19101. (a) If any amount of tax imposed by Part 10 (commencing with
Section 17001) or Part 11 (commencing with Section 23001), is not
paid on or before the last date prescribed for payment, interest on
that amount at the adjusted annual rate established under Section
19521 shall be paid for the period from that last date to the date
paid.
(b) For purposes of this article, the last date prescribed for
payment of the tax shall be determined under Chapter 4 (commencing
with Section 19001), with the application of the following rules:
(1) The last date prescribed for payment shall be determined
without regard to any extension of time for payment or any
installment agreement entered into under Section 19008.
(2) The last date prescribed for payment shall be determined
without regard to any notice and demand for payment issued, by reason
of jeopardy as provided in Article 5 (commencing with Section
19081), prior to the last date otherwise prescribed for that payment.
(3) In all other cases in which the last date for payment is not
otherwise prescribed, the last date for payment shall be deemed to be
the date the liability for tax arises (and in no event shall be
later than the date notice and demand for the tax is made by the
Franchise Tax Board).
(c) Except as provided in this article:
(1) Interest prescribed under this article on any tax shall be
paid upon notice and demand, and shall be assessed, collected, and
paid in the same manner as taxes. Any reference in Part 10
(commencing with Section 17001), Part 11 (commencing with Section
23001), or this part (except Article 3 (commencing with Section
19031), relating to deficiency assessments) to any tax imposed by
Part 10 (commencing with Section 17001) or Part 11 (commencing with
Section 23001) shall be deemed also to refer to interest imposed by
this article on that tax.
(2) (A) Interest shall be imposed under subdivision (a) in respect
to any assessable penalty, additional amount, or addition to the tax
(other than an addition to tax imposed under Section 19131, 19132,
or 19164) only if that assessable penalty, additional amount, or
addition to the tax is not paid within 15 calendar days from the date
of notice and demand therefor, and in that case interest shall be
imposed only for the period from the date of the notice and demand to
the date of payment.
(B) Interest shall be imposed under this article with respect to
any addition to tax imposed by Section 19131 (relating to failure to
file a return on or before the due date), Section 19132 (relating to
underpayment of tax), or Section 19164 (relating to imposition of the
accuracy-related penalty), for the period that:
(i) Begins on the date on which the return of the tax with respect
to which that addition to tax is imposed is required to be filed
(including any extensions), and
(ii) Ends on the date of payment of that addition to tax.
(3) If notice and demand is made for payment of any amount and if
that amount is paid within 15 calendar days after the date of the
notice and demand, interest under this article on the amount so paid
shall not be imposed for the period after the date of the notice and
demand.
(d) This article shall not apply to any failure to pay estimated
tax required by Section 19025 or 19136.
19104. (a) The Franchise Tax Board may abate all or any part of any
of the following:
(1) Any interest on a deficiency or related to a proposed
deficiency to the extent that interest is attributable in whole or in
part to any unreasonable error or delay by an officer or employee of
the Franchise Tax Board (acting in his or her official capacity) in
performing a ministerial or managerial act.
(2) Any interest on a payment of any tax described in Section
19033 to the extent that any delay in that payment is attributable to
an officer or employee of the Franchise Tax Board (acting in his or
her official capacity) being dilatory in performing a ministerial or
managerial act.
(3) Any interest accruing from a deficiency based on a final
federal determination of tax, for the same period that interest was
abated on the related federal deficiency amount under Section 6404(e)
of the Internal Revenue Code, and the error or delay occurred on or
before the issuance of the final federal determination. This
subparagraph shall apply to any ministerial act for which the
interest accrued after September 25, 1987, or for any managerial act
applicable to a taxable year beginning on or after January 1, 1998,
for which the Franchise Tax Board may propose an assessment or allow
a claim for refund.
(b) For purposes of subdivision (a):
(1) Except as provided in paragraph (3), an error or delay shall
be taken into account only if no significant aspect of that error or
delay can be attributed to the taxpayer involved and after the
Franchise Tax Board has contacted the taxpayer in writing with
respect to that deficiency or payment.
(2) (A) Except as provided in paragraph (4), after the Franchise
Tax Board mails its notice of determination not to abate interest, a
taxpayer may appeal the Franchise Tax Board's determination to the
State Board of Equalization within the following periods:
(i) Thirty days in the case of any unpaid interest described under
subdivision (a).
(ii) Ninety days in the case of any paid interest described under
subdivision (a).
(B) The State Board of Equalization shall have jurisdiction over
the appeal to determine whether the Franchise Tax Board's failure to
abate interest under this section was an abuse of discretion, and may
order an abatement.
(C) Except for clauses (i) and (ii) of subparagraph (A), the
provisions of this paragraph are operative for requests for abatement
of interest made on or after January 1, 1998. The provisions of
clauses (i) and (ii) of subparagraph (A) shall apply to requests for
abatement of interest made on or after January 1, 2001, in accordance
with subdivision (d).
(3) If the Franchise Tax Board fails to mail its notice of
determination on a request to abate interest within six months after
the request is filed, the taxpayer may consider that the Franchise
Tax Board has determined not to abate interest and appeal that
determination to the board. This paragraph shall not apply to
requests for abatement of interest made pursuant to paragraph (4).
(4) A request for abatement of interest related to a proposed
deficiency may be made with the written protest of the underlying
proposed deficiency filed pursuant to Section 19041 or with an appeal
to the board under Section 19045 in the form and manner required by
the Franchise Tax Board. The action of the Franchise Tax Board
denying any portion of the request for abatement of interest relating
to the proposed deficiency shall be considered as part of the appeal
of the action of the Franchise Tax Board on the protest of the
proposed deficiency. If the taxpayer filed an appeal from the
Franchise Tax Board's action on the protest of a proposed deficiency
and the deficiency is final pursuant to Section 19048, the taxpayer
may not thereafter request an abatement of interest accruing prior to
the time the deficiency is final. However, the taxpayer may
thereafter request an abatement pursuant to this section limited to
interest accruing after the deficiency is final.
