California Finds No Reason for Small Partnership’s Late Filing

The California State Board of Equalization (SBOE) sustained the Franchise Tax Board’s (FTB) denial of Taxpayer’s corporate income tax refund claim. Taxpayer, a five-member partnership, filed untimely partnership returns and was assessed late filing penalties. Taxpayer paid the penalties and filed claims for refund, contending that it had reasonable cause for late filing due to its small amount of activity, and that the partners prepared and filed the tax returns as soon as they became aware of the filing requirement. The SBOE held that: 1) a reasonable cause requires the exercise of ordinary business care; 2) California law doesn’t conform ...