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 20 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.

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 20 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.

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.

CONCURRENCE IN SENATE AMENDMENTS

CSA2 Bill Id:AB 1519

Author:(Gipson)

As Amended Ver:April 28, 2026

Majority vote

SUMMARY

Original Committee of Reference: Revenue and Taxation

Redefines the term "tax liability" for purposes of the 20-year statute of limitations for Franchise Tax Board (FTB) collection activities.

Senate Amendments

Current Committee Recommendation: Concur in Senate Amendments

1. Delete the provisions of this bill related to employer notifications to employees.
2. Modify the definition of "tax liability" for purposes of the FTB's 20-year statute of limitations on collections to delete references to additions to tax, interest, penalties, fees and any other amounts relating to the imposed liability.
3. Provide that the term "tax liability" does not include interest, penalties, costs, or fees, excluding the limited liability company fee imposed pursuant to Revenue and Taxation Code (R&TC) Section 17942, relating to that assessment of tax.
4. Provide that 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.

COMMENTS

1. General background: For many years, no statute of limitations existed for the collection of an income or franchise tax delinquency. However, beginning in 2006, a statute of limitations on the FTB's collection actions went into effect with the enactment of R&TC Section 19255.

As a general rule, R&TC Section 19255 provides that after 20 years have passed 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", the FTB is prohibited from collecting that amount and the taxpayer's liability is abated. Any actions taken by the FTB to collect an uncollectible liability shall be released, withdrawn, or otherwise terminated; and no subsequent administrative or civil action may be taken to collect the uncollectable amount. Any amounts received in violation of this statute of limitations shall be considered an overpayment that may be credited and refunded to the taxpayer in accordance with existing law.

For purposes of these provisions, the term "tax liability" is defined as a liability imposed under the Personal Income Tax (PIT) Law, the Corporation Tax (CT) Law, or their administrative provisions. The term specifically includes any additions to tax, interest, penalties, fees, and any other amounts relating to the imposed liability. Moreover, if more than one liability is "due and payable" for a particular taxable year, generally the "due and payable" date that is later in time shall be considered the date upon which the 20-year limitation period begins.

1. So, what's the problem? According to attorney Joseph A. Broyles, who brought this issue to the author's attention:

Whenever the FTB files a tax lien, they assess a charge/fee for the filing of that tax lien. That charge/fee causes the 20-year "clock" to [be] restarted. This allows the FTB to restart the 20-year statute of limitations whenever it wants to by filing a lien or assessing some fee, cost, charge or penalty. If you read the statute literally, even interest charges cause the 20-year period to restart.

1. What would this bill do? This bill would redefine the term "tax liability" for purposes of the 20-year statute of limitations provisions. Specifically, the term would be redefined to mean a liability due and payable (rather than imposed) under the PIT Law, the CT Law, or the administrative provisions for those laws. Additionally, this bill would provide that the term "tax liability" does not include interest, penalties, costs, or fees relating to that assessment of tax.
2. A challenging statute: R&TC Section 19255, which this bill amends, can only be described as Kafkaesque in its complexity (and potential application). That section purports to provide a straightforward 20-year statute of limitations on FTB tax collections. However, the statute appears to start (and restart) the limitations period based on the "latest tax liability" for a taxable year. The statute defines a tax liability, in turn, to include "additions to tax, interest, penalties, fees and any other amounts relating to the imposed liability." Thus, critics contend that when FTB imposes a fee (e.g., for recording a lien), the fee acts to restart the 20-year limitations period for the entire liability. Based on a strict reading of the statute, even interest charges accruing on a tax liability would continually reset the statute of limitations, rendering it a nullity. At a certain point, it would be fairer to taxpayers and tax practitioners simply to eliminate the statute of limitations altogether rather than preserve the pretense. The author's aim is simple: once the underlying tax liability becomes due and payable, the limitations period begins to run – and subsequent fees and charges should not serve to "restart" it.