(c) The Franchise Tax Board shall abate the assessment of all
interest on any erroneous refund for which an action for recovery is
provided under Section 19411 until 30 days after the date demand for
repayment is made, unless the taxpayer (or a related party) has in
any way caused that erroneous refund.
(d) The amendments made to this section by Chapter 863 of the
Statutes of 2000 shall apply to requests for abatement of interest
and appeals made on or after January 1, 2001.
(e) Except as provided in subparagraph (C) of paragraph (2) of
subdivision (b), the amendments made by Chapter 600 of the Statutes
of 1997 are operative with respect to taxable years beginning on or
after January 1, 1998.
19105. In the case of an individual or fiduciary, the Franchise Tax
Board shall not assess interest charges pursuant to Section 19101
for the period between 45 days after the date of final review of an
audit determining an additional amount is owed and the date a notice
of proposed deficiency assessment is sent to the taxpayer.
19107. Where an overpayment is made by any individual for any year,
and a deficiency is owing from the husband or wife of the taxpayer
for the same year, and both husband and wife notify the Franchise Tax
Board in writing prior to the expiration of the time within which
credit for the overpayment may be allowed that the overpayment may be
credited against the deficiency, no interest shall be assessed on
that portion of the deficiency as is extinguished by the credit for
the period of time subsequent to the date the overpayment was made.
19108. (a) Where an overpayment is made by any taxpayer for any
year, and a deficiency is owing from the same taxpayer for any other
year, the overpayment, if the period within which credit for the
overpayment may be allowed has not expired, shall be credited on the
deficiency, if the period within which assessment of the deficiency
may be proposed has not expired, and the balance, if any, shall be
credited or refunded to the taxpayer. No interest shall be assessed
on the portion of the deficiency as is extinguished by the credit for
the period of time subsequent to the date the overpayment was made.
(b) For the purposes of this section the returns of a decedent and
his or her estate shall be considered returns of the same taxpayer
and the returns for the decedent and his or her estate filed for the
year of death shall be considered returns for different taxable
years.
(c) This section is not intended, nor shall it be construed, as a
limitation on the Franchise Tax Board's right to offset or recoup
barred assessments against overpayments.
19109. (a) If the Franchise Tax Board extends for any period the
time for filing a return under Section 18572 or subdivision (a) of
Section 18567 and the time for paying the tax under Section 18572 or
subdivision (c) of Section 18567 (and waives any penalties relating
to the failure to so file or so pay) for any taxpayer located in a
presidentially declared disaster area or any county or city in this
state which is proclaimed by the Governor to be in a state of
disaster that incurred a loss, the Franchise Tax Board shall,
notwithstanding subdivision (b) of Section 18572, abate for that
period the assessment of any interest prescribed under this article
on that tax.
(b) For purposes of subdivision (a), the term "presidentially
declared disaster area" means, with respect to any taxpayer, any area
which the President has determined warrants assistance by the
federal government under the Disaster Relief and Emergency Assistance
Act.
19110. (a) When the correction of an erroneous inclusion or
deduction of an item or items in the computation of income of a
trust, estate, parent, husband, or wife for any year results in an
overpayment for that year by the trust, estate, parent, husband, or
wife, and also results in a deficiency for the same year for a
grantor of the trust or beneficiary of the estate or trust, or child
of the parent, or spouse of the child, or the spouse of the husband
or wife, the overpayment, if the period within which credit for the
overpayment may be allowed has not expired, shall be credited on the
deficiency, if the period within which the deficiency may be proposed
has not expired, and the balance, if any, shall be credited or
refunded. No interest shall be assessed on the portion of the
deficiency as is extinguished by the credit for the period of time
subsequent to the date the overpayment was made.
(b) When the correction of an erroneous inclusion or deduction of
an item or items in the computation of income of a grantor of a
trust, beneficiary of an estate or trust, a child, or spouse of the
child, or a husband or wife for any year results in an overpayment
for that year by the grantor, beneficiary, child or husband or wife,
and also results in a deficiency for the same year for the grantor's
or beneficiary's trust, the beneficiary's estate, the child's parent,
or spouse of the child, or the beneficiary's spouse, the
overpayment, if the period within which credit for the overpayment
may be allowed has not expired, shall be credited on the deficiency,
if the period within which the deficiency may be proposed has not
expired, and the balance, if any, shall be credited or refunded. No
interest shall be assessed on the portion of the deficiency as is
extinguished by the credit for the period of time subsequent to the
date the overpayment was made.
(c) Subdivisions (a) and (b) are not intended, nor shall they be
construed as a limitation on the Franchise Tax Board's right to
offset or recoup barred assessments against overpayments.
19112. Interest may be waived for any period for which the
Franchise Tax Board determines that an individual or fiduciary
demonstrates inability to pay that interest solely because of extreme
financial hardship caused by significant disability or other
catastrophic circumstance. Any waiver under this section shall be
withdrawn retroactively if made because of fraud, malfeasance,
misrepresentation, or omission of any material fact.
19113. If any portion of a tax is satisfied by credit of an
overpayment, then no interest shall be imposed under this article on
the portion of the tax so satisfied for any period during which, if
the credit had not been made, interest would have been allowable with
respect to the overpayment.
19114. Interest prescribed under this article on any tax may be
assessed and collected at any time during the period within which the
tax to which the interest relates may be collected.
19116. (a) In the case of an individual who files a return of tax
imposed under Part 10 (commencing with Section 17001) for a taxable
year on or before the due date for the return, including extensions,
if the Franchise Tax Board does not provide a notice to the taxpayer
specifically stating the taxpayer's liability and the basis of the
liability before the close of the notification period, the Franchise
Tax Board shall suspend the imposition of any interest, penalty,
addition to tax, or additional amount with respect to any failure
relating to the return which is computed by reference to the period
of time the failure continues to exist and which is properly
allocable to the suspension period.
