shall, in addition to other penalties provided by law, be guilty of a
misdemeanor, and upon conviction thereof, shall be fined not more
than one thousand dollars ($1,000) or imprisoned not more than one
year, or both, together with the costs of prosecution.
This section shall not apply where the tax preparer has advanced
the taxpayer an amount of money equal to or greater than the amount
of the taxpayer's tax refund.
19713. (a) Any person or employer who fails to comply with
subdivision (b) of Section 19009 shall, in addition to any other
penalties provided by law, be guilty of a misdemeanor, and, upon
conviction thereof, shall be fined no more than five thousand dollars
($5,000), or imprisoned not more than one year, or both, together
with the costs of prosecution.
(b) This section shall not apply:
(1) To any person or employer, if that person or employer shows
that there was reasonable doubt as to (A) whether the law required
collection of the tax, or (B) who was required by law to collect the
tax.
(2) To any person or employer, if that person or employer shows
that the failure to comply with the provisions of subdivision (b) of
Section 19009 was due to circumstances beyond his or her control.
(c) For purposes of paragraph (2), a lack of funds existing
immediately after the payment of wages (whether or not created by the
payment of the wages) shall not be considered to be circumstances
beyond the control of a person or employer.
19714. Whenever it appears to the State Board of Equalization or
any court of record of this state that proceedings before it under
this part have been instituted or maintained by the taxpayer
primarily for delay or that the taxpayer's position in the
proceedings is frivolous or groundless, or that the taxpayer
unreasonably failed to pursue available administrative remedies, a
penalty in an amount not in excess of five thousand dollars ($5,000)
shall be imposed. Any penalty so imposed shall be paid upon notice
and demand from the Franchise Tax Board and shall be collected as a
tax.
19715. (a) A civil action in the name of the State of California to
enjoin any person from further engaging in specified conduct may be
commenced at the request of the Franchise Tax Board. Any action under
this section shall be brought in accordance with Section 19707. The
court may exercise its jurisdiction over that action separate and
apart from any other action brought by the State of California
against that person.
(b) In any action under subdivision (a), the court may enjoin the
person from engaging in the specified conduct or in any other
activity subject to penalty under this part, if the court finds both
of the following:
(1) That the person has engaged in any specified conduct.
(2) That injunctive relief is appropriate to prevent recurrence of
that specified conduct.
(c) For purposes of this section, the term "specified conduct"
means any action, or failure to take action, subject to penalty under
Section 19173, 19174, 19177, or 19178.
19717. (a) The prevailing party may be awarded a judgment for
reasonable litigation costs incurred, in the case of any civil
proceeding brought by or against the State of California in a court
of record of this state in connection with the determination,
collection, or refund of any tax, interest, or penalty under this
part.
(b) (1) A judgment for reasonable litigation costs shall not be
awarded under subdivision (a) unless the court determines that the
prevailing party has exhausted all administrative remedies available
to that party under this part, including the filing of an appeal as
provided in Section 19324. Any failure to agree to an extension of
the time for the assessment of any tax shall not be taken into
account for purposes of determining whether the prevailing party
meets the requirements of the preceding sentence.
(2) An award under subdivision (a) shall be made only for
reasonable litigation costs which are allocable to the State of
California and not to any other party to the action or proceeding.
(3) No award for reasonable litigation costs may be made under
subdivision (a) with respect to any portion of the civil proceeding
during which the prevailing party has unreasonably protracted that
proceeding.
(c) For purposes of this section:
(1) "Reasonable litigation costs" includes any of the following:
(A) Reasonable court costs.
(B) Based upon prevailing market rates for the kind or quality of
services furnished, any of the following:
(i) The reasonable expenses of expert witnesses in connection with
the civil proceeding, except that no expert witness shall be
compensated at a rate in excess of the highest rate of compensation
for expert witnesses paid by the State of California.
(ii) The reasonable cost of any study, analysis, engineering
report, test, or project which is found by the court to be necessary
for the preparation of the party's case.
(iii) Reasonable fees paid or incurred for the services of
attorneys in connection with the civil proceeding, except that those
fees shall not be in excess of one hundred twenty-five dollars ($125)
per hour unless the court determines that a special factor, such as
the limited availability of qualified attorneys for the proceeding,
the difficulty of the issues presented in the case, or the local
availability of tax expertise justifies a higher rate. In the case of
each calendar year beginning with calendar year 2001, the Franchise
Tax Board shall recompute the dollar amount referred to in the
preceding sentence. That computation shall be made by increasing the
amount in this clause by an amount equal to the cost-of-living
adjustment determined under subdivision (h) of Section 17041. If any
resulting dollar amount is not a multiple of ten dollars ($10), that
dollar amount shall be rounded to the nearest multiple of ten dollars
($10).
(iv) The court may award reasonable attorney fees under
subdivision (a) in excess of the attorney fees paid or incurred if
the fees are less than the reasonable attorneys' fees because the
attorney is representing the prevailing party for no fee or for a fee
which (taking into account all the facts and circumstances) is no
more than a nominal fee. This clause shall apply only if the award is
paid to the attorney or the attorney's employer.
(2) (A) "Prevailing party" means any party to any proceeding
described in subdivision (a) (other than the State of California or
any creditor of the taxpayer involved) that meets either of the
following criteria:
(i) Has substantially prevailed with respect to the amount in
controversy.
(ii) Has substantially prevailed with respect to the most
significant issue or set of issues presented.
(B) (i) A party shall not be treated as the prevailing party in a
proceeding to which subdivision (a) applies if the State of
California establishes that its position in the proceeding was
substantially justified.
(ii) For purposes of clause (i), the position of the State of
California shall be presumed not to be substantially justified if the
Franchise Tax Board did not follow its applicable published guidance
in the administrative proceeding. This presumption may be rebutted.
(iii) For purposes of clause (ii), the term "applicable published
guidance" means either of the following:
(I) A regulation, legal ruling, notice, information release, or
announcement.
(II) Any chief counsel ruling or determination letter issued to
the taxpayer.
(iv) For purposes of clause (i), in determining whether the
position of the Franchise Tax Board was substantially justified, the
court shall take into account whether the Franchise Tax Board has
lost in any California Court of Appeal in another district on
substantially similar issues, as reflected in a decision certified
for publication.
(C) Any determination under this paragraph as to whether a party
is a prevailing party shall be made by either of the following:
(i) The court.
(ii) An agreement of the parties.
(3) The term "civil proceeding" includes a civil action.
(d) For purposes of this section, in the case of multiple actions
which could have been joined or consolidated, or a case or cases
involving a return or returns of the same taxpayer (including joint
returns of married individuals) which could have been joined in a
single proceeding in the same court, the actions or cases shall be
treated as one civil proceeding regardless of whether the joinder or
consolidation actually occurs, unless the court in which the action
is brought determines, in its discretion, that it would be
inappropriate to treat the actions or cases as joined or consolidated
for purposes of this section.
(e) An order granting or denying an award for reasonable
litigation costs under subdivision (a), in whole or in part, shall be
incorporated as a part of the decision or judgment in the case and
shall be subject to appeal in the same manner as the decision or
judgment.
(f) For purposes of this section, "position of the State of
California" includes either of the following:
(1) The position taken by the State of California in the civil
proceeding.
(2) Any administrative action or inaction by the Franchise Tax
Board (and all subsequent administrative action or inaction) upon
which that proceeding is based.
(g) The amendments made by the act amending this subdivision are
effective for costs incurred and services performed more than 180
days after the effective date of the act amending this subdivision.
19718. Any employer or agent of an employer who provides a wage
statement or similar document to any undocumented worker or former
undocumented worker at that person's request for the purpose of
documenting that person's eligibility for legalization pursuant to
the federal Immigration Reform and Control Act (Public Law 99-603),
shall not be liable for any penalty or criminal or civil violation
under this part relative to the undocumented worker or former
undocumented worker based on any facts disclosed in the wage
statement or similar document so provided.
Nothing in this section shall be construed to limit the liability
under any provision of law of any person who engages in the
procurement or production of false or fraudulent wage statements or
similar documents to any person for purposes of legalization under
the federal Immigration Reform and Control Act.
