Repentants Beating Path to Franchise Board : State Tax Cheaters’ Amnesty Ends at Midnight

If you are one of thousands of Californians who have been cheating on state taxes, you have until midnight to make amends or face the consequences.

That is when the state’s Tax Amnesty program-- which has been using the rather ominous motto, “Get to us before we get to you”--ends.

On Monday, the state will be free to begin using a new, sophisticated computer system designed to ferret out tax cheaters. The state has also stiffened the penalties for tax offenders.

“The odds are increasing that you’re going to get caught and we’re going to do something to you,” said Janie Cordray, spokeswoman for the state Franchise Tax Board in Los Angeles.

Threats Working

In Van Nuys, threats of this sort seem to be working.

Since last week, 700 to 800 persons a day have been dropping by the board’s office at 6150 Van Nuys Blvd. to pick up amnesty forms or pay their delinquent taxes as the deadline approaches.

“We sure have had a lot more people than we anticipated,” said James W. Atkinson, franchise tax district manager.

Under the amnesty program, which began Dec. 10, all penalties related to personal income tax, sales and use tax owed to the Franchise Tax Board and the Board of Equalization have been forgiven. The state also has promised not to prosecute repentant taxpayers as criminals.

$70 Million Generated

However, participants still must pay interest on delinquent taxes, and taxpayers already under criminal investigation are not eligible to participate.

So far, the amnesty program statewide has generated $70 million, half of it coming from Los Angeles County.

Most delinquent taxpayers in the Valley differ in one respect from the rest in California. Statewide, the number of amnesty participants is split evenly between those who have received delinquent tax notices from the state and those who the state had no idea owed more taxes. In the Valley, most of the people seeking amnesty have already been notified by the state that they are in trouble, Atkinson said.

The Board of Equalization, which administers the state sales and use taxes and deals primarily with businesses, has not attracted as many tax cheaters as has the Franchise Tax Board, which processes personal income taxes. By contrast, about 60 persons have called the Board of Equalization’s Van Nuys office each week, inquiring about the amnesty program, said C.D. Gretzinger, the administrator.

Back to 1936

Apparently, some taxpayers believe the state can clear up all their tax problems. “We even had one (woman) out here yesterday who wanted an amnesty form for the state of Virginia,” said Atkinson of the Franchise Tax Board.

Taxpayers can clear their consciences on state tax transgressions dating all the way back to 1936.

No one in Van Nuys has gone back that far. But, Atkinson noted, “Someone just came clean on a 1951 Chevy.” The original tax bill was $57; with interest the bill came to $300.

No delinquent tax is too small to accept. One conscientious taxpayer went into the Van Nuys office with voluminous forms filled out, ready to atone for past sins. The bill amounted to $1.37.

Some taxpayers have fared even better. Many who thought they would have to pay are getting refunds, Cordray said.

Even a few thank-you notes have been inserted in the tax forms.

The Valley office, one of four tax board offices in Los Angeles County, also has had many tax protesters who have decided to pay up, Cordray said.

“We call them born-again taxpayers,” she said.

Waiting Room Gloomy

The pervasive mood in the Van Nuys waiting room is gloomy, reminiscent of the the office of a dentist who is running an hour late on his appointments. But everyone is generally polite.

“They’ve got you where they want you,” observed an assembly worker from the General Motors Corp.’s Van Nuys plant who was waiting for his number to be called.