California Appeals Office Sustains E-Pay Penalty Finding Income Taxpayers Could Have Scheduled Future E-Payment Date

The California Office of Tax Appeals (OTA) Aug. 22 sustained the e-pay penalty against Taxpayers for individual income tax purposes. Taxpayers made their fourth quarter estimated tax payment of $200,000 by check. The Franchise Tax Board (FTB) issued a 1 percent e-pay penalty. Taxpayers protested and subsequently paid the penalty. Taxpayers filed a refund claim. The FTB denied it. Taxpayers appealed. The OTA found: 1) e-payments were required for individuals making an estimated tax or extension payment of more than $20,000 or if filing an original tax return with liability over $80,000; 2) individuals who became subject to the e-pay ...