(b) For purposes of this section:
(1) Except as provided in subdivision (e), "notification period"
means the 36-month period beginning on the later of either of the
following:
(A) The date on which the return is filed.
(B) The due date of the return without regard to extensions.
(2) "Suspension period" means the period beginning on the day
after the close of the notification period and ending on the date
which is 15 days after the date on which notice described in
subdivision (a) is provided by the Franchise Tax Board.
(3) If, after the return for a taxable year is filed, the taxpayer
provides to the Franchise Tax Board one or more signed written
documents showing that the taxpayer owes an additional amount of tax
for the taxable year, paragraph (1) shall be applied by substituting
the date the last of the documents was provided for the date on which
the return was filed.
(c) This section shall be applied separately with respect to each
item or adjustment.
(d) This section shall not apply to any of the following:
(1) Any penalty imposed by Section 19131.
(2) Any penalty imposed by Section 19132.
(3) Any interest, penalty, addition to tax, or additional amount
involving fraud.
(4) Any interest, penalty, addition to tax, or additional amount
with respect to any tax liability shown on the return.
(5) Any criminal penalty.
(6) Any interest, penalty, addition to tax, or additional amount
with respect to any gross misstatement.
(7) Any interest, penalty, addition to tax, or additional amount
relating to any reportable transaction with respect to which the
requirements of Section 6664(d)(2)(A) of the Internal Revenue Code
are not met, and any listed transaction, as defined in Section 6707A
(c) of the Internal Revenue Code.
(e) For taxpayers required by subdivision (a) of Section 18622 to
report a change or correction by the Commissioner of Internal Revenue
or other officer of the United States or other competent authority
the following rules shall apply:
(1) The notification period under subdivision (a) shall be either
of the following:
(A) One year from the date the notice required by Section 18622 is
filed with the Franchise Tax Board by the taxpayer or the Internal
Revenue Service, if the taxpayer or the Internal Revenue Service
reports that change or correction within six months after the final
federal determination.
(B) Two years from the date when the notice required by Section
18622 is filed with the Franchise Tax Board by the taxpayer or the
Internal Revenue Service, if after the six-month period required in
Section 18622, a taxpayer or the Internal Revenue Service reports a
change or correction.
(2) The suspension period under subdivision (a) shall mean the
period beginning on the day after the close of the notification
period under paragraph (1) and ending on the date which is 15 days
after the date on which notice described in subdivision (a) is
provided by the Franchise Tax Board.
(f) For notices sent after January 1, 2004, this section does not
apply to taxpayers with taxable income greater than two hundred
thousand dollars ($200,000) that have been contacted by the Franchise
Tax Board regarding the use of a potentially abusive tax shelter
(within the meaning of Section 19777).
(g) This section shall apply to taxable years ending after October
10, 1999.
(h) The amendments made to this section by Chapter 691 of the
Statutes of 2005 shall apply to notices sent after January 1, 2005.
(i) (1) The amendments made to paragraph (1) of subdivision (b) by
the act adding this subdivision shall apply to notices provided
after January 1, 2011.
(2) Paragraph (3) of subdivision (b), as added by the act adding
this subdivision, shall apply to documents provided on or after
January 1, 2011.
19117. (a) The Franchise Tax Board shall include with each notice
to an individual taxpayer which includes an amount of interest
required to be paid by the taxpayer under this part information with
respect to the section under which interest is imposed and a
description of how the interest is computed. Upon the request of the
taxpayer, the Franchise Tax Board shall also provide a computation of
the interest.
(b) This section shall apply to any notice issued after December
31, 2001.
19120. Any portion of any amount that has been erroneously refunded
and that is recoverable by suit pursuant to Section 19411 shall bear
interest at the adjusted annual rate established pursuant to Section
19521 from the date of the payment of the refund. Abatement of
interest under this section is governed by subdivision (c) of Section
19104.
19101. (a) If any amount of tax imposed by Part 10 (commencing with
Section 17001) or Part 11 (commencing with Section 23001), is not
paid on or before the last date prescribed for payment, interest on
that amount at the adjusted annual rate established under Section
19521 shall be paid for the period from that last date to the date
paid.
(b) For purposes of this article, the last date prescribed for
payment of the tax shall be determined under Chapter 4 (commencing
with Section 19001), with the application of the following rules:
(1) The last date prescribed for payment shall be determined
without regard to any extension of time for payment or any
installment agreement entered into under Section 19008.
(2) The last date prescribed for payment shall be determined
without regard to any notice and demand for payment issued, by reason
of jeopardy as provided in Article 5 (commencing with Section
19081), prior to the last date otherwise prescribed for that payment.
(3) In all other cases in which the last date for payment is not
otherwise prescribed, the last date for payment shall be deemed to be
the date the liability for tax arises (and in no event shall be
later than the date notice and demand for the tax is made by the
Franchise Tax Board).
(c) Except as provided in this article:
(1) Interest prescribed under this article on any tax shall be
paid upon notice and demand, and shall be assessed, collected, and
paid in the same manner as taxes. Any reference in Part 10
(commencing with Section 17001), Part 11 (commencing with Section
23001), or this part (except Article 3 (commencing with Section
19031), relating to deficiency assessments) to any tax imposed by
Part 10 (commencing with Section 17001) or Part 11 (commencing with
Section 23001) shall be deemed also to refer to interest imposed by
this article on that tax.
(2) (A) Interest shall be imposed under subdivision (a) in respect
to any assessable penalty, additional amount, or addition to the tax
(other than an addition to tax imposed under Section 19131, 19132,
or 19164) only if that assessable penalty, additional amount, or
addition to the tax is not paid within 15 calendar days from the date
of notice and demand therefor, and in that case interest shall be
imposed only for the period from the date of the notice and demand to
the date of payment.