According to the Author

The author has provided the following statement in support of this bill:

In 2005, California enacted a 20-year statute of limitations for FTB collection actions, which is twice the length of the federal limitations period. California's statute of limitations, however, is not working as intended. Because current law defines a "tax liability" to include interest, penalties, fees, and other amounts related to the original liability, subsequent FTB collection actions, such as the recording of a lien, work to indefinitely extend the statute of limitations on the original liability. Statutes of limitations are designed to strike a balance between effective tax enforcement and the goal of ensuring taxpayers are not subject to indefinite government collections. AB 1519 reestablishes this balance by creating a workable and reasonable limitations period. By doing so, AB 1519 will provide certainty for both taxpayers and the FTB, while promoting confidence in our state's tax system.

Arguments in Support

Supporters of this bill note the following:

Under Section 19255, if there are multiple assessments for the same year, the 20-year limitations period begins to run from the date of the last assessment. Assessments include additional tax, penalties, interest and any FTB fees. The flaw in the statute is that it allows the FTB to unilaterally restart the 20-year clock by assessing any one of many collection fees, which it routinely assesses. Read literally, the statute provides that the daily compounding of interest restarts the 20-year clock; although, the FTB has not taken the position that the daily accrual of interest restarts the 20-year clock each day. The FTB does, however, take the position that every time it charges any one of its many collection fees, the 20-year clock is reset back to zero.

Allowing the FTB to unilaterally restart the 20-year clock at any time effectively nullifies the statute of limitations. This was clearly not the intent of the Legislature.

Arguments in Opposition

None on file

FISCAL COMMENTS

According to the Senate Committee on Appropriations:

FTB indicates that this bill would not change the way state income or franchise tax is calculated under current law, but estimates that the provisions of this bill could lead to roughly $100,000 of discharges in the first year after enactment, and minimal amounts annually thereafter (General Fund). FTB's administrative costs would be minor and absorbable.

VOTES

ASM REVENUE AND TAXATION: 7-0-0

YES: Gipson, Ta, Bains, DeMaio, Garcia, McKinnor, Quirk-Silva

ASSEMBLY FLOOR: 76-0-3

YES: Addis, Aguiar-Curry, Ahrens, Alanis, Alvarez, Arambula, Ávila Farías, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Caloza, Carrillo, Castillo, Chen, Connolly, Davies, DeMaio, Dixon, Elhawary, Ellis, Fong, Gabriel, Gallagher, Garcia, Gipson, Jeff Gonzalez, Mark González, Hadwick, Haney, Harabedian, Hart, Hoover, Irwin, Jackson, Kalra, Lackey, Lee, Lowenthal, Macedo, McKinnor, Muratsuchi, Nguyen, Ortega, Pacheco, Papan, Patel, Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Ransom, Celeste Rodriguez, Michelle Rodriguez, Rogers, Blanca Rubio, Schiavo, Schultz, Sharp-Collins, Solache, Soria, Stefani, Ta, Tangipa, Valencia, Wallis, Ward, Wicks, Wilson, Zbur, Rivas

ABS, ABST OR NV: Flora, Krell, Sanchez

SENATE FLOOR: 39-0-1

YES: Allen, Alvarado-Gil, Archuleta, Arreguín, Ashby, Becker, Blakespear, Cabaldon, Caballero, Cervantes, Choi, Cortese, Dahle, Durazo, Gonzalez, Grayson, Grove, Hurtado, Jones, Laird, Limón, McGuire, McNerney, Menjivar, Niello, Ochoa Bogh, Padilla, Pérez, Richardson, Rubio, Seyarto, Smallwood-Cuevas, Stern, Strickland, Umberg, Valladares, Wahab, Weber Pierson, Wiener

ABS, ABST OR NV: Reyes

ASM REVENUE AND TAXATION: 7-0-0

YES: Gipson, Sanchez, Carrillo, DeMaio, Mark González, Quirk-Silva, Michelle Rodriguez

UPDATED

VERSION: April 28, 2026

CONSULTANT: M. David Ruff / REV. & TAX. / (916) 319-2098 FN: 0004373

CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 1519

Author:(Gipson)

As Amended Ver:April 28, 2026

Majority vote

SUMMARY

Redefines the term "tax liability" for purposes of the 20-year statute of limitations for Franchise Tax Board (FTB) collection activities.

