Reasonable Cause

[jainen]

From Spidell's California Taxletter comes this advice about Reasonable Cause for waiving penalties. These are things Franchise Tax Board will consider IN ADDITION to whatever specific circumstances are cited by the taxpayer.

1) The manner in which the facts are presented (Did the taxpayer change the story along the way?)

2) Consistency of the taxpayer's statement and documentation provided (Do hospital record dates coincide with the taxpayer's statement?)

3) Accuracy of the taxpayer's statement based on FTB records

4) Completeness of the information provided (Many taxpayers provide only sketchy, unsubstantiated information and lose their cases.)

5) Time frame of the events.

6) Options available to the taxpayer (For example, if one spouse was in the hospital for an extended period, why didn't the other spouse file?)

7) Taxpayer's actions after the event or occurrence

8) The account history of the taxpayer (Habitual nonfilers will have a more difficult time proving reasonable cause.)

[mcb39]

Thanks Jainen...I have a few clients in California. However, I would imagine that list would be good informantion to have in ANY state.