(B) Interest shall be imposed under this article with respect to
any addition to tax imposed by Section 19131 (relating to failure to
file a return on or before the due date), Section 19132 (relating to
underpayment of tax), or Section 19164 (relating to imposition of the
accuracy-related penalty), for the period that:
(i) Begins on the date on which the return of the tax with respect
to which that addition to tax is imposed is required to be filed
(including any extensions), and
(ii) Ends on the date of payment of that addition to tax.
(3) If notice and demand is made for payment of any amount and if
that amount is paid within 15 calendar days after the date of the
notice and demand, interest under this article on the amount so paid
shall not be imposed for the period after the date of the notice and
demand.
(d) This article shall not apply to any failure to pay estimated
tax required by Section 19025 or 19136.
19104. (a) The Franchise Tax Board may abate all or any part of any
of the following:
(1) Any interest on a deficiency or related to a proposed
deficiency to the extent that interest is attributable in whole or in
part to any unreasonable error or delay by an officer or employee of
the Franchise Tax Board (acting in his or her official capacity) in
performing a ministerial or managerial act.
(2) Any interest on a payment of any tax described in Section
19033 to the extent that any delay in that payment is attributable to
an officer or employee of the Franchise Tax Board (acting in his or
her official capacity) being dilatory in performing a ministerial or
managerial act.
(3) Any interest accruing from a deficiency based on a final
federal determination of tax, for the same period that interest was
abated on the related federal deficiency amount under Section 6404(e)
of the Internal Revenue Code, and the error or delay occurred on or
before the issuance of the final federal determination. This
subparagraph shall apply to any ministerial act for which the
interest accrued after September 25, 1987, or for any managerial act
applicable to a taxable year beginning on or after January 1, 1998,
for which the Franchise Tax Board may propose an assessment or allow
a claim for refund.
(b) For purposes of subdivision (a):
(1) Except as provided in paragraph (3), an error or delay shall
be taken into account only if no significant aspect of that error or
delay can be attributed to the taxpayer involved and after the
Franchise Tax Board has contacted the taxpayer in writing with
respect to that deficiency or payment.
(2) (A) Except as provided in paragraph (4), after the Franchise
Tax Board mails its notice of determination not to abate interest, a
taxpayer may appeal the Franchise Tax Board's determination to the
State Board of Equalization within the following periods:
(i) Thirty days in the case of any unpaid interest described under
subdivision (a).
(ii) Ninety days in the case of any paid interest described under
subdivision (a).
(B) The State Board of Equalization shall have jurisdiction over
the appeal to determine whether the Franchise Tax Board's failure to
abate interest under this section was an abuse of discretion, and may
order an abatement.
(C) Except for clauses (i) and (ii) of subparagraph (A), the
provisions of this paragraph are operative for requests for abatement
of interest made on or after January 1, 1998. The provisions of
clauses (i) and (ii) of subparagraph (A) shall apply to requests for
abatement of interest made on or after January 1, 2001, in accordance
with subdivision (d).
(3) If the Franchise Tax Board fails to mail its notice of
determination on a request to abate interest within six months after
the request is filed, the taxpayer may consider that the Franchise
Tax Board has determined not to abate interest and appeal that
determination to the board. This paragraph shall not apply to
requests for abatement of interest made pursuant to paragraph (4).
(4) A request for abatement of interest related to a proposed
deficiency may be made with the written protest of the underlying
proposed deficiency filed pursuant to Section 19041 or with an appeal
to the board under Section 19045 in the form and manner required by
the Franchise Tax Board. The action of the Franchise Tax Board
denying any portion of the request for abatement of interest relating
to the proposed deficiency shall be considered as part of the appeal
of the action of the Franchise Tax Board on the protest of the
proposed deficiency. If the taxpayer filed an appeal from the
Franchise Tax Board's action on the protest of a proposed deficiency
and the deficiency is final pursuant to Section 19048, the taxpayer
may not thereafter request an abatement of interest accruing prior to
the time the deficiency is final. However, the taxpayer may
thereafter request an abatement pursuant to this section limited to
interest accruing after the deficiency is final.
(c) The Franchise Tax Board shall abate the assessment of all
interest on any erroneous refund for which an action for recovery is
provided under Section 19411 until 30 days after the date demand for
repayment is made, unless the taxpayer (or a related party) has in
any way caused that erroneous refund.
(d) The amendments made to this section by Chapter 863 of the
Statutes of 2000 shall apply to requests for abatement of interest
and appeals made on or after January 1, 2001.
(e) Except as provided in subparagraph (C) of paragraph (2) of
subdivision (b), the amendments made by Chapter 600 of the Statutes
of 1997 are operative with respect to taxable years beginning on or
after January 1, 1998.
19105. In the case of an individual or fiduciary, the Franchise Tax
Board shall not assess interest charges pursuant to Section 19101
for the period between 45 days after the date of final review of an
audit determining an additional amount is owed and the date a notice
of proposed deficiency assessment is sent to the taxpayer.
19107. Where an overpayment is made by any individual for any year,
and a deficiency is owing from the husband or wife of the taxpayer
for the same year, and both husband and wife notify the Franchise Tax
Board in writing prior to the expiration of the time within which
credit for the overpayment may be allowed that the overpayment may be
credited against the deficiency, no interest shall be assessed on
that portion of the deficiency as is extinguished by the credit for
the period of time subsequent to the date the overpayment was made.
19108. (a) Where an overpayment is made by any taxpayer for any
year, and a deficiency is owing from the same taxpayer for any other
year, the overpayment, if the period within which credit for the
overpayment may be allowed has not expired, shall be credited on the
deficiency, if the period within which assessment of the deficiency
may be proposed has not expired, and the balance, if any, shall be
credited or refunded to the taxpayer. No interest shall be assessed
on the portion of the deficiency as is extinguished by the credit for
the period of time subsequent to the date the overpayment was made.