This section does not apply to penalties assessed or criminal
actions filed prior to May 1, 1987.
This section does not apply where the Employment Development
Department, through independent means, discovers that an employer has
withheld personal income tax and disability insurance contributions
from workers' paychecks and has not remitted those moneys to the
department.
The immunity from liability pursuant to this section shall apply
only to facts disclosed in the wage statement or similar document
provided on or after the effective date of this section and only
until the date of the termination of the legalization provisions for
agricultural and nonagricultural workers of the federal Immigration
Reform and Control Act. However, the immunity from liability pursuant
to this section shall continue until the cause of action is tolled
by the applicable statute of limitations.
19719. (a) Any person who attempts or purports to exercise the
powers, rights, and privileges of a corporation that has been
suspended pursuant to Section 23301 or who transacts or attempts to
transact intrastate business in this state on behalf of a foreign
corporation, the rights and privileges of which have been forfeited
pursuant to the section, is punishable by a fine of not less than two
hundred fifty dollars ($250) and not exceeding one thousand dollars
($1,000), or by imprisonment not exceeding one year, or both fine and
imprisonment.
(b) This section shall not apply to any insurer, or to counsel
retained by an insurer on behalf of the suspended corporation, who
provides a defense for a suspended corporation in a civil action
based upon a claim for personal injury, property damage, or economic
losses against the suspended corporation, and, in conjunction with
this defense, prosecutes subrogation, contribution, or indemnity
rights against persons or entities in the name of the suspended
corporation.
(c) Nothing in this section shall create or limit any obligation
upon an insurer to defend a suspended corporation.
19720. (a) Any person who does any of the following is liable for a
penalty of not more than five thousand dollars ($5,000):
(1) Utters, passes, or negotiates a state-issued income tax refund
warrant generated as a result of the filing of a return knowing that
the recipient is not entitled to the refund.
(2) Procures a state-issued income tax refund, in any form,
generated as a result of the filing of a return knowing that the
recipient is not entitled to the refund.
(3) Aids, abets, advises, encourages, or counsels any individual
to utter, pass, or negotiate a state-issued income tax refund
warrant, or to procure a state-issued income tax refund, in any form,
generated as a result of the filing of a return, knowing that the
recipient is not entitled to a refund.
(b) The fact that an individual's name is endorsed to a
state-issued refund warrant shall be prima facie evidence for all
purposes that the refund warrant was actually signed by him or her.
(c) The penalty shall be recovered in the name of the people in
any court of competent jurisdiction. Counsel for the Franchise Tax
Board may, upon request of the district attorney or other prosecuting
attorney, assist the prosecuting attorney in presenting the law or
facts to recover the penalty at the trial of a criminal proceeding
for violation of this section.
(d) The person is also guilty of a misdemeanor and upon conviction
shall be punishable by a fine not to exceed ten thousand dollars
($10,000) or by imprisonment not to exceed one year, or both, at the
discretion of the court, together with costs of investigation and
prosecution.
(e) Any individual guilty under this part shall be subject to
Section 502.01 of the Penal Code.
19721. (a) Any person who, with intent to defraud, does any of the
following is liable for a penalty of not more than ten thousand
dollars ($10,000):
(1) Willfully utters, passes, or negotiates a state-issued income
tax refund warrant generated as a result of the filing of a return
knowing that the recipient is not entitled to the refund.
(2) Willfully procures a state-issued income tax refund, in any
form, generated as a result of the filing of a return knowing that
the recipient is not entitled to the refund.
(3) Willfully aids, abets, advises, encourages, or counsels any
individual to utter, pass, or negotiate a state-issued income tax
refund warrant, or to procure a state-issued income tax refund, in
any form, generated as a result of the filing of a return, knowing
the recipient is not entitled to the refund.
(b) The person is also punishable by imprisonment in a county jail
not to exceed one year, or in the state prison, or by a fine not to
exceed fifty thousand dollars ($50,000), or by both that fine and
imprisonment, at the discretion of the court, together with the costs
of investigation and prosecution.
(c) The fact that an individual's name is endorsed to a
state-issued refund warrant shall be prima facie evidence for all
purposes that the refund warrant was actually signed by him or her.
(d) The penalty shall be recovered in the name of the people in
any court of competent jurisdiction. Counsel for the Franchise Tax
Board may, upon request of the district attorney or other prosecuting
attorney, assist the prosecuting attorney in presenting the law or
facts to recover the penalty at the trial or a criminal proceeding
for violation of this section.
(e) Any individual guilty under this part shall be subject to
Section 502.01 of the Penal Code.
19722. (a) (1) Restitution orders or any other amounts imposed by a
court of competent jurisdiction for criminal offenses upon a person
or any other entity that are due and payable to the Franchise Tax
Board may be collected by the Franchise Tax Board in any manner
provided by law for collection of a delinquent income tax liability,
including, but not limited to, issuance of an order and levy under
Article 4 (commencing with Section 706.070) of Chapter 5 of Division
2 of Title 9 of Part 2 of the Code of Civil Procedure in the manner
provided for earnings withholding orders for taxes.
(2) Amounts imposed by a court of competent jurisdiction as an
order of restitution for criminal offenses shall be treated as final
and due and payable to the State of California on the date that
amount is established on the records of the Franchise Tax Board.
(b) Part 10 (commencing with Section 17001), this part, Part 10.7
(commencing with Section 21001), and Part 11 (commencing with Section
23001) shall apply to amounts collected under this section in the
same manner and with the same force and effect and to the full extent
as if the language of those laws had been incorporated in full into
this section, except to the extent that any provision is either
inconsistent with this section or is not relevant to this section.
(c) Notwithstanding Chapter 6 (commencing with Section 19301), no
refund or credit may be allowed for any amounts paid or payments
applied under this section.
(d) Amounts authorized to be collected pursuant to this section
shall accrue interest at the greater of the rate applicable to the
amounts being collected or the rate provided under Section 19521 from
and after the date the amounts are established on the records of the
Franchise Tax Board.
(e) Amounts authorized to be collected pursuant to this section
are not subject to Section 19255.
(f) Notwithstanding Section 19204 or Chapter 14 (commencing with
Section 7150) of Division 7 of Title 1 of the Government Code, any
portion of the amounts authorized to be collected under this section
that remain unsatisfied may be collected by the recording of a Notice
of State Tax Lien. The Franchise Tax Board may record or extend a
recorded Notice of State Tax Lien at any time until the amount due,
including any accrued interest, is paid in full.
(g) The Franchise Tax Board may retain those amounts ordered to be
paid by a court of competent jurisdiction by a person or any other
entity for the costs of investigation incurred by the Franchise Tax
Board.
(h) This section shall apply on and after January 1, 2011, to
amounts authorized to be collected pursuant to this section that are
due and payable to the Franchise Tax Board before, on, or after
January 1, 2011.
19701. Any person who does any of the following is liable for a
penalty of not more than five thousand dollars ($5,000):
(a) With or without intent to evade any requirement of Part 10
(commencing with Section 17001), Part 11 (commencing with Section
23001), or this part or any lawful requirement of the Franchise Tax
Board, repeatedly over a period of two years or more, fails to file
any return or to supply any information required, or who, with or
without that intent, makes, renders, signs, or verifies any false or
fraudulent return or statement, or supplies any false or fraudulent
information, resulting in an estimated delinquent tax liability of at
least fifteen thousand dollars ($15,000).
(b) Aids, abets, advises, encourages, or counsels any person to
evade the tax imposed by Part 10 (commencing with Section 17001) or
Part 11 (commencing with Section 23001) by not filing any return or
supplying any information required under Part 10 (commencing with
Section 17001), Part 11 (commencing with Section 23001), or this
part, or, by making, rendering, signing, or verifying any false or
fraudulent return or statement, or by supplying false or fraudulent
information.
(c) Under this part, is required to pay any estimated tax or tax,
who willfully fails to pay that estimated tax or tax, at the time or
times required by law or regulations.
