Beginning January 1, 2011, we began enforcing the mandatory e-pay penalty. (California Taxation and Revenue Code 19011.5)
Acknowledging high year-end postal volumes, we recognize that there could be delays in our receipt of payments postmarked on or before December 31st, 2010. As a result, we are reviewing accounts where the penalty was assessed and determining if the mail date of the payment occurred on or before December 31st. For accounts determined to meet this one-time exception, we will contact the taxpayer by letter explaining that the penalty has been withdrawn.
If you require more immediate resolution of the issue, please contact us at 916.845.7057 or your client can call 800.852.5711. Please be prepared to provide the appropriate information to determine if the penalty should be withdrawn. We will be enforcing the mandatory e-pay penalty, where appropriate, on all other payments.
The penalty applies to personal income taxpayers whose tax liability is greater than $80,000, or who make an estimated tax or extension payment that exceeds $20,000 for taxable years beginning on or after January 1, 2009. Once either of these conditions is met, all payments regardless of type, amount, or tax year must be remitted electronically. Electronic payment methods include Electronic Funds Withdrawal (EFW), Web Pay, or credit card.
There is a one percent penalty of the amount paid unless the failure to pay electronically was for reasonable cause and not willful neglect.