(b) For the purposes of this section the returns of a decedent and
his or her estate shall be considered returns of the same taxpayer
and the returns for the decedent and his or her estate filed for the
year of death shall be considered returns for different taxable
years.
(c) This section is not intended, nor shall it be construed, as a
limitation on the Franchise Tax Board's right to offset or recoup
barred assessments against overpayments.
19109. (a) If the Franchise Tax Board extends for any period the
time for filing a return under Section 18572 or subdivision (a) of
Section 18567 and the time for paying the tax under Section 18572 or
subdivision (c) of Section 18567 (and waives any penalties relating
to the failure to so file or so pay) for any taxpayer located in a
presidentially declared disaster area or any county or city in this
state which is proclaimed by the Governor to be in a state of
disaster that incurred a loss, the Franchise Tax Board shall,
notwithstanding subdivision (b) of Section 18572, abate for that
period the assessment of any interest prescribed under this article
on that tax.
(b) For purposes of subdivision (a), the term "presidentially
declared disaster area" means, with respect to any taxpayer, any area
which the President has determined warrants assistance by the
federal government under the Disaster Relief and Emergency Assistance
Act.
19110. (a) When the correction of an erroneous inclusion or
deduction of an item or items in the computation of income of a
trust, estate, parent, husband, or wife for any year results in an
overpayment for that year by the trust, estate, parent, husband, or
wife, and also results in a deficiency for the same year for a
grantor of the trust or beneficiary of the estate or trust, or child
of the parent, or spouse of the child, or the spouse of the husband
or wife, the overpayment, if the period within which credit for the
overpayment may be allowed has not expired, shall be credited on the
deficiency, if the period within which the deficiency may be proposed
has not expired, and the balance, if any, shall be credited or
refunded. No interest shall be assessed on the portion of the
deficiency as is extinguished by the credit for the period of time
subsequent to the date the overpayment was made.
(b) When the correction of an erroneous inclusion or deduction of
an item or items in the computation of income of a grantor of a
trust, beneficiary of an estate or trust, a child, or spouse of the
child, or a husband or wife for any year results in an overpayment
for that year by the grantor, beneficiary, child or husband or wife,
and also results in a deficiency for the same year for the grantor's
or beneficiary's trust, the beneficiary's estate, the child's parent,
or spouse of the child, or the beneficiary's spouse, the
overpayment, if the period within which credit for the overpayment
may be allowed has not expired, shall be credited on the deficiency,
if the period within which the deficiency may be proposed has not
expired, and the balance, if any, shall be credited or refunded. No
interest shall be assessed on the portion of the deficiency as is
extinguished by the credit for the period of time subsequent to the
date the overpayment was made.
(c) Subdivisions (a) and (b) are not intended, nor shall they be
construed as a limitation on the Franchise Tax Board's right to
offset or recoup barred assessments against overpayments.
19112. Interest may be waived for any period for which the
Franchise Tax Board determines that an individual or fiduciary
demonstrates inability to pay that interest solely because of extreme
financial hardship caused by significant disability or other
catastrophic circumstance. Any waiver under this section shall be
withdrawn retroactively if made because of fraud, malfeasance,
misrepresentation, or omission of any material fact.
19113. If any portion of a tax is satisfied by credit of an
overpayment, then no interest shall be imposed under this article on
the portion of the tax so satisfied for any period during which, if
the credit had not been made, interest would have been allowable with
respect to the overpayment.
19114. Interest prescribed under this article on any tax may be
assessed and collected at any time during the period within which the
tax to which the interest relates may be collected.
19116. (a) In the case of an individual who files a return of tax
imposed under Part 10 (commencing with Section 17001) for a taxable
year on or before the due date for the return, including extensions,
if the Franchise Tax Board does not provide a notice to the taxpayer
specifically stating the taxpayer's liability and the basis of the
liability before the close of the notification period, the Franchise
Tax Board shall suspend the imposition of any interest, penalty,
addition to tax, or additional amount with respect to any failure
relating to the return which is computed by reference to the period
of time the failure continues to exist and which is properly
allocable to the suspension period.
(b) For purposes of this section:
(1) Except as provided in subdivision (e), "notification period"
means the 36-month period beginning on the later of either of the
following:
(A) The date on which the return is filed.
(B) The due date of the return without regard to extensions.
(2) "Suspension period" means the period beginning on the day
after the close of the notification period and ending on the date
which is 15 days after the date on which notice described in
subdivision (a) is provided by the Franchise Tax Board.
(3) If, after the return for a taxable year is filed, the taxpayer
provides to the Franchise Tax Board one or more signed written
documents showing that the taxpayer owes an additional amount of tax
for the taxable year, paragraph (1) shall be applied by substituting
the date the last of the documents was provided for the date on which
the return was filed.
(c) This section shall be applied separately with respect to each
item or adjustment.
(d) This section shall not apply to any of the following:
(1) Any penalty imposed by Section 19131.
(2) Any penalty imposed by Section 19132.
(3) Any interest, penalty, addition to tax, or additional amount
involving fraud.
(4) Any interest, penalty, addition to tax, or additional amount
with respect to any tax liability shown on the return.
(5) Any criminal penalty.
(6) Any interest, penalty, addition to tax, or additional amount
with respect to any gross misstatement.
(7) Any interest, penalty, addition to tax, or additional amount
relating to any reportable transaction with respect to which the
requirements of Section 6664(d)(2)(A) of the Internal Revenue Code
are not met, and any listed transaction, as defined in Section 6707A
(c) of the Internal Revenue Code.
(e) For taxpayers required by subdivision (a) of Section 18622 to
report a change or correction by the Commissioner of Internal Revenue
or other officer of the United States or other competent authority
the following rules shall apply:
(1) The notification period under subdivision (a) shall be either
of the following:
(A) One year from the date the notice required by Section 18622 is
filed with the Franchise Tax Board by the taxpayer or the Internal
Revenue Service, if the taxpayer or the Internal Revenue Service
reports that change or correction within six months after the final
federal determination.