The penalty shall be recovered in the name of the people in any
court of competent jurisdiction. Counsel for the Franchise Tax Board
may, upon request of the district attorney or other prosecuting
attorney, assist the prosecuting attorney in presenting the law or
facts to recover the penalty at the trial of a criminal proceeding
for violation of this section.
That person is also guilty of a misdemeanor and shall upon
conviction be fined not to exceed five thousand dollars ($5,000) or
be imprisoned not to exceed one year, or both, at the discretion of
the court, together with costs of investigation and prosecution. The
preceding sentence shall not apply to any person who is mentally
incompetent, or suffers from dementia, Alzheimer's disease, or
similar condition.
(d) For purposes of subdivision (a), the president of a
corporation, or the chief operating officer, is the person presumed
to be responsible for filing any return or supplying information
required from that corporation.
19701.5. (a) Any person who signs his or her spouse's name on any
income tax return, or any schedules or attachments thereto, or who
files electronically pursuant to Section 18621.5, without the consent
of the spouse as provided in subdivision (b), is guilty of a
misdemeanor and shall upon conviction be fined an amount not to
exceed five thousand dollars ($5,000) or be imprisoned for a term not
to exceed one year, or both, at the discretion of the court,
together with costs of investigation and prosecution.
(b) Notwithstanding subdivision (a), any person who signs his or
her spouse's name shall not be guilty of a misdemeanor when one
spouse is physically unable by reason of disease or injury to sign a
joint return, and the other spouse, with the oral consent of the one
who is incapacitated, signs the incapacitated spouse's name in the
proper place on the return followed by the words "By ____, Husband
(or Wife)," and by the signature of the signing spouse in his or her
own right, provided that a dated statement signed by the spouse who
is signing the return is attached to and made a part of the return
stating each of the following:
(1) The name of the return being filed.
(2) The taxable year.
(3) The reason for the inability of the spouse who is
incapacitated to sign the return.
(4) That the spouse who is incapacitated consented to the signing
of the return and that the taxpayer and his or her agent, if any, are
responsible for the return as made and incur liability for the
penalties provided for erroneous, false, or fraudulent returns.
(c) The penalties provided by this section are cumulative and
shall not be construed as restricting any other penalty provided by
law based upon the same facts, including any penalty under Section
470 of the Penal Code. However, an act or omission which is made
punishable in different ways by this section and different provisions
of the Penal Code shall not be punished under more than one
provision.
19702. The prosecutor may, with the consent of the Franchise Tax
Board, compromise any penalty for which he or she may bring action
under this chapter. The penalties provided by this chapter are
additional to all other penalties provided in Part 10 (commencing
with Section 17001), Part 11 (commencing with Section 23001), or this
part.
19703. The certificate of the Franchise Tax Board to the effect
that a return has not been filed or that information has not been
supplied as required by this part is prima facie evidence that the
return has not been filed or that the information has not been
supplied.
19704. Any action or prosecution under this chapter shall be
instituted within six years after commission of the offense.
19705. (a) Any person who does any of the following shall be guilty
of a felony and, upon conviction, shall be fined not more than fifty
thousand dollars ($50,000) or imprisoned in the state prison, or
both, together with the costs of investigation and prosecution:
(1) Willfully makes and subscribes any return, statement, or other
document, that contains or is verified by a written declaration that
it is made under penalty of perjury, and he or she does not believe
to be true and correct as to every material matter.
(2) Willfully aids or assists in, or procures, counsels, or
advises the preparation or presentation under, or in connection with
any matter arising under, the Personal Income Tax Law or the
Corporation Tax Law, of a return, affidavit, claim, or other
document, that is fraudulent or is false as to any material matter,
whether or not that falsity or fraud is with the knowledge or consent
of the person authorized or required to present that return,
affidavit, claim, or document.
(3) Simulates or falsely or fraudulently executes or signs any
bond, permit, entry, or other document required by the provisions of
the Personal Income Tax Law or the Corporation Tax Law, or by any
regulation pursuant to that law, or procures the same to be falsely
or fraudulently executed or advises, aids in, or connives at that
execution.
(4) Removes, deposits, or conceals, or is concerned in removing,
depositing, or concealing, any goods or commodities for or in respect
whereof any tax is or shall be imposed, or any property upon which
levy is authorized by Chapter 5 (commencing with Section 19201); or
Chapter 8 (commencing with Section 688.010) of Division 1 of, and
Chapter 5 (commencing with Section 706.010) of Division 2 of, Title 9
of the Code of Civil Procedure, with intent to evade or defeat the
assessment or collection of any tax, additions to tax, penalty, or
interest imposed by Part 10 (commencing with Section 17001), Part 11
(commencing with Section 23001), or this part.
(5) In connection with any settlement under Section 19442, or
offer of that settlement, or in connection with any closing agreement
under Section 19441 or offer to enter into that agreement, or
compromise under Section 19443, or offer of that compromise,
willfully does any of the following:
(A) Conceals from any officer or employee of this state any
property belonging to the estate of a taxpayer or other person liable
in respect of the tax.
(B) Receives, withholds, destroys, mutilates, or falsifies any
book, document, or record, or makes any false statement, relating to
the estate or financial condition of the taxpayer or other person
liable in respect of the tax.
(b) In the case of a corporation, the fifty thousand dollars
($50,000) limitation specified in subdivision (a) shall be increased
to two hundred thousand dollars ($200,000).
(c) The fact that an individual's name is signed to a return,
statement, or other document filed, including a return, statement, or
other document filed using electronic technology pursuant to Section
18621.5, shall be prima facie evidence for all purposes that the
return, statement, or other document was actually signed by him or
her.
(d) For purposes of this section, "person" means the taxpayer, any
member of the taxpayer's family, any corporation, agent, fiduciary,
or representative of, or any other individual or entity acting on
behalf of, the taxpayer, or any other corporation or entity owned or
controlled by the taxpayer, directly or indirectly, or which owns or
controls the taxpayer, directly or indirectly.
(e) The changes made to this section by the act adding this
subdivision apply to offers made on or after January 1, 1999.
19706. Any person or any officer or employee of any corporation
who, within the time required by or under the provisions of this
part, willfully fails to file any return or to supply any information
with intent to evade any tax imposed by Part 10 (commencing with
Section 17001) or Part 11 (commencing with Section 23001), or who,
willfully and with like intent, makes, renders, signs, or verifies
any false or fraudulent return or statement or supplies any false or
fraudulent information, is punishable by imprisonment in the county
jail not to exceed one year, or in the state prison, or by fine of
not more than twenty thousand dollars ($20,000), or by both the fine
and imprisonment, at the discretion of the court, together with the
costs of investigation and prosecution.
19707. The place of trial for the offenses enumerated in this
chapter shall be in the county of residence or principal place of
business of the defendant or defendants at the time of commission of
the offense. However, if the defendant or defendants had no residence
or principal place of business in this state at the time of
commission of the offense, the trial shall be held in the County of
Sacramento.
In a criminal case charging a defendant or defendants with
committing an offense enumerated in this chapter, the place of trial
may be as set forth in this section, or as provided for in Section
1462.2 or Chapter 1 (commencing with Section 777) of Title 3 of Part
2 of the Penal Code.
19708. Any person required under this part to collect, account for,
and pay over any tax or amount required to be withheld who willfully
fails to collect or truthfully account for and pay over the tax or
amount shall, in addition to other penalties provided by law, be
guilty of a felony, and, upon conviction thereof, shall be fined not
more than two thousand dollars ($2,000) or imprisoned in the state
prison, or both.
19709. Any person who, with or without intent to evade, fails to
withhold, pursuant to Section 18662 or 18666, or pay over any tax
withheld, is guilty of a misdemeanor, and, upon conviction be fined
an amount not to exceed one thousand dollars ($1,000) or imprisoned
for not more than one year, or both, at the discretion of the court.
19710. If a taxpayer fails to file a return within 60 days after
the Franchise Tax Board issues a notice and demand for the return,
the Franchise Tax Board may petition the court for a writ of mandate
to require the taxpayer to file a return. The judgment shall include
costs in favor of the prevailing party.
