Could numerous trusts qualify for California's 2005 tax amnesty by submitting agreed electronic return data and payments by June 30, 2005, after FTB-related filing-format delays?

Plain-English summary

California Chief Counsel Ruling 2005-0006 gave a specific filer until June 30, 2005 to provide electronic return information and payments for numerous trusts seeking California's 2005 tax amnesty.

FTB also confirmed that the agreed electronic data would count as a completed original tax return for each trust and tax year under section 19733(a)(3).

This was a taxpayer-specific accommodation tied to the expired 2005 amnesty program and delays in developing an acceptable electronic submission process. It is not a current filing extension.

Why the ordinary deadline was a problem

The filer had submitted many amnesty applications for trusts that had never filed California tax returns. Multiple trusts and multiple tax years were involved.

FTB staff and the filer were developing a mutually acceptable electronic format for the return information, payments, and payment accounting.

The ruling stated that the process might not be completed by the statutory May 31, 2005 deadline because of several factors, including unintentional FTB staff delays in specifying how the returns should be filed.

What the taxpayer requested

The taxpayer requested two determinations:

1. Additional time beyond the 60-day period in section 19733(a)(3) to file the required returns and pay the tax and interest needed for amnesty.
2. Written confirmation that the electronically submitted information would be treated as a completed original tax return for every trust and tax year.

Holding

FTB ruled that return information and associated payments delivered by June 30, 2005 would satisfy section 19733(a)(3) and allow the trusts to qualify for tax amnesty under section 19732 for the years involved.

FTB also ruled that the electronic return information would count as a completed original tax return for each trust and year.

The ruling did not create an open-ended extension or a general electronic-filing rule for other taxpayers.

What this means for you

Trustees and trust administrators

This ruling documents a historical, negotiated filing process for a large batch of previously unfiled trust returns. It does not authorize use of that process today.

Tax compliance teams

When an agency-approved bulk format is being developed, preserve all written instructions, format specifications, payment records, delay communications, and deadline confirmations.

Tax professionals

Do not cite the June 30, 2005 date as current relief. Check for a current statute, notice, program, or written taxpayer-specific extension.

Common questions

Q: Did FTB extend the trusts' completion date?

A: Yes, for this taxpayer. Electronic information and payments provided by June 30, 2005 were treated as satisfying the amnesty requirement.

Q: Did electronic information count as an original return?

A: Yes. FTB treated it as a completed original return for each trust and tax year.

Q: Why was relief granted?

A: The parties were developing a workable electronic format, and the ruling cited delays that included unintentional FTB staff delays.

Q: Is the 2005 amnesty program still available?

A: This ruling concerns an expired 2005 program and dates that have long passed.

Q: Did the ruling apply to all trust filers?

A: No. It applied only to the named taxpayer and its submitted facts.

Citations and references

• Cal. Rev. & Tax. Code §§ 19732 and 19733(a)(3)

Source

• Landing page: Chief Counsel Ruling index
• Official ruling: Chief Counsel Ruling 2005-0006

Original ruling text

STATE OF CALIFORNIA
STEVE WESTLY
FRANCHISE TAX BOARD – Legal Department
Chair
PO Box 1720
Rancho Cordova, CA 95741-1720
JOHN CHIANG
Telephone (916) 845-3337
Member
FAX (916) 843-6121
TOM CAMPBELL
Member

May 16, 2005
Chief Counsel Ruling 2005-0006

FACTS

*** filed a large number of amnesty applications for trusts that had not previously filed California tax returns. Due to the number of trusts and multiple tax years involved, Franchise Tax Board staff has been working with
*** to develop a mutually acceptable electronic format for the required return information to be submitted, and for payment to be made and properly accounted for. Due to various factors, some of which relate to unintentional Franchise Tax Board staff delays in specifying the form and manner in which these returns were to be filed, this process may not be completed before the statutory deadline of May 31, 2005 for filing returns and paying the taxes and interest due for each year.

ISSUE

The taxpayer has requested additional time beyond the 60-day period provided for in Revenue and Taxation Code section 19733(a)(3) to file the required returns and to pay the associated amounts due to qualify for tax amnesty. In addition, the taxpayer has requested that the Franchise Tax Board confirm in writing that the electronically-submitted return information will be treated as a "completed original tax return" for each trust for each tax year within the meaning of Revenue and Taxation Code section 19733(a)(3).

HOLDING

1. If the amnesty tax return information and associated payments are provided to
   the Franchise Tax Board no later than June 30, 2005, they will be considered to have met the requirements of Revenue and Taxation Code section 19733(a)(3) and so will allow the trusts to qualify for tax amnesty under Revenue and Taxation Code section 19732 for the tax years involved.

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May 16, 2005

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2. The electronically-submitted return information will be considered to be a
   "completed original tax return" for each tax year for purposes of Revenue and Taxation Code section 19733(a)(3).

Please be advised that the tax consequences expressed in this Chief Counsel Ruling are applicable only to the named taxpayer and are based upon and limited to the facts you have submitted. In the event of a change in relevant legislation, or judicial or administrative case law, a change in federal interpretation of federal law in cases where our opinion is based upon such an interpretation, or a change in the material facts or circumstances relating to your request upon which this opinion is based, this opinion may no longer be applicable. It is your responsibility to be aware of these changes, should they occur.

This letter is a legal ruling by the Franchise Tax Board's Chief Counsel within the meaning of paragraph (1) of subdivision (a) of section 21012 of the Revenue and Taxation Code. Please attach a copy of this letter and your request to the appropriate return(s) (if any) when filed or in response to any notices or inquiries which might be issued.

Very truly yours,

Bruce R. Langston
Lead Tax Counsel