California Appeals Office Reverses FTB’s Late Individual Income Tax Payment Penalty, Affirms Estimated Tax Penalty

The California Office of Tax Appeals (OTA) Dec. 22, 2022 reversed the Franchise Tax Board’s (FTB) action to the extent the FTB erroneously assessed a late payment penalty. The FTB determined that Taxpayers, a married couple, overreported their estimated individual income tax payments and didn’t pay their entire tax liability before the due date. The FTB imposed a late payment penalty, an estimated tax penalty, and applicable interest. Taxpayers made a timely payment but the FTB failed to apply it to the assessment. Taxpayers appealed and the OTA found: 1) the FTB’s assessment was erroneous to the extent it assessed ...