19711. Any individual required to supply information to his or her
employer under Section 13040, 13041, or 13042 of the Unemployment
Insurance Code, who willfully supplies false or fraudulent
information, or who willfully fails to supply information thereunder
which would require an increase in the tax to be withheld under
Section 13020 of the Unemployment Insurance Code, shall, in addition
to any other penalty otherwise provided by law, upon conviction
thereof, be fined not more than one thousand dollars ($1,000), or
imprisoned not more than one year, or both.
19712. Any tax preparer, as defined in subdivision (b) of Section
19169, who endorses or otherwise negotiates (directly or through an
agent) any warrant made in respect of the taxes imposed by Part 10
(commencing with Section 17001) or Part 11 (commencing with Section
23001) which is issued to a taxpayer (other than the tax preparer)
shall, in addition to other penalties provided by law, be guilty of a
misdemeanor, and upon conviction thereof, shall be fined not more
than one thousand dollars ($1,000) or imprisoned not more than one
year, or both, together with the costs of prosecution.
This section shall not apply where the tax preparer has advanced
the taxpayer an amount of money equal to or greater than the amount
of the taxpayer's tax refund.
19713. (a) Any person or employer who fails to comply with
subdivision (b) of Section 19009 shall, in addition to any other
penalties provided by law, be guilty of a misdemeanor, and, upon
conviction thereof, shall be fined no more than five thousand dollars
($5,000), or imprisoned not more than one year, or both, together
with the costs of prosecution.
(b) This section shall not apply:
(1) To any person or employer, if that person or employer shows
that there was reasonable doubt as to (A) whether the law required
collection of the tax, or (B) who was required by law to collect the
tax.
(2) To any person or employer, if that person or employer shows
that the failure to comply with the provisions of subdivision (b) of
Section 19009 was due to circumstances beyond his or her control.
(c) For purposes of paragraph (2), a lack of funds existing
immediately after the payment of wages (whether or not created by the
payment of the wages) shall not be considered to be circumstances
beyond the control of a person or employer.
19714. Whenever it appears to the State Board of Equalization or
any court of record of this state that proceedings before it under
this part have been instituted or maintained by the taxpayer
primarily for delay or that the taxpayer's position in the
proceedings is frivolous or groundless, or that the taxpayer
unreasonably failed to pursue available administrative remedies, a
penalty in an amount not in excess of five thousand dollars ($5,000)
shall be imposed. Any penalty so imposed shall be paid upon notice
and demand from the Franchise Tax Board and shall be collected as a
tax.
19715. (a) A civil action in the name of the State of California to
enjoin any person from further engaging in specified conduct may be
commenced at the request of the Franchise Tax Board. Any action under
this section shall be brought in accordance with Section 19707. The
court may exercise its jurisdiction over that action separate and
apart from any other action brought by the State of California
against that person.
(b) In any action under subdivision (a), the court may enjoin the
person from engaging in the specified conduct or in any other
activity subject to penalty under this part, if the court finds both
of the following:
(1) That the person has engaged in any specified conduct.
(2) That injunctive relief is appropriate to prevent recurrence of
that specified conduct.
(c) For purposes of this section, the term "specified conduct"
means any action, or failure to take action, subject to penalty under
Section 19173, 19174, 19177, or 19178.
19717. (a) The prevailing party may be awarded a judgment for
reasonable litigation costs incurred, in the case of any civil
proceeding brought by or against the State of California in a court
of record of this state in connection with the determination,
collection, or refund of any tax, interest, or penalty under this
part.
(b) (1) A judgment for reasonable litigation costs shall not be
awarded under subdivision (a) unless the court determines that the
prevailing party has exhausted all administrative remedies available
to that party under this part, including the filing of an appeal as
provided in Section 19324. Any failure to agree to an extension of
the time for the assessment of any tax shall not be taken into
account for purposes of determining whether the prevailing party
meets the requirements of the preceding sentence.
(2) An award under subdivision (a) shall be made only for
reasonable litigation costs which are allocable to the State of
California and not to any other party to the action or proceeding.
(3) No award for reasonable litigation costs may be made under
subdivision (a) with respect to any portion of the civil proceeding
during which the prevailing party has unreasonably protracted that
proceeding.
(c) For purposes of this section:
(1) "Reasonable litigation costs" includes any of the following:
(A) Reasonable court costs.
(B) Based upon prevailing market rates for the kind or quality of
services furnished, any of the following:
(i) The reasonable expenses of expert witnesses in connection with
the civil proceeding, except that no expert witness shall be
compensated at a rate in excess of the highest rate of compensation
for expert witnesses paid by the State of California.
(ii) The reasonable cost of any study, analysis, engineering
report, test, or project which is found by the court to be necessary
for the preparation of the party's case.
(iii) Reasonable fees paid or incurred for the services of
attorneys in connection with the civil proceeding, except that those
fees shall not be in excess of one hundred twenty-five dollars ($125)
per hour unless the court determines that a special factor, such as
the limited availability of qualified attorneys for the proceeding,
the difficulty of the issues presented in the case, or the local
availability of tax expertise justifies a higher rate. In the case of
each calendar year beginning with calendar year 2001, the Franchise
Tax Board shall recompute the dollar amount referred to in the
preceding sentence. That computation shall be made by increasing the
amount in this clause by an amount equal to the cost-of-living
adjustment determined under subdivision (h) of Section 17041. If any
resulting dollar amount is not a multiple of ten dollars ($10), that
dollar amount shall be rounded to the nearest multiple of ten dollars
($10).
(iv) The court may award reasonable attorney fees under
subdivision (a) in excess of the attorney fees paid or incurred if
the fees are less than the reasonable attorneys' fees because the
attorney is representing the prevailing party for no fee or for a fee
which (taking into account all the facts and circumstances) is no
more than a nominal fee. This clause shall apply only if the award is
paid to the attorney or the attorney's employer.
(2) (A) "Prevailing party" means any party to any proceeding
described in subdivision (a) (other than the State of California or
any creditor of the taxpayer involved) that meets either of the
following criteria:
(i) Has substantially prevailed with respect to the amount in
controversy.
(ii) Has substantially prevailed with respect to the most
significant issue or set of issues presented.
(B) (i) A party shall not be treated as the prevailing party in a
proceeding to which subdivision (a) applies if the State of
California establishes that its position in the proceeding was
substantially justified.
(ii) For purposes of clause (i), the position of the State of
California shall be presumed not to be substantially justified if the
Franchise Tax Board did not follow its applicable published guidance
in the administrative proceeding. This presumption may be rebutted.
(iii) For purposes of clause (ii), the term "applicable published
guidance" means either of the following:
(I) A regulation, legal ruling, notice, information release, or
announcement.
(II) Any chief counsel ruling or determination letter issued to
the taxpayer.
(iv) For purposes of clause (i), in determining whether the
position of the Franchise Tax Board was substantially justified, the
court shall take into account whether the Franchise Tax Board has
lost in any California Court of Appeal in another district on
substantially similar issues, as reflected in a decision certified
for publication.
(C) Any determination under this paragraph as to whether a party
is a prevailing party shall be made by either of the following:
(i) The court.
(ii) An agreement of the parties.
(3) The term "civil proceeding" includes a civil action.
(d) For purposes of this section, in the case of multiple actions
which could have been joined or consolidated, or a case or cases
involving a return or returns of the same taxpayer (including joint
returns of married individuals) which could have been joined in a
single proceeding in the same court, the actions or cases shall be
treated as one civil proceeding regardless of whether the joinder or
consolidation actually occurs, unless the court in which the action
is brought determines, in its discretion, that it would be
inappropriate to treat the actions or cases as joined or consolidated
for purposes of this section.
(e) An order granting or denying an award for reasonable
litigation costs under subdivision (a), in whole or in part, shall be
incorporated as a part of the decision or judgment in the case and
shall be subject to appeal in the same manner as the decision or
judgment.
(f) For purposes of this section, "position of the State of
California" includes either of the following:
(1) The position taken by the State of California in the civil
proceeding.
(2) Any administrative action or inaction by the Franchise Tax
Board (and all subsequent administrative action or inaction) upon
which that proceeding is based.
(g) The amendments made by the act amending this subdivision are
effective for costs incurred and services performed more than 180
days after the effective date of the act amending this subdivision.
