Legal Question in Tax Law in California

Got bill for 2020 CA state income, with interest & penalties, at the house I used to own with my ex. Divorce finalized in 2010; she got the house, has been making the payments herself since Jan 2009. The loan was modified to remove my name and has since been refinanced.
Apparently my name was on a 1098, and, based on that, CA FTB guesstimated a minimum income for me, and is billing me for it. I haven't had CA state income since 2008. The FTB rep said I should send in proof she's been paying the mortgage herself - but this wouldn't prove I didn't have CA income; I could've been giving her cash.
Also, even if I was paying the mortgage myself, it could've been from out-of-state income or savings. My 2020 Fed/State income tax returns show no mortgage interest deduction, and only state income from where I now live.
1) Is it legal for CA to bill me for state income I didn't have, when it can't prove I did?
2) What are my options to get CA to correct the record and cancel the bill?

Asked on 2/15/24, 7:48 pm

2 Answers from Attorneys

Christian Montgomery Montgomery & Wetenkamp, Attorneys At Law

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My law firm has resolved several of these types of issues. The FTB gets creative in force filing assessments (assessing a tax balance when a return is not received but the government believes one should have been filed). Once a force filing or substitute for return is assessed, the balance is legally owed. The problem is that notice is rarely received by the liable taxpayer. This is a normal issue that many people that have moved out of California have to address years later. A formal filing with the facts and stern advocacy is one of the best ways to resolve this type of FTB tax debt issue.

Answered on 2/15/24, 8:16 pm

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