Sharing my two cents about California
I would like to share my experience in dealing with the California FTB. Actually this is not my personal experience but it is a situation I am dealing with for a elderly friend of mine.
My friend got this amnesty notice from 1988 and 1989. They say he owes about $12,000. So I called the state for him and asked them to tell me where his income came from.
For tax year 1988, they say my friend had a license with the Bureau of Automotive Repair. And because he supposedly had this license and did not file a tax return, they have estimated his income based on the industry average and taxed him accordingly. The tax, penalties and interest total about $11,000. Now here is the weird part. They show taxes withheld of like $1200 and a payment of $1800. Now, if taxes were withheld, they are withheld usually by a company who has to report that. Yet, they have estimated his income based on an industry average. There is no way taxes can be withheld and no company has been listed as reporting doing the withholding. The second weird thing is they show my friend making a payment of appx $1800. While my friend cannot confirm or deny making a payment, I am 99% he did not.
I told the state of CA that I think they have a mistake. I think they have the wrong person. I was told quite clearly that if I wanted the numbers changed to file the tax return. So file I did. I filled out the tax return showing $0 income. Actually he did have some interest income so I did show that but the bottom line is I filled out the return and essentially his income is zero and it shows that they owe him $3000. I don't expect to get the $3000, but that is what was filed.
His situation from 1989 is legit. I filed a tax return for him and he does owe. I am hoping that the 1988 over payement even though they will not sent the cash I am sure, perhaps they will apply it to 1989 and cancel it out so essentially my friend will owe nothing.
I personally agree with a lot of the statements that I have seen here in this thread that CA is having financial problems and this is an attempt to collect some additional revenue. There are two things that come to mind on this. One is that what has the FTB been doing all these years with these supposed non filed tax returns? I say too many lunch breaks and government holidays. The second I have with all this is I think what the state is doing is criminal. Something seriously needs to be done about this. If anyone knows of any lawyer or activist groups that are planning on fighting this, please let me know. I live out of state but what I see happening is just downright wrong.