19718. Any employer or agent of an employer who provides a wage
statement or similar document to any undocumented worker or former
undocumented worker at that person's request for the purpose of
documenting that person's eligibility for legalization pursuant to
the federal Immigration Reform and Control Act (Public Law 99-603),
shall not be liable for any penalty or criminal or civil violation
under this part relative to the undocumented worker or former
undocumented worker based on any facts disclosed in the wage
statement or similar document so provided.
Nothing in this section shall be construed to limit the liability
under any provision of law of any person who engages in the
procurement or production of false or fraudulent wage statements or
similar documents to any person for purposes of legalization under
the federal Immigration Reform and Control Act.
This section does not apply to penalties assessed or criminal
actions filed prior to May 1, 1987.
This section does not apply where the Employment Development
Department, through independent means, discovers that an employer has
withheld personal income tax and disability insurance contributions
from workers' paychecks and has not remitted those moneys to the
department.
The immunity from liability pursuant to this section shall apply
only to facts disclosed in the wage statement or similar document
provided on or after the effective date of this section and only
until the date of the termination of the legalization provisions for
agricultural and nonagricultural workers of the federal Immigration
Reform and Control Act. However, the immunity from liability pursuant
to this section shall continue until the cause of action is tolled
by the applicable statute of limitations.
19719. (a) Any person who attempts or purports to exercise the
powers, rights, and privileges of a corporation that has been
suspended pursuant to Section 23301 or who transacts or attempts to
transact intrastate business in this state on behalf of a foreign
corporation, the rights and privileges of which have been forfeited
pursuant to the section, is punishable by a fine of not less than two
hundred fifty dollars ($250) and not exceeding one thousand dollars
($1,000), or by imprisonment not exceeding one year, or both fine and
imprisonment.
(b) This section shall not apply to any insurer, or to counsel
retained by an insurer on behalf of the suspended corporation, who
provides a defense for a suspended corporation in a civil action
based upon a claim for personal injury, property damage, or economic
losses against the suspended corporation, and, in conjunction with
this defense, prosecutes subrogation, contribution, or indemnity
rights against persons or entities in the name of the suspended
corporation.
(c) Nothing in this section shall create or limit any obligation
upon an insurer to defend a suspended corporation.
19720. (a) Any person who does any of the following is liable for a
penalty of not more than five thousand dollars ($5,000):
(1) Utters, passes, or negotiates a state-issued income tax refund
warrant generated as a result of the filing of a return knowing that
the recipient is not entitled to the refund.
(2) Procures a state-issued income tax refund, in any form,
generated as a result of the filing of a return knowing that the
recipient is not entitled to the refund.
(3) Aids, abets, advises, encourages, or counsels any individual
to utter, pass, or negotiate a state-issued income tax refund
warrant, or to procure a state-issued income tax refund, in any form,
generated as a result of the filing of a return, knowing that the
recipient is not entitled to a refund.
(b) The fact that an individual's name is endorsed to a
state-issued refund warrant shall be prima facie evidence for all
purposes that the refund warrant was actually signed by him or her.
(c) The penalty shall be recovered in the name of the people in
any court of competent jurisdiction. Counsel for the Franchise Tax
Board may, upon request of the district attorney or other prosecuting
attorney, assist the prosecuting attorney in presenting the law or
facts to recover the penalty at the trial of a criminal proceeding
for violation of this section.
(d) The person is also guilty of a misdemeanor and upon conviction
shall be punishable by a fine not to exceed ten thousand dollars
($10,000) or by imprisonment not to exceed one year, or both, at the
discretion of the court, together with costs of investigation and
prosecution.
(e) Any individual guilty under this part shall be subject to
Section 502.01 of the Penal Code.
19721. (a) Any person who, with intent to defraud, does any of the
following is liable for a penalty of not more than ten thousand
dollars ($10,000):
(1) Willfully utters, passes, or negotiates a state-issued income
tax refund warrant generated as a result of the filing of a return
knowing that the recipient is not entitled to the refund.
(2) Willfully procures a state-issued income tax refund, in any
form, generated as a result of the filing of a return knowing that
the recipient is not entitled to the refund.
(3) Willfully aids, abets, advises, encourages, or counsels any
individual to utter, pass, or negotiate a state-issued income tax
refund warrant, or to procure a state-issued income tax refund, in
any form, generated as a result of the filing of a return, knowing
the recipient is not entitled to the refund.
(b) The person is also punishable by imprisonment in a county jail
not to exceed one year, or in the state prison, or by a fine not to
exceed fifty thousand dollars ($50,000), or by both that fine and
imprisonment, at the discretion of the court, together with the costs
of investigation and prosecution.
(c) The fact that an individual's name is endorsed to a
state-issued refund warrant shall be prima facie evidence for all
purposes that the refund warrant was actually signed by him or her.
(d) The penalty shall be recovered in the name of the people in
any court of competent jurisdiction. Counsel for the Franchise Tax
Board may, upon request of the district attorney or other prosecuting
attorney, assist the prosecuting attorney in presenting the law or
facts to recover the penalty at the trial or a criminal proceeding
for violation of this section.
(e) Any individual guilty under this part shall be subject to
Section 502.01 of the Penal Code.
19722. (a) (1) Restitution orders or any other amounts imposed by a
court of competent jurisdiction for criminal offenses upon a person
or any other entity that are due and payable to the Franchise Tax
Board may be collected by the Franchise Tax Board in any manner
provided by law for collection of a delinquent income tax liability,
including, but not limited to, issuance of an order and levy under
Article 4 (commencing with Section 706.070) of Chapter 5 of Division
2 of Title 9 of Part 2 of the Code of Civil Procedure in the manner
provided for earnings withholding orders for taxes.
(2) Amounts imposed by a court of competent jurisdiction as an
order of restitution for criminal offenses shall be treated as final
and due and payable to the State of California on the date that
amount is established on the records of the Franchise Tax Board.
(b) Part 10 (commencing with Section 17001), this part, Part 10.7
(commencing with Section 21001), and Part 11 (commencing with Section
23001) shall apply to amounts collected under this section in the
same manner and with the same force and effect and to the full extent
as if the language of those laws had been incorporated in full into
this section, except to the extent that any provision is either
inconsistent with this section or is not relevant to this section.
(c) Notwithstanding Chapter 6 (commencing with Section 19301), no
refund or credit may be allowed for any amounts paid or payments
applied under this section.
(d) Amounts authorized to be collected pursuant to this section
shall accrue interest at the greater of the rate applicable to the
amounts being collected or the rate provided under Section 19521 from
and after the date the amounts are established on the records of the
Franchise Tax Board.
(e) Amounts authorized to be collected pursuant to this section
are not subject to Section 19255.
(f) Notwithstanding Section 19204 or Chapter 14 (commencing with
Section 7150) of Division 7 of Title 1 of the Government Code, any
portion of the amounts authorized to be collected under this section
that remain unsatisfied may be collected by the recording of a Notice
of State Tax Lien. The Franchise Tax Board may record or extend a
recorded Notice of State Tax Lien at any time until the amount due,
including any accrued interest, is paid in full.
(g) The Franchise Tax Board may retain those amounts ordered to be
paid by a court of competent jurisdiction by a person or any other
entity for the costs of investigation incurred by the Franchise Tax
Board.
(h) This section shall apply on and after January 1, 2011, to
amounts authorized to be collected pursuant to this section that are
due and payable to the Franchise Tax Board before, on, or after
January 1, 2011.
19701. Any person who does any of the following is liable for a
penalty of not more than five thousand dollars ($5,000):
(a) With or without intent to evade any requirement of Part 10
(commencing with Section 17001), Part 11 (commencing with Section
23001), or this part or any lawful requirement of the Franchise Tax
Board, repeatedly over a period of two years or more, fails to file
any return or to supply any information required, or who, with or
without that intent, makes, renders, signs, or verifies any false or
fraudulent return or statement, or supplies any false or fraudulent
information, resulting in an estimated delinquent tax liability of at
least fifteen thousand dollars ($15,000).