Senate Amendments

1. Delete the provisions of this bill related to employer notifications to employees.
2. Modify the definition of "tax liability" for purposes of the FTB's 20-year statute of limitations on collections to delete references to additions to tax, interest, penalties, fees and any other amounts relating to the imposed liability.
3. Provide that the term "tax liability" does not include interest, penalties, costs, or fees, excluding the limited liability company fee imposed pursuant to Revenue and Taxation Code (R&TC) Section 17942, relating to that assessment of tax.
4. Provide that 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.

COMMENTS

1. General background: For many years, no statute of limitations existed for the collection of an income or franchise tax delinquency. However, beginning in 2006, a statute of limitations on the FTB's collection actions went into effect with the enactment of R&TC Section 19255.

As a general rule, R&TC Section 19255 provides that after 20 years have passed 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", the FTB is prohibited from collecting that amount and the taxpayer's liability is abated. Any actions taken by the FTB to collect an uncollectible liability shall be released, withdrawn, or otherwise terminated; and no subsequent administrative or civil action may be taken to collect the uncollectable amount. Any amounts received in violation of this statute of limitations shall be considered an overpayment that may be credited and refunded to the taxpayer in accordance with existing law.

For purposes of these provisions, the term "tax liability" is defined as a liability imposed under the Personal Income Tax (PIT) Law, the Corporation Tax (CT) Law, or their administrative provisions. The term specifically includes any additions to tax, interest, penalties, fees, and any other amounts relating to the imposed liability. Moreover, if more than one liability is "due and payable" for a particular taxable year, generally the "due and payable" date that is later in time shall be considered the date upon which the 20-year limitation period begins.

1. So, what's the problem? According to attorney Joseph A. Broyles, who brought this issue to the author's attention:

Whenever the FTB files a tax lien, they assess a charge/fee for the filing of that tax lien. That charge/fee causes the 20-year "clock" to [be] restarted. This allows the FTB to restart the 20-year statute of limitations whenever it wants to by filing a lien or assessing some fee, cost, charge or penalty. If you read the statute literally, even interest charges cause the 20-year period to restart.

1. What would this bill do? This bill would redefine the term "tax liability" for purposes of the 20-year statute of limitations provisions. Specifically, the term would be redefined to mean a liability due and payable (rather than imposed) under the PIT Law, the CT Law, or the administrative provisions for those laws. Additionally, this bill would provide that the term "tax liability" does not include interest, penalties, costs, or fees relating to that assessment of tax.
2. A challenging statute: R&TC Section 19255, which this bill amends, can only be described as Kafkaesque in its complexity (and potential application). That section purports to provide a straightforward 20-year statute of limitations on FTB tax collections. However, the statute appears to start (and restart) the limitations period based on the "latest tax liability" for a taxable year. The statute defines a tax liability, in turn, to include "additions to tax, interest, penalties, fees and any other amounts relating to the imposed liability." Thus, critics contend that when FTB imposes a fee (e.g., for recording a lien), the fee acts to restart the 20-year limitations period for the entire liability. Based on a strict reading of the statute, even interest charges accruing on a tax liability would continually reset the statute of limitations, rendering it a nullity. At a certain point, it would be fairer to taxpayers and tax practitioners simply to eliminate the statute of limitations altogether rather than preserve the pretense. The author's aim is simple: once the underlying tax liability becomes due and payable, the limitations period begins to run – and subsequent fees and charges should not serve to "restart" it.

According to the Author

The author has provided the following statement in support of this bill:

In 2005, California enacted a 20-year statute of limitations for FTB collection actions, which is twice the length of the federal limitations period. California's statute of limitations, however, is not working as intended. Because current law defines a "tax liability" to include interest, penalties, fees, and other amounts related to the original liability, subsequent FTB collection actions, such as the recording of a lien, work to indefinitely extend the statute of limitations on the original liability. Statutes of limitations are designed to strike a balance between effective tax enforcement and the goal of ensuring taxpayers are not subject to indefinite government collections. AB 1519 reestablishes this balance by creating a workable and reasonable limitations period. By doing so, AB 1519 will provide certainty for both taxpayers and the FTB, while promoting confidence in our state's tax system.

