What are the first steps to take after receiving a "Notice of Proposed Assessment" from the California FTB?

Upon receiving a Notice of Proposed Assessment (NPA) from the FTB, you must review it carefully and file a formal written protest before the deadline if you disagree with the proposed changes. Here are the first steps to take: Step 1: Review the Notice and Deadline Carefully read the entire NPA. Identify the tax year in question, the amount the FTB claims you owe, and the specific reasons for the assessment. Most importantly, find the date of the notice. You generally have 60 days from the date on the notice to file a protest. Step 2: Gather Your Supporting Documents Collect all records related to the tax year mentioned in the notice. This includes your filed state and federal tax returns, W-2s, 1099s, receipts for deductions or credits, bank statements, and any other documentation that proves your income and expenses as you originally reported them. Step 3: File a Formal Written Protest If you disagree with the NPA, you must file a formal protest in writing. Your protest letter must include your name, address, social security number, the amounts and tax years you are protesting, and a clear statement of why you believe the FTB's assessment is incorrect. You must sign the letter and mail it to the address provided on the NPA. Make sure it is postmarked before the 60-day deadline expires. Step 4: Consider Paying the Proposed Tax To stop interest from accruing while your protest is under review, you can choose to pay the amount shown on the NPA. Paying the tax does not invalidate your protest rights. If your protest is successful, the FTB will refund any amount you overpaid, with interest. Important Details: Filing a protest is a formal legal step that preserves your right to appeal. Once the FTB receives your protest, they will assign your case to a hearing officer who will review your arguments and evidence. Warnings and Limitations: Do not ignore a Notice of Proposed Assessment. If you fail to file a protest within the 60-day deadline, the proposed assessment will become final and due. The FTB can then begin collection actions, which may include wage garnishments and bank levies. Interest and penalties will continue to accumulate on any unpaid balance. This is general information and does not constitute legal advice. For complex situations, or if the amount is significant, you should consult with a qualified California tax attorney or CPA to ensure your rights are protected.