How do I formally protest a tax deficiency proposed by the California Franchise Tax Board?

To formally protest a tax deficiency, you must file a written protest with the Franchise Tax Board (FTB) within 60 days of the date on their Notice of Proposed Assessment. Failure to meet this deadline will make the proposed tax final. Here is how to file a formal protest: Step 1: Review the Notice of Proposed Assessment (NPA) Carefully read the NPA you received from the FTB. This notice explains why the FTB believes you owe more tax, the amount, and the tax years involved. Understanding the FTB's reasoning is critical to forming your argument. Step 2: Write Your Protest Letter Your protest must be in writing. It should include your full name, address, tax identification number (SSN or FEIN), the tax years in question, and the specific amounts you are disputing. Most importantly, you must clearly state the factual and legal reasons why you believe the proposed assessment is incorrect. Step 3: Gather Supporting Documents Collect all records that support your position, such as receipts, bank statements, contracts, or federal determination letters. Make copies of these documents to include with your protest letter; do not send originals. Step 4: Mail Your Protest Within 60 Days Per California Revenue and Taxation Code Section 19041, you must mail your protest within 60 days of the date on the NPA. Send the letter and your supporting documents to the FTB address provided on the notice, usually the Protest Section. Use certified mail with a return receipt as proof of timely filing. Step 5: Participate in the Protest Hearing After the FTB reviews your protest, they may request more information or schedule an oral hearing to discuss your case, as allowed by Revenue and Taxation Code Section 19044. If your protest is denied, you can then appeal to the Office of Tax Appeals. Important Considerations: The 60-day deadline is absolute. If you miss it, you lose your right to protest and the assessment becomes a legally collectible debt. Interest continues to build on the proposed tax amount during the entire protest process. Note: This process is for protesting a proposed assessment. If the FTB has already finalized the assessment and issued a Notice of Action, your next step is to file an appeal with the California Office of Tax Appeals, not a protest with the FTB. This is general information and does not constitute legal advice. For complex situations, consult with a qualified California attorney.