Arguments in Support

Supporters of this bill note the following:

Under Section 19255, if there are multiple assessments for the same year, the 20-year limitations period begins to run from the date of the last assessment. Assessments include additional tax, penalties, interest and any FTB fees. The flaw in the statute is that it allows the FTB to unilaterally restart the 20-year clock by assessing any one of many collection fees, which it routinely assesses. Read literally, the statute provides that the daily compounding of interest restarts the 20-year clock; although, the FTB has not taken the position that the daily accrual of interest restarts the 20-year clock each day. The FTB does, however, take the position that every time it charges any one of its many collection fees, the 20-year clock is reset back to zero.

Allowing the FTB to unilaterally restart the 20-year clock at any time effectively nullifies the statute of limitations. This was clearly not the intent of the Legislature.

Arguments in Opposition

None on file

FISCAL COMMENTS

According to the Senate Committee on Appropriations:

FTB indicates that this bill would not change the way state income or franchise tax is calculated under current law, but estimates that the provisions of this bill could lead to roughly $100,000 of discharges in the first year after enactment, and minimal amounts annually thereafter (General Fund). FTB's administrative costs would be minor and absorbable.

VOTES:

ASM REVENUE AND TAXATION: 7-0-0

YES: Gipson, Ta, Bains, DeMaio, Garcia, McKinnor, Quirk-Silva

ASSEMBLY FLOOR: 76-0-3

YES: Addis, Aguiar-Curry, Ahrens, Alanis, Alvarez, Arambula, Ávila Farías, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Caloza, Carrillo, Castillo, Chen, Connolly, Davies, DeMaio, Dixon, Elhawary, Ellis, Fong, Gabriel, Gallagher, Garcia, Gipson, Jeff Gonzalez, Mark González, Hadwick, Haney, Harabedian, Hart, Hoover, Irwin, Jackson, Kalra, Lackey, Lee, Lowenthal, Macedo, McKinnor, Muratsuchi, Nguyen, Ortega, Pacheco, Papan, Patel, Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Ransom, Celeste Rodriguez, Michelle Rodriguez, Rogers, Blanca Rubio, Schiavo, Schultz, Sharp-Collins, Solache, Soria, Stefani, Ta, Tangipa, Valencia, Wallis, Ward, Wicks, Wilson, Zbur, Rivas

ABS, ABST OR NV: Flora, Krell, Sanchez

SENATE FLOOR: 39-0-1

YES: Allen, Alvarado-Gil, Archuleta, Arreguín, Ashby, Becker, Blakespear, Cabaldon, Caballero, Cervantes, Choi, Cortese, Dahle, Durazo, Gonzalez, Grayson, Grove, Hurtado, Jones, Laird, Limón, McGuire, McNerney, Menjivar, Niello, Ochoa Bogh, Padilla, Pérez, Richardson, Rubio, Seyarto, Smallwood-Cuevas, Stern, Strickland, Umberg, Valladares, Wahab, Weber Pierson, Wiener

ABS, ABST OR NV: Reyes

UPDATED

VERSION: April 28, 2026

CONSULTANT: M. David Ruff / REV. & TAX. / (916) 319-2098 FN: 0003845

 THIRD READING  

Bill No: AB 1519

Author: Gipson (D)

Amended: 4/28/26 in Senate

Vote: 21

SENATE REVENUE AND TAXATION COMMITTEE: 4-0, 6/24/26

AYES: McNerney, Ashby, Becker, Grayson

NO VOTE RECORDED: Alvarado-Gil

SENATE APPROPRIATIONS COMMITTEE: 7-0, 8/13/26

AYES: Cervantes, Seyarto, Cabaldon, Dahle, Grayson, Richardson, Wahab

ASSEMBLY FLOOR: 76-0, 4/28/25 (Consent) - See last page for vote

SUBJECT: Taxation: tax liability: collections

SOURCE: Author

DIGEST:

This bill redefines tax liability, for purposes of triggering the 20-year statute of limitations applicable to the Franchise Tax Board’s (FTB’s) collection of tax liabilities, to exclude interest, penalties, costs, or fees.