(B) Two years from the date when the notice required by Section
18622 is filed with the Franchise Tax Board by the taxpayer or the
Internal Revenue Service, if after the six-month period required in
Section 18622, a taxpayer or the Internal Revenue Service reports a
change or correction.
(2) The suspension period under subdivision (a) shall mean the
period beginning on the day after the close of the notification
period under paragraph (1) and ending on the date which is 15 days
after the date on which notice described in subdivision (a) is
provided by the Franchise Tax Board.
(f) For notices sent after January 1, 2004, this section does not
apply to taxpayers with taxable income greater than two hundred
thousand dollars ($200,000) that have been contacted by the Franchise
Tax Board regarding the use of a potentially abusive tax shelter
(within the meaning of Section 19777).
(g) This section shall apply to taxable years ending after October
10, 1999.
(h) The amendments made to this section by Chapter 691 of the
Statutes of 2005 shall apply to notices sent after January 1, 2005.
(i) (1) The amendments made to paragraph (1) of subdivision (b) by
the act adding this subdivision shall apply to notices provided
after January 1, 2011.
(2) Paragraph (3) of subdivision (b), as added by the act adding
this subdivision, shall apply to documents provided on or after
January 1, 2011.
19117. (a) The Franchise Tax Board shall include with each notice
to an individual taxpayer which includes an amount of interest
required to be paid by the taxpayer under this part information with
respect to the section under which interest is imposed and a
description of how the interest is computed. Upon the request of the
taxpayer, the Franchise Tax Board shall also provide a computation of
the interest.
(b) This section shall apply to any notice issued after December
31, 2001.
19120. Any portion of any amount that has been erroneously refunded
and that is recoverable by suit pursuant to Section 19411 shall bear
interest at the adjusted annual rate established pursuant to Section
19521 from the date of the payment of the refund. Abatement of
interest under this section is governed by subdivision (c) of Section
19104.
19101. (a) If any amount of tax imposed by Part 10 (commencing with
Section 17001) or Part 11 (commencing with Section 23001), is not
paid on or before the last date prescribed for payment, interest on
that amount at the adjusted annual rate established under Section
19521 shall be paid for the period from that last date to the date
paid.
(b) For purposes of this article, the last date prescribed for
payment of the tax shall be determined under Chapter 4 (commencing
with Section 19001), with the application of the following rules:
(1) The last date prescribed for payment shall be determined
without regard to any extension of time for payment or any
installment agreement entered into under Section 19008.
(2) The last date prescribed for payment shall be determined
without regard to any notice and demand for payment issued, by reason
of jeopardy as provided in Article 5 (commencing with Section
19081), prior to the last date otherwise prescribed for that payment.
(3) In all other cases in which the last date for payment is not
otherwise prescribed, the last date for payment shall be deemed to be
the date the liability for tax arises (and in no event shall be
later than the date notice and demand for the tax is made by the
Franchise Tax Board).
(c) Except as provided in this article:
(1) Interest prescribed under this article on any tax shall be
paid upon notice and demand, and shall be assessed, collected, and
paid in the same manner as taxes. Any reference in Part 10
(commencing with Section 17001), Part 11 (commencing with Section
23001), or this part (except Article 3 (commencing with Section
19031), relating to deficiency assessments) to any tax imposed by
Part 10 (commencing with Section 17001) or Part 11 (commencing with
Section 23001) shall be deemed also to refer to interest imposed by
this article on that tax.
(2) (A) Interest shall be imposed under subdivision (a) in respect
to any assessable penalty, additional amount, or addition to the tax
(other than an addition to tax imposed under Section 19131, 19132,
or 19164) only if that assessable penalty, additional amount, or
addition to the tax is not paid within 15 calendar days from the date
of notice and demand therefor, and in that case interest shall be
imposed only for the period from the date of the notice and demand to
the date of payment.
(B) Interest shall be imposed under this article with respect to
any addition to tax imposed by Section 19131 (relating to failure to
file a return on or before the due date), Section 19132 (relating to
underpayment of tax), or Section 19164 (relating to imposition of the
accuracy-related penalty), for the period that:
(i) Begins on the date on which the return of the tax with respect
to which that addition to tax is imposed is required to be filed
(including any extensions), and
(ii) Ends on the date of payment of that addition to tax.
(3) If notice and demand is made for payment of any amount and if
that amount is paid within 15 calendar days after the date of the
notice and demand, interest under this article on the amount so paid
shall not be imposed for the period after the date of the notice and
demand.
(d) This article shall not apply to any failure to pay estimated
tax required by Section 19025 or 19136.
19104. (a) The Franchise Tax Board may abate all or any part of any
of the following:
(1) Any interest on a deficiency or related to a proposed
deficiency to the extent that interest is attributable in whole or in
part to any unreasonable error or delay by an officer or employee of
the Franchise Tax Board (acting in his or her official capacity) in
performing a ministerial or managerial act.
(2) Any interest on a payment of any tax described in Section
19033 to the extent that any delay in that payment is attributable to
an officer or employee of the Franchise Tax Board (acting in his or
her official capacity) being dilatory in performing a ministerial or
managerial act.
(3) Any interest accruing from a deficiency based on a final
federal determination of tax, for the same period that interest was
abated on the related federal deficiency amount under Section 6404(e)
of the Internal Revenue Code, and the error or delay occurred on or
before the issuance of the final federal determination. This
subparagraph shall apply to any ministerial act for which the
interest accrued after September 25, 1987, or for any managerial act
applicable to a taxable year beginning on or after January 1, 1998,
for which the Franchise Tax Board may propose an assessment or allow
a claim for refund.
(b) For purposes of subdivision (a):
(1) Except as provided in paragraph (3), an error or delay shall
be taken into account only if no significant aspect of that error or
delay can be attributed to the taxpayer involved and after the
Franchise Tax Board has contacted the taxpayer in writing with
respect to that deficiency or payment.
