FTB fixes computer glitch that released erroneous refunds

The FTB has acknowledged that they have a computer glitch that they fixed on April 21, 2008, that was causing small but erroneous refunds to be released to an unknown number of taxpayers. First, the FTB released erroneous refunds to taxpayers whose returns showed a small penalty amount (tax software programs automatically calculate penalties). The amount of the refund equaled the amount of the penalty, according to the FTB. Second, the FTB released erroneous refunds to taxpayers whose returns showed a small balance due, but the taxpayer paid it subsequent to filing the return (as often happens with e-filed returns). It didn’t matter if the taxpayer made the payment by check, credit card or Web pay. If the payment was made after the return was processed, the FTB released a refund, which equaled the amount of the balance due.

The refund checks under both situations did not contain an explanation.

Taxpayers who have not cashed their erroneous state refund checks can return the funds to the FTB within 15 days at: 

Franchise Tax Board
PO Box 942840
Sacramento, CA 94240-0040

Taxpayers who have cashed their erroneous refund checks can return the funds either by using the FTB’s Web Pay at www.ftb.ca.gov or by mailing a check to the FTB at:

Franchise Tax Board
PO Box 942867
Sacramento CA 94267-0001

Editor’s note: It is unlikely that the FTB will pursue any collections action on a taxpayer who received one of these small, erroneous refunds.

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