20250AB__151998AMD INTRODUCED 2025-03-13 AMENDED_SENATE 2026-04-28 2025 AB AMD Introduced by Assembly Member Gipson <caml:Contribution>LEAD_AUTHOR</caml:Contribution><caml:House>ASSEMBLY</caml:House><caml:Name>Committee on Revenue and Taxation</caml:Name></caml:Committee>"?> LEAD_AUTHOR ASSEMBLY Gipson

An act to amend

Section of the Revenue and Taxation Code, relating to taxation. taxation Taxation: tax liability: collections. Under existing tax law, once a tax liability becomes due and payable, as defined, a statutory lien arises for that amount upon all real and personal property belonging to that taxpayer.

Existing law establishes a statute of limitations on collections of those liabilities to limit the collection period to years beginning from the date that the latest tax liability for a taxable year or the date any other liability that is not associated with a taxable year becomes due and payable, and thereafter extinguishes that liability.

Existing law defines “tax liability” as a liability imposed under the Personal Income Tax Law, the Corporation Tax Law, or the laws related to the administration of franchise and income tax laws, including any additions to tax, interest, penalties, fees, and any other amounts relating to the imposed liability. This bill would redefine “tax liability” to exclude interest, penalties, costs, or fees, except a specified fee on limited liability companies, relating to the assessment of tax, any other amounts relating to the imposed liability, and any additions to tax.

The bill would require the collection period for interest, penalties, costs, or fees that may accrue with a particular tax liability to lapse at the same time as the related tax liability. Existing law, the Earned Income Tax Credit Information Act, requires an employer, as defined, to notify all employees that they may be eligible for specified income tax filing assistance programs and state and federal antipoverty tax credits.

Pursuant to existing federal income tax law, the Internal Revenue Service allows taxpayers to complete and electronically file their federal taxes directly with the Internal Revenue Service using their free online tax tool called Direct File. </xhtml:p><xhtml:p>This bill, on and after January 1, 2026, would require employer notifications to all employees relating to specified income tax filing assistance programs to include information regarding Direct File.

The bill would also make conforming and nonsubstantive changes to the Earned Income Tax Credit Information Act.</xhtml:p>"?> MAJORITY NO YES NO NO NO NO NO NO NO NO The people of the State of California do enact as follows:

SECTION 1.

Section of the Revenue and Taxation Code is amended to read: 19255. (

a) Except as otherwise provided in subdivisions (

b) and (e), after years have lapsed from the date the latest tax liability for a taxable year or the date any other liability that is not associated with a taxable year becomes “due and payable” on the date prescribed by subdivision (

b) of

Section 19221, the Franchise Tax Board shall not collect that amount and the taxpayer’s liability to the state for that liability is abated by reason of lapse of time. Any actions taken by the Franchise Tax Board to collect an uncollectible liability shall be released, withdrawn, or otherwise terminated by the Franchise Tax Board, and no subsequent administrative or civil action shall be taken or brought to collect all or part of that uncollectible amount. Any amounts received in contravention of this

section shall be considered an overpayment that may be credited and refunded in accordance with

Article 1 (commencing with

Section 19301) of

Chapter 6. (

b) If a timely civil action filed pursuant to

Article of

Chapter of this

part is commenced, or a claim is filed in a probate action, the period for which the liability is collectable shall be extended and shall not expire until that liability, probate claim, or judgment against the taxpayer arising from that liability is satisfied or becomes unenforceable under the laws applicable to the enforcement of civil judgments. (

c) For purposes of this

section only, all of the following apply: (1) “Tax liability” means a liability due and payable under

Part 10 (commencing with

Section 17001),

Part 11 (commencing with

Section 23001), or this part. (2) “Tax liability” does not include interest, penalties, costs, or fees, excluding the limited liability company fee imposed pursuant to

Section 17942, relating to that assessment of tax. (2)</xhtml:p>"?>

(3) If more than one liability is “due and payable” for a particular taxable year, with the exception of a liability resulting from a penalty imposed under

Section 19777.5, the “due and payable” date that is later in time shall be the date upon which the 20-year limitation of subdivision (

a) commences.

(4) Notwithstanding the provisions of this section, the collection period for interest, penalties, costs, or fees that may accrue with a particular tax liability shall lapse at the same time as that of the related tax liability. (

d) This

section does not apply to amounts subject to collection by the Franchise Tax Board pursuant to

Article 5.5 or of this chapter, or any other amount that is not a tax imposed under Part or

Part 11, but which the Franchise Tax Board is collecting as though it were a final personal income tax delinquency. (e)

(1) The expiration of the period of limitation on collection under this

section shall be suspended for the following periods: (

A) The period during which the Franchise Tax Board is prohibited by reason of a bankruptcy case from collecting, plus six months thereafter. (

B) The period described under subdivision (

d) of

Section relating to installment payment agreements. (

C) The period during which collection is postponed by operation of law under

Section 18571, related to postponement by reason of service in a combat zone, or under

Section 18572, related to postponement by reason of presidentially declared disaster or terroristic or military action. (

D) During any other period during which collection of a tax is suspended, postponed, or extended by operation of law.

(2) A suspension of the period of limitation under this subdivision applies with respect to both parties of any liability that is joint and several. (

f) This

section shall be applied on and after July 1, 2006, to any liability “due and payable” before, on, or after that date. All matter omitted in this version of the bill appears in the bill as introduced in the Assembly, March 13, 2025. (JR11)