(b) Aids, abets, advises, encourages, or counsels any person to
evade the tax imposed by Part 10 (commencing with Section 17001) or
Part 11 (commencing with Section 23001) by not filing any return or
supplying any information required under Part 10 (commencing with
Section 17001), Part 11 (commencing with Section 23001), or this
part, or, by making, rendering, signing, or verifying any false or
fraudulent return or statement, or by supplying false or fraudulent
information.
(c) Under this part, is required to pay any estimated tax or tax,
who willfully fails to pay that estimated tax or tax, at the time or
times required by law or regulations.
The penalty shall be recovered in the name of the people in any
court of competent jurisdiction. Counsel for the Franchise Tax Board
may, upon request of the district attorney or other prosecuting
attorney, assist the prosecuting attorney in presenting the law or
facts to recover the penalty at the trial of a criminal proceeding
for violation of this section.
That person is also guilty of a misdemeanor and shall upon
conviction be fined not to exceed five thousand dollars ($5,000) or
be imprisoned not to exceed one year, or both, at the discretion of
the court, together with costs of investigation and prosecution. The
preceding sentence shall not apply to any person who is mentally
incompetent, or suffers from dementia, Alzheimer's disease, or
similar condition.
(d) For purposes of subdivision (a), the president of a
corporation, or the chief operating officer, is the person presumed
to be responsible for filing any return or supplying information
required from that corporation.
19701.5. (a) Any person who signs his or her spouse's name on any
income tax return, or any schedules or attachments thereto, or who
files electronically pursuant to Section 18621.5, without the consent
of the spouse as provided in subdivision (b), is guilty of a
misdemeanor and shall upon conviction be fined an amount not to
exceed five thousand dollars ($5,000) or be imprisoned for a term not
to exceed one year, or both, at the discretion of the court,
together with costs of investigation and prosecution.
(b) Notwithstanding subdivision (a), any person who signs his or
her spouse's name shall not be guilty of a misdemeanor when one
spouse is physically unable by reason of disease or injury to sign a
joint return, and the other spouse, with the oral consent of the one
who is incapacitated, signs the incapacitated spouse's name in the
proper place on the return followed by the words "By ____, Husband
(or Wife)," and by the signature of the signing spouse in his or her
own right, provided that a dated statement signed by the spouse who
is signing the return is attached to and made a part of the return
stating each of the following:
(1) The name of the return being filed.
(2) The taxable year.
(3) The reason for the inability of the spouse who is
incapacitated to sign the return.
(4) That the spouse who is incapacitated consented to the signing
of the return and that the taxpayer and his or her agent, if any, are
responsible for the return as made and incur liability for the
penalties provided for erroneous, false, or fraudulent returns.
(c) The penalties provided by this section are cumulative and
shall not be construed as restricting any other penalty provided by
law based upon the same facts, including any penalty under Section
470 of the Penal Code. However, an act or omission which is made
punishable in different ways by this section and different provisions
of the Penal Code shall not be punished under more than one
provision.
19702. The prosecutor may, with the consent of the Franchise Tax
Board, compromise any penalty for which he or she may bring action
under this chapter. The penalties provided by this chapter are
additional to all other penalties provided in Part 10 (commencing
with Section 17001), Part 11 (commencing with Section 23001), or this
part.
19703. The certificate of the Franchise Tax Board to the effect
that a return has not been filed or that information has not been
supplied as required by this part is prima facie evidence that the
return has not been filed or that the information has not been
supplied.
19704. Any action or prosecution under this chapter shall be
instituted within six years after commission of the offense.
19705. (a) Any person who does any of the following shall be guilty
of a felony and, upon conviction, shall be fined not more than fifty
thousand dollars ($50,000) or imprisoned in the state prison, or
both, together with the costs of investigation and prosecution:
(1) Willfully makes and subscribes any return, statement, or other
document, that contains or is verified by a written declaration that
it is made under penalty of perjury, and he or she does not believe
to be true and correct as to every material matter.
(2) Willfully aids or assists in, or procures, counsels, or
advises the preparation or presentation under, or in connection with
any matter arising under, the Personal Income Tax Law or the
Corporation Tax Law, of a return, affidavit, claim, or other
document, that is fraudulent or is false as to any material matter,
whether or not that falsity or fraud is with the knowledge or consent
of the person authorized or required to present that return,
affidavit, claim, or document.
(3) Simulates or falsely or fraudulently executes or signs any
bond, permit, entry, or other document required by the provisions of
the Personal Income Tax Law or the Corporation Tax Law, or by any
regulation pursuant to that law, or procures the same to be falsely
or fraudulently executed or advises, aids in, or connives at that
execution.
(4) Removes, deposits, or conceals, or is concerned in removing,
depositing, or concealing, any goods or commodities for or in respect
whereof any tax is or shall be imposed, or any property upon which
levy is authorized by Chapter 5 (commencing with Section 19201); or
Chapter 8 (commencing with Section 688.010) of Division 1 of, and
Chapter 5 (commencing with Section 706.010) of Division 2 of, Title 9
of the Code of Civil Procedure, with intent to evade or defeat the
assessment or collection of any tax, additions to tax, penalty, or
interest imposed by Part 10 (commencing with Section 17001), Part 11
(commencing with Section 23001), or this part.
(5) In connection with any settlement under Section 19442, or
offer of that settlement, or in connection with any closing agreement
under Section 19441 or offer to enter into that agreement, or
compromise under Section 19443, or offer of that compromise,
willfully does any of the following:
(A) Conceals from any officer or employee of this state any
property belonging to the estate of a taxpayer or other person liable
in respect of the tax.
(B) Receives, withholds, destroys, mutilates, or falsifies any
book, document, or record, or makes any false statement, relating to
the estate or financial condition of the taxpayer or other person
liable in respect of the tax.
(b) In the case of a corporation, the fifty thousand dollars
($50,000) limitation specified in subdivision (a) shall be increased
to two hundred thousand dollars ($200,000).
(c) The fact that an individual's name is signed to a return,
statement, or other document filed, including a return, statement, or
other document filed using electronic technology pursuant to Section
18621.5, shall be prima facie evidence for all purposes that the
return, statement, or other document was actually signed by him or
her.
(d) For purposes of this section, "person" means the taxpayer, any
member of the taxpayer's family, any corporation, agent, fiduciary,
or representative of, or any other individual or entity acting on
behalf of, the taxpayer, or any other corporation or entity owned or
controlled by the taxpayer, directly or indirectly, or which owns or
controls the taxpayer, directly or indirectly.
(e) The changes made to this section by the act adding this
subdivision apply to offers made on or after January 1, 1999.
19706. Any person or any officer or employee of any corporation
who, within the time required by or under the provisions of this
part, willfully fails to file any return or to supply any information
with intent to evade any tax imposed by Part 10 (commencing with
Section 17001) or Part 11 (commencing with Section 23001), or who,
willfully and with like intent, makes, renders, signs, or verifies
any false or fraudulent return or statement or supplies any false or
fraudulent information, is punishable by imprisonment in the county
jail not to exceed one year, or in the state prison, or by fine of
not more than twenty thousand dollars ($20,000), or by both the fine
and imprisonment, at the discretion of the court, together with the
costs of investigation and prosecution.
19707. The place of trial for the offenses enumerated in this
chapter shall be in the county of residence or principal place of
business of the defendant or defendants at the time of commission of
the offense. However, if the defendant or defendants had no residence
or principal place of business in this state at the time of
commission of the offense, the trial shall be held in the County of
Sacramento.
In a criminal case charging a defendant or defendants with
committing an offense enumerated in this chapter, the place of trial
may be as set forth in this section, or as provided for in Section
1462.2 or Chapter 1 (commencing with Section 777) of Title 3 of Part
2 of the Penal Code.
19708. Any person required under this part to collect, account for,
and pay over any tax or amount required to be withheld who willfully
fails to collect or truthfully account for and pay over the tax or
amount shall, in addition to other penalties provided by law, be
guilty of a felony, and, upon conviction thereof, shall be fined not
more than two thousand dollars ($2,000) or imprisoned in the state
prison, or both.