ANALYSIS:

Existing law:

1. States that every tax shall be conclusively presumed to have been paid after 30 years from the time it became a lien unless the property subject to the lien has been sold in the manner provided by the Legislature for the payment of the tax (California Constitution Article XIII, Section 30).
2. Provides that, once a tax liability becomes due and payable, as defined, a statutory lien arises for that amount upon all of the taxpayer’s real and personal property.
3. Establishes a 20-year statute of limitations on collections of those liabilities beginning from the last statutory lien date for each taxable year or the date any other liability that is not associated with a taxable year becomes due and payable.
4. 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. “Tax liability” includes any additions to tax, interest, penalties, fees, and any other amounts relating to the imposed liability.
5. Provides that if more than one liability is due and payable for a particular taxable year, the date upon which the 20-year limitation commences is the due and payable date that is later in time.

This bill:

1. Redefines tax liability, for purposes of triggering the 20-year statute of limitations applicable to the FTB’s collection of tax liabilities, to exclude interest, penalties, costs, or fees.
2. Specifies that the date that the tax liability was first assessed shall be the date upon which the 20-year limitation begins.
3. Provides that if more than one tax liability is “due and payable” for a particular taxable year, the 20-year limitation begins on the “due and payable” date that is later.
4. Makes additional technical and conforming changes.

Background

In 2005, the Legislature enacted AB 911 (Chu, Chapter 398, Statutes of 2005) to establish a 20-year statute of limitations on tax liability collections. However, because the definition of “tax liability” includes any additional fee, penalty, or interest added to an initially imposed tax liability, the result is that the statute of limitations is continuously reset, essentially nullifying the 20-year statute of limitations and intent of AB 911. This bill amends the current law to implement the original intent of AB 911 and establish a more definitive statute of limitations for the collection of tax liabilities.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No

According to the Senate Appropriations Committee, FTB indicates that this bill would not change the way state income or franchise tax is calculated under current law, but estimates that the provisions of this bill could lead to roughly $100,000 of discharges in the first year after enactment, and minimal amounts annually thereafter (General Fund). FTB’s administrative costs would be minor and absorbable.

SUPPORT: (Verified 8/14/26)

California Chamber of Commerce

California Lawyers Association, Taxation Section

California Society of Certified Public Accountants

California Society of Enrolled Agents

California Taxpayers Association

OPPOSITION: (Verified 8/14/26)

None received

ARGUMENTS IN SUPPORT:

According to the author, “In 2005, California enacted a 20-year statute of limitations for Franchise Tax Board (FTB) collection actions, which is twice the length of the federal limitations period. California’s statute of limitations, however, is not working as intended. Because current law defines a “tax liability” to include interest, penalties, fees, and other amounts related to the original liability, subsequent FTB collection actions, such as the recording of a lien, work to indefinitely extend the statute of limitations on the original liability. Statutes of limitations are designed to strike a balance between effective tax enforcement and the goal of ensuring taxpayers are not subject to indefinite government collections. AB 1519 reestablishes this balance by creating a workable and reasonable limitations period. By doing so, AB 1519 will provide certainty for both taxpayers and the FTB, while promoting confidence in our state's tax system.”