(2) (A) Except as provided in paragraph (4), after the Franchise
Tax Board mails its notice of determination not to abate interest, a
taxpayer may appeal the Franchise Tax Board's determination to the
State Board of Equalization within the following periods:
(i) Thirty days in the case of any unpaid interest described under
subdivision (a).
(ii) Ninety days in the case of any paid interest described under
subdivision (a).
(B) The State Board of Equalization shall have jurisdiction over
the appeal to determine whether the Franchise Tax Board's failure to
abate interest under this section was an abuse of discretion, and may
order an abatement.
(C) Except for clauses (i) and (ii) of subparagraph (A), the
provisions of this paragraph are operative for requests for abatement
of interest made on or after January 1, 1998. The provisions of
clauses (i) and (ii) of subparagraph (A) shall apply to requests for
abatement of interest made on or after January 1, 2001, in accordance
with subdivision (d).
(3) If the Franchise Tax Board fails to mail its notice of
determination on a request to abate interest within six months after
the request is filed, the taxpayer may consider that the Franchise
Tax Board has determined not to abate interest and appeal that
determination to the board. This paragraph shall not apply to
requests for abatement of interest made pursuant to paragraph (4).
(4) A request for abatement of interest related to a proposed
deficiency may be made with the written protest of the underlying
proposed deficiency filed pursuant to Section 19041 or with an appeal
to the board under Section 19045 in the form and manner required by
the Franchise Tax Board. The action of the Franchise Tax Board
denying any portion of the request for abatement of interest relating
to the proposed deficiency shall be considered as part of the appeal
of the action of the Franchise Tax Board on the protest of the
proposed deficiency. If the taxpayer filed an appeal from the
Franchise Tax Board's action on the protest of a proposed deficiency
and the deficiency is final pursuant to Section 19048, the taxpayer
may not thereafter request an abatement of interest accruing prior to
the time the deficiency is final. However, the taxpayer may
thereafter request an abatement pursuant to this section limited to
interest accruing after the deficiency is final.
(c) The Franchise Tax Board shall abate the assessment of all
interest on any erroneous refund for which an action for recovery is
provided under Section 19411 until 30 days after the date demand for
repayment is made, unless the taxpayer (or a related party) has in
any way caused that erroneous refund.
(d) The amendments made to this section by Chapter 863 of the
Statutes of 2000 shall apply to requests for abatement of interest
and appeals made on or after January 1, 2001.
(e) Except as provided in subparagraph (C) of paragraph (2) of
subdivision (b), the amendments made by Chapter 600 of the Statutes
of 1997 are operative with respect to taxable years beginning on or
after January 1, 1998.
19105. In the case of an individual or fiduciary, the Franchise Tax
Board shall not assess interest charges pursuant to Section 19101
for the period between 45 days after the date of final review of an
audit determining an additional amount is owed and the date a notice
of proposed deficiency assessment is sent to the taxpayer.
19107. Where an overpayment is made by any individual for any year,
and a deficiency is owing from the husband or wife of the taxpayer
for the same year, and both husband and wife notify the Franchise Tax
Board in writing prior to the expiration of the time within which
credit for the overpayment may be allowed that the overpayment may be
credited against the deficiency, no interest shall be assessed on
that portion of the deficiency as is extinguished by the credit for
the period of time subsequent to the date the overpayment was made.
19108. (a) Where an overpayment is made by any taxpayer for any
year, and a deficiency is owing from the same taxpayer for any other
year, the overpayment, if the period within which credit for the
overpayment may be allowed has not expired, shall be credited on the
deficiency, if the period within which assessment of the deficiency
may be proposed has not expired, and the balance, if any, shall be
credited or refunded to the taxpayer. No interest shall be assessed
on the portion of the deficiency as is extinguished by the credit for
the period of time subsequent to the date the overpayment was made.
(b) For the purposes of this section the returns of a decedent and
his or her estate shall be considered returns of the same taxpayer
and the returns for the decedent and his or her estate filed for the
year of death shall be considered returns for different taxable
years.
(c) This section is not intended, nor shall it be construed, as a
limitation on the Franchise Tax Board's right to offset or recoup
barred assessments against overpayments.
19109. (a) If the Franchise Tax Board extends for any period the
time for filing a return under Section 18572 or subdivision (a) of
Section 18567 and the time for paying the tax under Section 18572 or
subdivision (c) of Section 18567 (and waives any penalties relating
to the failure to so file or so pay) for any taxpayer located in a
presidentially declared disaster area or any county or city in this
state which is proclaimed by the Governor to be in a state of
disaster that incurred a loss, the Franchise Tax Board shall,
notwithstanding subdivision (b) of Section 18572, abate for that
period the assessment of any interest prescribed under this article
on that tax.
(b) For purposes of subdivision (a), the term "presidentially
declared disaster area" means, with respect to any taxpayer, any area
which the President has determined warrants assistance by the
federal government under the Disaster Relief and Emergency Assistance
Act.
19110. (a) When the correction of an erroneous inclusion or
deduction of an item or items in the computation of income of a
trust, estate, parent, husband, or wife for any year results in an
overpayment for that year by the trust, estate, parent, husband, or
wife, and also results in a deficiency for the same year for a
grantor of the trust or beneficiary of the estate or trust, or child
of the parent, or spouse of the child, or the spouse of the husband
or wife, the overpayment, if the period within which credit for the
overpayment may be allowed has not expired, shall be credited on the
deficiency, if the period within which the deficiency may be proposed
has not expired, and the balance, if any, shall be credited or
refunded. No interest shall be assessed on the portion of the
deficiency as is extinguished by the credit for the period of time
subsequent to the date the overpayment was made.