19709. Any person who, with or without intent to evade, fails to
withhold, pursuant to Section 18662 or 18666, or pay over any tax
withheld, is guilty of a misdemeanor, and, upon conviction be fined
an amount not to exceed one thousand dollars ($1,000) or imprisoned
for not more than one year, or both, at the discretion of the court.
19710. If a taxpayer fails to file a return within 60 days after
the Franchise Tax Board issues a notice and demand for the return,
the Franchise Tax Board may petition the court for a writ of mandate
to require the taxpayer to file a return. The judgment shall include
costs in favor of the prevailing party.
19711. Any individual required to supply information to his or her
employer under Section 13040, 13041, or 13042 of the Unemployment
Insurance Code, who willfully supplies false or fraudulent
information, or who willfully fails to supply information thereunder
which would require an increase in the tax to be withheld under
Section 13020 of the Unemployment Insurance Code, shall, in addition
to any other penalty otherwise provided by law, upon conviction
thereof, be fined not more than one thousand dollars ($1,000), or
imprisoned not more than one year, or both.
19712. Any tax preparer, as defined in subdivision (b) of Section
19169, who endorses or otherwise negotiates (directly or through an
agent) any warrant made in respect of the taxes imposed by Part 10
(commencing with Section 17001) or Part 11 (commencing with Section
23001) which is issued to a taxpayer (other than the tax preparer)
shall, in addition to other penalties provided by law, be guilty of a
misdemeanor, and upon conviction thereof, shall be fined not more
than one thousand dollars ($1,000) or imprisoned not more than one
year, or both, together with the costs of prosecution.
This section shall not apply where the tax preparer has advanced
the taxpayer an amount of money equal to or greater than the amount
of the taxpayer's tax refund.
19713. (a) Any person or employer who fails to comply with
subdivision (b) of Section 19009 shall, in addition to any other
penalties provided by law, be guilty of a misdemeanor, and, upon
conviction thereof, shall be fined no more than five thousand dollars
($5,000), or imprisoned not more than one year, or both, together
with the costs of prosecution.
(b) This section shall not apply:
(1) To any person or employer, if that person or employer shows
that there was reasonable doubt as to (A) whether the law required
collection of the tax, or (B) who was required by law to collect the
tax.
(2) To any person or employer, if that person or employer shows
that the failure to comply with the provisions of subdivision (b) of
Section 19009 was due to circumstances beyond his or her control.
(c) For purposes of paragraph (2), a lack of funds existing
immediately after the payment of wages (whether or not created by the
payment of the wages) shall not be considered to be circumstances
beyond the control of a person or employer.
19714. Whenever it appears to the State Board of Equalization or
any court of record of this state that proceedings before it under
this part have been instituted or maintained by the taxpayer
primarily for delay or that the taxpayer's position in the
proceedings is frivolous or groundless, or that the taxpayer
unreasonably failed to pursue available administrative remedies, a
penalty in an amount not in excess of five thousand dollars ($5,000)
shall be imposed. Any penalty so imposed shall be paid upon notice
and demand from the Franchise Tax Board and shall be collected as a
tax.
19715. (a) A civil action in the name of the State of California to
enjoin any person from further engaging in specified conduct may be
commenced at the request of the Franchise Tax Board. Any action under
this section shall be brought in accordance with Section 19707. The
court may exercise its jurisdiction over that action separate and
apart from any other action brought by the State of California
against that person.
(b) In any action under subdivision (a), the court may enjoin the
person from engaging in the specified conduct or in any other
activity subject to penalty under this part, if the court finds both
of the following:
(1) That the person has engaged in any specified conduct.
(2) That injunctive relief is appropriate to prevent recurrence of
that specified conduct.
(c) For purposes of this section, the term "specified conduct"
means any action, or failure to take action, subject to penalty under
Section 19173, 19174, 19177, or 19178.
19717. (a) The prevailing party may be awarded a judgment for
reasonable litigation costs incurred, in the case of any civil
proceeding brought by or against the State of California in a court
of record of this state in connection with the determination,
collection, or refund of any tax, interest, or penalty under this
part.
(b) (1) A judgment for reasonable litigation costs shall not be
awarded under subdivision (a) unless the court determines that the
prevailing party has exhausted all administrative remedies available
to that party under this part, including the filing of an appeal as
provided in Section 19324. Any failure to agree to an extension of
the time for the assessment of any tax shall not be taken into
account for purposes of determining whether the prevailing party
meets the requirements of the preceding sentence.
(2) An award under subdivision (a) shall be made only for
reasonable litigation costs which are allocable to the State of
California and not to any other party to the action or proceeding.
(3) No award for reasonable litigation costs may be made under
subdivision (a) with respect to any portion of the civil proceeding
during which the prevailing party has unreasonably protracted that
proceeding.
(c) For purposes of this section:
(1) "Reasonable litigation costs" includes any of the following:
(A) Reasonable court costs.
(B) Based upon prevailing market rates for the kind or quality of
services furnished, any of the following:
(i) The reasonable expenses of expert witnesses in connection with
the civil proceeding, except that no expert witness shall be
compensated at a rate in excess of the highest rate of compensation
for expert witnesses paid by the State of California.
(ii) The reasonable cost of any study, analysis, engineering
report, test, or project which is found by the court to be necessary
for the preparation of the party's case.
(iii) Reasonable fees paid or incurred for the services of
attorneys in connection with the civil proceeding, except that those
fees shall not be in excess of one hundred twenty-five dollars ($125)
per hour unless the court determines that a special factor, such as
the limited availability of qualified attorneys for the proceeding,
the difficulty of the issues presented in the case, or the local
availability of tax expertise justifies a higher rate. In the case of
each calendar year beginning with calendar year 2001, the Franchise
Tax Board shall recompute the dollar amount referred to in the
preceding sentence. That computation shall be made by increasing the
amount in this clause by an amount equal to the cost-of-living
adjustment determined under subdivision (h) of Section 17041. If any
resulting dollar amount is not a multiple of ten dollars ($10), that
dollar amount shall be rounded to the nearest multiple of ten dollars
($10).
(iv) The court may award reasonable attorney fees under
subdivision (a) in excess of the attorney fees paid or incurred if
the fees are less than the reasonable attorneys' fees because the
attorney is representing the prevailing party for no fee or for a fee
which (taking into account all the facts and circumstances) is no
more than a nominal fee. This clause shall apply only if the award is
paid to the attorney or the attorney's employer.
(2) (A) "Prevailing party" means any party to any proceeding
described in subdivision (a) (other than the State of California or
any creditor of the taxpayer involved) that meets either of the
following criteria:
(i) Has substantially prevailed with respect to the amount in
controversy.
(ii) Has substantially prevailed with respect to the most
significant issue or set of issues presented.
(B) (i) A party shall not be treated as the prevailing party in a
proceeding to which subdivision (a) applies if the State of
California establishes that its position in the proceeding was
substantially justified.
(ii) For purposes of clause (i), the position of the State of
California shall be presumed not to be substantially justified if the
Franchise Tax Board did not follow its applicable published guidance
in the administrative proceeding. This presumption may be rebutted.
(iii) For purposes of clause (ii), the term "applicable published
guidance" means either of the following:
(I) A regulation, legal ruling, notice, information release, or
announcement.
(II) Any chief counsel ruling or determination letter issued to
the taxpayer.
(iv) For purposes of clause (i), in determining whether the
position of the Franchise Tax Board was substantially justified, the
court shall take into account whether the Franchise Tax Board has
lost in any California Court of Appeal in another district on
substantially similar issues, as reflected in a decision certified
for publication.
(C) Any determination under this paragraph as to whether a party
is a prevailing party shall be made by either of the following:
(i) The court.
(ii) An agreement of the parties.
(3) The term "civil proceeding" includes a civil action.
(d) For purposes of this section, in the case of multiple actions
which could have been joined or consolidated, or a case or cases
involving a return or returns of the same taxpayer (including joint
returns of married individuals) which could have been joined in a
single proceeding in the same court, the actions or cases shall be
treated as one civil proceeding regardless of whether the joinder or
consolidation actually occurs, unless the court in which the action
is brought determines, in its discretion, that it would be
inappropriate to treat the actions or cases as joined or consolidated
for purposes of this section.