ASSEMBLY FLOOR: 76-0, 4/28/25

AYES: Addis, Aguiar-Curry, Ahrens, Alanis, Alvarez, Arambula, Ávila Farías, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Caloza, Carrillo, Castillo, Chen, Connolly, Davies, DeMaio, Dixon, Elhawary, Ellis, Fong, Gabriel, Gallagher, Garcia, Gipson, Jeff Gonzalez, Mark González, Hadwick, Haney, Harabedian, Hart, Hoover, Irwin, Jackson, Kalra, Lackey, Lee, Lowenthal, Macedo, McKinnor, Muratsuchi, Nguyen, Ortega, Pacheco, Papan, Patel, Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Ransom, Celeste Rodriguez, Michelle Rodriguez, Rogers, Blanca Rubio, Schiavo, Schultz, Sharp-Collins, Solache, Soria, Stefani, Ta, Tangipa, Valencia, Wallis, Ward, Wicks, Wilson, Zbur, Rivas

NO VOTE RECORDED: Flora, Krell, Sanchez

Prepared by: Haley Summers / REV. & TAX. / (916) 651-4117

8/15/26 12:48:29

**** END ****

SENATE COMMITTEE ON

Senator Sabrina Cervantes, Chair

2025 - 2026 Regular Session

AB 1519 (Gipson) - Taxation: tax liability: collections

Bill Summary:

AB 1519 would redefine tax liability, for purposes of triggering the 20-year statute of limitations applicable to the Franchise Tax Board’s (FTB’s) collection of tax liabilities, to exclude interest, penalties, costs, or fees.

Fiscal Impact:

FTB indicates that this bill would not change the way state income or franchise tax is calculated under current law, but estimates that the provisions of this bill could lead to roughly $100,000 of discharges in the first year after enactment, and minimal amounts annually thereafter (General Fund). FTB’s administrative costs would be minor and absorbable.

Background:

Under the California Constitution, state tax liens are conclusively presumed paid after 30 years unless the Legislature has authorized the sale of the subject property to satisfy the debt. Prior to 2006, state law did not establish a statute of limitations on the collection of delinquent state tax liabilities. Although statutory tax liens generally expired after 10 years, FTB could continue collection activities and extend the lien period under specified circumstances.

In 2005, the Legislature enacted AB 911 (Chu 2005), establishing a 20-year statute of limitations on FTB collection actions. Under AB 911, FTB must cease administrative and civil collection efforts 20 years after the date the latest tax liability becomes due and payable. The measure broadly defines "tax liability" to include the underlying tax as well as associated interest, penalties, fees, costs, and other related amounts. Because certain fees and other charges may accrue after the original liability, they can be treated as the latest tax liability, effectively restarting the 20-year collection period. As a result, the statute of limitations may be extended indefinitely, limiting the practical effect of the 20-year collection limit.

Proposed Law:

This bill, among other things, would do the following:

• Redefine tax liability, for purposes of triggering the 20-year statute of limitations applicable to the FTB’s collection of tax liabilities, to exclude interest, penalties, costs, or fees.
• Specify that the date that the tax liability was first assessed shall be the date upon which the 20-year limitation begins.
• Provide that if more than one tax liability is “due and payable” for a particular taxable year, the 20-year limitation begins on the "due and payable" date that is later.

Related Legislation:

• AB 911 (Chu, Chapter 398, Statutes of 2005) established a 20-year statute of limitations on tax liability collections.
• AB 357 (Nazarian, 2019) and AB 2369 (Nazarian, 2020) were identical to this bill. AB 2369 did not pass out of the Assembly by the constitutional deadline and AB 357 was vetoed by the Governor

-- END --

SENATE COMMITTEE ON REVENUE AND TAXATION

Senator Jerry McNerney, Chair

2025 - 2026 Regular

Taxation: tax liability: collections

Redefines tax liability, for purposes of triggering the 20-year statute of limitations applicable to the Franchise Tax Board’s (FTB’s) collection of tax liabilities, to exclude interest, penalties, costs, or fees.

Background

Tax collection. California Constitution Article XIII, Section 30 establishes a statute of limitations for state tax liens. Under this provision, any unpaid tax is conclusively presumed to have been paid after 30 years from the time it became a lien, unless the subject property has been sold by the Legislature to satisfy the debt. Prior to 2006, state law lacked a statute of limitations for the collection of delinquent taxpayer accounts. Generally, once a tax liability was due and payable, the Franchise Tax Board (FTB) could issue a statutory lien upon a taxpayer’s real and personal property for the amount due. While a statutory lien expired after 10 years, it was still enforceable even after the time had lapsed, and FTB could extend the 10-year limitation under a number of specified circumstances.