(b) When the correction of an erroneous inclusion or deduction of
an item or items in the computation of income of a grantor of a
trust, beneficiary of an estate or trust, a child, or spouse of the
child, or a husband or wife for any year results in an overpayment
for that year by the grantor, beneficiary, child or husband or wife,
and also results in a deficiency for the same year for the grantor's
or beneficiary's trust, the beneficiary's estate, the child's parent,
or spouse of the child, or the beneficiary's spouse, the
overpayment, if the period within which credit for the overpayment
may be allowed has not expired, shall be credited on the deficiency,
if the period within which the deficiency may be proposed has not
expired, and the balance, if any, shall be credited or refunded. No
interest shall be assessed on the portion of the deficiency as is
extinguished by the credit for the period of time subsequent to the
date the overpayment was made.
(c) Subdivisions (a) and (b) are not intended, nor shall they be
construed as a limitation on the Franchise Tax Board's right to
offset or recoup barred assessments against overpayments.
19112. Interest may be waived for any period for which the
Franchise Tax Board determines that an individual or fiduciary
demonstrates inability to pay that interest solely because of extreme
financial hardship caused by significant disability or other
catastrophic circumstance. Any waiver under this section shall be
withdrawn retroactively if made because of fraud, malfeasance,
misrepresentation, or omission of any material fact.
19113. If any portion of a tax is satisfied by credit of an
overpayment, then no interest shall be imposed under this article on
the portion of the tax so satisfied for any period during which, if
the credit had not been made, interest would have been allowable with
respect to the overpayment.
19114. Interest prescribed under this article on any tax may be
assessed and collected at any time during the period within which the
tax to which the interest relates may be collected.
19116. (a) In the case of an individual who files a return of tax
imposed under Part 10 (commencing with Section 17001) for a taxable
year on or before the due date for the return, including extensions,
if the Franchise Tax Board does not provide a notice to the taxpayer
specifically stating the taxpayer's liability and the basis of the
liability before the close of the notification period, the Franchise
Tax Board shall suspend the imposition of any interest, penalty,
addition to tax, or additional amount with respect to any failure
relating to the return which is computed by reference to the period
of time the failure continues to exist and which is properly
allocable to the suspension period.
(b) For purposes of this section:
(1) Except as provided in subdivision (e), "notification period"
means the 36-month period beginning on the later of either of the
following:
(A) The date on which the return is filed.
(B) The due date of the return without regard to extensions.
(2) "Suspension period" means the period beginning on the day
after the close of the notification period and ending on the date
which is 15 days after the date on which notice described in
subdivision (a) is provided by the Franchise Tax Board.
(3) If, after the return for a taxable year is filed, the taxpayer
provides to the Franchise Tax Board one or more signed written
documents showing that the taxpayer owes an additional amount of tax
for the taxable year, paragraph (1) shall be applied by substituting
the date the last of the documents was provided for the date on which
the return was filed.
(c) This section shall be applied separately with respect to each
item or adjustment.
(d) This section shall not apply to any of the following:
(1) Any penalty imposed by Section 19131.
(2) Any penalty imposed by Section 19132.
(3) Any interest, penalty, addition to tax, or additional amount
involving fraud.
(4) Any interest, penalty, addition to tax, or additional amount
with respect to any tax liability shown on the return.
(5) Any criminal penalty.
(6) Any interest, penalty, addition to tax, or additional amount
with respect to any gross misstatement.
(7) Any interest, penalty, addition to tax, or additional amount
relating to any reportable transaction with respect to which the
requirements of Section 6664(d)(2)(A) of the Internal Revenue Code
are not met, and any listed transaction, as defined in Section 6707A
(c) of the Internal Revenue Code.
(e) For taxpayers required by subdivision (a) of Section 18622 to
report a change or correction by the Commissioner of Internal Revenue
or other officer of the United States or other competent authority
the following rules shall apply:
(1) The notification period under subdivision (a) shall be either
of the following:
(A) One year from the date the notice required by Section 18622 is
filed with the Franchise Tax Board by the taxpayer or the Internal
Revenue Service, if the taxpayer or the Internal Revenue Service
reports that change or correction within six months after the final
federal determination.
(B) Two years from the date when the notice required by Section
18622 is filed with the Franchise Tax Board by the taxpayer or the
Internal Revenue Service, if after the six-month period required in
Section 18622, a taxpayer or the Internal Revenue Service reports a
change or correction.
(2) The suspension period under subdivision (a) shall mean the
period beginning on the day after the close of the notification
period under paragraph (1) and ending on the date which is 15 days
after the date on which notice described in subdivision (a) is
provided by the Franchise Tax Board.
(f) For notices sent after January 1, 2004, this section does not
apply to taxpayers with taxable income greater than two hundred
thousand dollars ($200,000) that have been contacted by the Franchise
Tax Board regarding the use of a potentially abusive tax shelter
(within the meaning of Section 19777).
(g) This section shall apply to taxable years ending after October
10, 1999.
(h) The amendments made to this section by Chapter 691 of the
Statutes of 2005 shall apply to notices sent after January 1, 2005.
(i) (1) The amendments made to paragraph (1) of subdivision (b) by
the act adding this subdivision shall apply to notices provided
after January 1, 2011.
(2) Paragraph (3) of subdivision (b), as added by the act adding
this subdivision, shall apply to documents provided on or after
January 1, 2011.
19117. (a) The Franchise Tax Board shall include with each notice
to an individual taxpayer which includes an amount of interest
required to be paid by the taxpayer under this part information with
respect to the section under which interest is imposed and a
description of how the interest is computed. Upon the request of the
taxpayer, the Franchise Tax Board shall also provide a computation of
the interest.
(b) This section shall apply to any notice issued after December
31, 2001.
19120. Any portion of any amount that has been erroneously refunded
and that is recoverable by suit pursuant to Section 19411 shall bear
interest at the adjusted annual rate established pursuant to Section
19521 from the date of the payment of the refund. Abatement of
interest under this section is governed by subdivision (c) of Section
19104.