(e) An order granting or denying an award for reasonable
litigation costs under subdivision (a), in whole or in part, shall be
incorporated as a part of the decision or judgment in the case and
shall be subject to appeal in the same manner as the decision or
judgment.
(f) For purposes of this section, "position of the State of
California" includes either of the following:
(1) The position taken by the State of California in the civil
proceeding.
(2) Any administrative action or inaction by the Franchise Tax
Board (and all subsequent administrative action or inaction) upon
which that proceeding is based.
(g) The amendments made by the act amending this subdivision are
effective for costs incurred and services performed more than 180
days after the effective date of the act amending this subdivision.
19718. Any employer or agent of an employer who provides a wage
statement or similar document to any undocumented worker or former
undocumented worker at that person's request for the purpose of
documenting that person's eligibility for legalization pursuant to
the federal Immigration Reform and Control Act (Public Law 99-603),
shall not be liable for any penalty or criminal or civil violation
under this part relative to the undocumented worker or former
undocumented worker based on any facts disclosed in the wage
statement or similar document so provided.
Nothing in this section shall be construed to limit the liability
under any provision of law of any person who engages in the
procurement or production of false or fraudulent wage statements or
similar documents to any person for purposes of legalization under
the federal Immigration Reform and Control Act.
This section does not apply to penalties assessed or criminal
actions filed prior to May 1, 1987.
This section does not apply where the Employment Development
Department, through independent means, discovers that an employer has
withheld personal income tax and disability insurance contributions
from workers' paychecks and has not remitted those moneys to the
department.
The immunity from liability pursuant to this section shall apply
only to facts disclosed in the wage statement or similar document
provided on or after the effective date of this section and only
until the date of the termination of the legalization provisions for
agricultural and nonagricultural workers of the federal Immigration
Reform and Control Act. However, the immunity from liability pursuant
to this section shall continue until the cause of action is tolled
by the applicable statute of limitations.
19719. (a) Any person who attempts or purports to exercise the
powers, rights, and privileges of a corporation that has been
suspended pursuant to Section 23301 or who transacts or attempts to
transact intrastate business in this state on behalf of a foreign
corporation, the rights and privileges of which have been forfeited
pursuant to the section, is punishable by a fine of not less than two
hundred fifty dollars ($250) and not exceeding one thousand dollars
($1,000), or by imprisonment not exceeding one year, or both fine and
imprisonment.
(b) This section shall not apply to any insurer, or to counsel
retained by an insurer on behalf of the suspended corporation, who
provides a defense for a suspended corporation in a civil action
based upon a claim for personal injury, property damage, or economic
losses against the suspended corporation, and, in conjunction with
this defense, prosecutes subrogation, contribution, or indemnity
rights against persons or entities in the name of the suspended
corporation.
(c) Nothing in this section shall create or limit any obligation
upon an insurer to defend a suspended corporation.
19720. (a) Any person who does any of the following is liable for a
penalty of not more than five thousand dollars ($5,000):
(1) Utters, passes, or negotiates a state-issued income tax refund
warrant generated as a result of the filing of a return knowing that
the recipient is not entitled to the refund.
(2) Procures a state-issued income tax refund, in any form,
generated as a result of the filing of a return knowing that the
recipient is not entitled to the refund.
(3) Aids, abets, advises, encourages, or counsels any individual
to utter, pass, or negotiate a state-issued income tax refund
warrant, or to procure a state-issued income tax refund, in any form,
generated as a result of the filing of a return, knowing that the
recipient is not entitled to a refund.
(b) The fact that an individual's name is endorsed to a
state-issued refund warrant shall be prima facie evidence for all
purposes that the refund warrant was actually signed by him or her.
(c) The penalty shall be recovered in the name of the people in
any court of competent jurisdiction. Counsel for the Franchise Tax
Board may, upon request of the district attorney or other prosecuting
attorney, assist the prosecuting attorney in presenting the law or
facts to recover the penalty at the trial of a criminal proceeding
for violation of this section.
(d) The person is also guilty of a misdemeanor and upon conviction
shall be punishable by a fine not to exceed ten thousand dollars
($10,000) or by imprisonment not to exceed one year, or both, at the
discretion of the court, together with costs of investigation and
prosecution.
(e) Any individual guilty under this part shall be subject to
Section 502.01 of the Penal Code.
19721. (a) Any person who, with intent to defraud, does any of the
following is liable for a penalty of not more than ten thousand
dollars ($10,000):
(1) Willfully utters, passes, or negotiates a state-issued income
tax refund warrant generated as a result of the filing of a return
knowing that the recipient is not entitled to the refund.
(2) Willfully procures a state-issued income tax refund, in any
form, generated as a result of the filing of a return knowing that
the recipient is not entitled to the refund.
(3) Willfully aids, abets, advises, encourages, or counsels any
individual to utter, pass, or negotiate a state-issued income tax
refund warrant, or to procure a state-issued income tax refund, in
any form, generated as a result of the filing of a return, knowing
the recipient is not entitled to the refund.
(b) The person is also punishable by imprisonment in a county jail
not to exceed one year, or in the state prison, or by a fine not to
exceed fifty thousand dollars ($50,000), or by both that fine and
imprisonment, at the discretion of the court, together with the costs
of investigation and prosecution.
(c) The fact that an individual's name is endorsed to a
state-issued refund warrant shall be prima facie evidence for all
purposes that the refund warrant was actually signed by him or her.
(d) The penalty shall be recovered in the name of the people in
any court of competent jurisdiction. Counsel for the Franchise Tax
Board may, upon request of the district attorney or other prosecuting
attorney, assist the prosecuting attorney in presenting the law or
facts to recover the penalty at the trial or a criminal proceeding
for violation of this section.
(e) Any individual guilty under this part shall be subject to
Section 502.01 of the Penal Code.
19722. (a) (1) Restitution orders or any other amounts imposed by a
court of competent jurisdiction for criminal offenses upon a person
or any other entity that are due and payable to the Franchise Tax
Board may be collected by the Franchise Tax Board in any manner
provided by law for collection of a delinquent income tax liability,
including, but not limited to, issuance of an order and levy under
Article 4 (commencing with Section 706.070) of Chapter 5 of Division
2 of Title 9 of Part 2 of the Code of Civil Procedure in the manner
provided for earnings withholding orders for taxes.
(2) Amounts imposed by a court of competent jurisdiction as an
order of restitution for criminal offenses shall be treated as final
and due and payable to the State of California on the date that
amount is established on the records of the Franchise Tax Board.
(b) Part 10 (commencing with Section 17001), this part, Part 10.7
(commencing with Section 21001), and Part 11 (commencing with Section
23001) shall apply to amounts collected under this section in the
same manner and with the same force and effect and to the full extent
as if the language of those laws had been incorporated in full into
this section, except to the extent that any provision is either
inconsistent with this section or is not relevant to this section.
(c) Notwithstanding Chapter 6 (commencing with Section 19301), no
refund or credit may be allowed for any amounts paid or payments
applied under this section.
(d) Amounts authorized to be collected pursuant to this section
shall accrue interest at the greater of the rate applicable to the
amounts being collected or the rate provided under Section 19521 from
and after the date the amounts are established on the records of the
Franchise Tax Board.
(e) Amounts authorized to be collected pursuant to this section
are not subject to Section 19255.
(f) Notwithstanding Section 19204 or Chapter 14 (commencing with
Section 7150) of Division 7 of Title 1 of the Government Code, any
portion of the amounts authorized to be collected under this section
that remain unsatisfied may be collected by the recording of a Notice
of State Tax Lien. The Franchise Tax Board may record or extend a
recorded Notice of State Tax Lien at any time until the amount due,
including any accrued interest, is paid in full.
(g) The Franchise Tax Board may retain those amounts ordered to be
paid by a court of competent jurisdiction by a person or any other
entity for the costs of investigation incurred by the Franchise Tax
Board.
(h) This section shall apply on and after January 1, 2011, to
amounts authorized to be collected pursuant to this section that are
due and payable to the Franchise Tax Board before, on, or after
January 1, 2011.