In 2005, the Legislature enacted AB 911 (Chu) to establish a 20-year statute of limitations on tax liability collections. In other words, after 20 years passed from the date the latest tax liability becomes due and payable, FTB must release, withdraw, or otherwise terminate any other action taken to collect the liability and cannot take any subsequent administrative or civil action to collect any outstanding amount of that tax liability.

Additionally, AB 911 defined the term “tax liability” as a liability imposed under the Personal Income Tax Law, the Corporate Tax Law, or any of the laws related to the administration of franchise and income tax laws. The term specifically includes any additions to tax, interest, penalties, fees, and any other amounts relating to the imposed liability. Further, if more than one liability is due and payable for a particular taxable year, then FTB must consider the later due and payable date upon which the 20-year limitation period begins. However, AB 911 treats the additional fee as the latest tax liability, thereby continuously restarting the 20-year statute of limitations every year. By including interest, penalties, costs, or fees as tax liabilities, AB 911 essentially nullifies the 20-year statute of limitations it was intended to implement.

The author would like to amend the current law to implement the original intent of AB 911 and establish a more definitive statute of limitations for the collection of tax liabilities.

Proposed Law

Assembly Bill 1519 redefines tax liability, for purposes of triggering the 20-year statute of limitations applicable to the FTB’s collection of tax liabilities, to exclude interest, penalties, costs, or fees. The bill also:

• Specifies that the date that the tax liability was first assessed shall be the date upon which the 20-year limitation begins.
• Provides that if more than one tax liability is “due and payable” for a particular taxable year, the 20-year limitation begins on the "due and payable" date that is later.
• Makes additional technical and conforming changes.

State Revenue Impact

According to FTB, AB 1519 would not change the way state income or franchise tax is calculated under the Revenue and Taxation Code. It is estimated that the provisions of this bill could lead to roughly $100,000 of discharges in the first year after enactment and minimal amounts annually thereafter.

Comments

1. Purpose of the bill. According to the author, “In 2005, California enacted a 20-year statute of limitations for Franchise Tax Board (FTB) collection actions, which is twice the length of the federal limitations period. California’s statute of limitations, however, is not working as intended. Because current law defines a “tax liability” to include interest, penalties, fees, and other amounts related to the original liability, subsequent FTB collection actions, such as the recording of a lien, work to indefinitely extend the statute of limitations on the original liability. Statutes of limitations are designed to strike a balance between effective tax enforcement and the goal of ensuring taxpayers are not subject to indefinite government collections. AB 1519 reestablishes this balance by creating a workable and reasonable limitations period. By doing so, AB 1519 will provide certainty for both taxpayers and the FTB, while promoting confidence in our state's tax system.”

2. Lost in translation. AB 911 intended to provide a straightforward 20-year statute of limitations on FTB tax collections. However, the statute appears to start (and restart) the limitations period based on the “latest tax liability” for a taxable year. The statute defines a tax liability, in turn, to include “additions to tax, interest, penalties, fees, and any other amounts relating to the imposed liability.” Some taxpayers contend that when FTB imposes a fee, the fee acts to restart the 20-year limitations period for the entire liability. Based on a strict reading of the statute, even interest charges accruing on a tax liability would continually reset the statute of limitations, rendering the 20-year limitation null. The author’s aim is simple: once the underlying tax liability becomes due and payable, the limitations period begins to run – and subsequent fees and charges continue to accrue, but should not serve to “restart” it. The purpose of a statute of limitations is to protect the defendant, for litigation of a long-dormant claim may result in more cruelty than justice. By redefining tax liability to exclude interest, penalties, costs, or fees, AB 911 provides a real and meaningful cutoff for FTB collections.

3. Gut and amend. As introduced in the Assembly, AB 1519 required employer notifications to employees regarding income tax filing assistance programs to include information regarding Direct File. On April 28, 2026, the author amended AB 1519 to delete those provisions and insert the current ones.

