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Late CA State 1099-MISC Filling and Penalty Abatement

October 04, 2016 • Basheer Husami • Log In to Post Comments

Good day,

We have a client who files many 1099's each year. Years ago they began using the IRS's efile system, but were not aware that they needed to participate in the combined filling program or seperately efile on CA's SWIFT system. So essentially for every year the client efiled with the IRS they effectively didn't file with the state of CA. Obviously the right thing to do is to go back and file the prior year 1099's. The stated penalty is $50/late return. When I spoke with the FTB they explained that they can talk about the penalty abatement process until penalties have actually been assesed and it even sounded like there is a chance that no penalities will be assesed.

Has anyone had any experience filling late 1099's with the FTB and requesting abatement of the penalities?Can you give me any feed back on how the process went? I will recomend the client properly file the delinquent returns. However I would like to correctly set the clients expectations on the abatement process. On one hand it seems like they may not even have to go through the process on the other hand I could see the process of trying to abate many thousands of dollars of penalites with the FTB taking many years.  Any feed back would be greatly appreciated so I can set the clients expectations appropriately. Thanks in advance for your help!


I do not know if the FTB will assess penalties but my guess is that they will. If they do assess, it will be difficult to have them abated. The biggest problem I see is that the FTB may disallow the deductions if no 1099s were filed. I'm not sure what to tell you except to compute the penalties and let the client decide what to do.


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