Assembly Actions

Not relevant to this version of the bill.

Support and Opposition

(6/18/2026)

Support: California Chamber of Commerce
California Lawyers Association, Taxation Section
California Society of Certified Public Accountants 
California Society of Enrolled Agents
California Taxpayers Association

Opposition: None received.

-- END --

Date of Hearing: April 21, 2025

ASSEMBLY COMMITTEE ON REVENUE AND TAXATION

Mike Gipson, Chair

ABPCA Bill Id:AB 1519 (

Author:Committee on Revenue and Taxation) – As Introduced Ver:March 13, 2025

Majority vote.

SUBJECT: Direct File: employment: notice

SUMMARY: Requires, on and after January 1, 2026, that employers notify their employees about the Direct File program offered by the Internal Revenue Service (IRS) as part of the existing notification requirement relating to tax filing assistance programs, the Earned Income Tax Credit (EITC), and the California Earned Income Tax Credit (CalEITC).

EXISTING FEDERAL LAW requires employers to notify their employees that they may be eligible for the EITC.

EXISTING STATE LAW establishes the Earned Income Tax Credit Information Act, which requires California employers to notify their employees, and certain state departments and agencies to notify their public assistance program recipients, of possible eligibility for Voluntary Income Tax Assistance (VITA) programs, CalFile, and state and federal antipoverty tax credits, including the federal EITC and CalEITC. (Revenue and Taxation Code (R&TC) Section 19853.)

FISCAL EFFECT: The Franchise Tax Board does not estimate any impacts to state revenues.

COMMENTS:

1. Committee Staff Comments:
   1. Direct File: In 2024, the IRS rolled out a federal pilot program, "Direct File", which allowed taxpayers to file their 2023 federal tax return online, for free and directly with the IRS. California partnered with the IRS during the pilot year, which allowed the Direct File tool to refer California taxpayers to the state's stand-alone electronic tax return filing system, CalFile, to file their California tax return. During the pilot program, Direct File had 44,000 California residents leverage the tool and file a federal return directly with the IRS. The IRS has indicated that it will make the Direct File program permanent starting with the 2025 tax filing season.
   2. CalFile: CalFile is the state's free, online program for taxpayers to complete and e-file their personal income tax returns directly with California. Currently, about 100,000 returns are filed annually using this free filing option. Taxpayers rely on information from their federal tax return to prepare their California tax return. Informing taxpayers about Direct File, a free federal tax filing option that would refer the taxpayer to California's CalFile program, is a comprehensive approach that would likely result in increased program participation.
   3. Employer notifications: California initially required employers to notify their employees about the federal EITC program by passing the Earned Income Tax Credit Information Act in 2007. In 2016, the notice requirement was expanded to include the CalEITC. In 2023, the notice requirement again expanded to include notification about the following items: VITA, specified state and federal antipoverty tax credits, and CalFile.
   4. VITA programs: The FTB and IRS offer a free program, VITA, to help individuals with their tax filing obligations. This program is run by volunteers who complete training with the FTB and IRS to learn to prepare basic returns for their community members. To qualify for VITA services, individuals must meet any of these qualifications:
      1. Make less than $58,000 (each VITA program can set specific income limitations);
      2. Have disabilities;
      3. Speak limited English; or,
      4. Are active duty or retired military personnel, or their dependent.
   5. Paid tax preparation services: According to the IRS National Taxpayer Advocate, over 54% of all individual income tax returns in 2023 were prepared by paid return preparers.^[1] The amount of time the American people spend recordkeeping, gathering tax materials, filling out their taxes, and other tax-related activities makes up approximately 71% of the entire Federal paperwork burden annually. On average, including all associated forms and schedules for non-business income, individual taxpayers spend approximately eight hours and $140 preparing their taxes each year.^[2] Among EITC claimants, unenrolled preparers accounted for roughly 75% of the tax returns filed.

While paid tax preparers play such a critical role in tax administration and compliance, unenrolled preparers – those generally not subject to IRS regulation – account for over one-half of all preparers. The National Taxpayer Advocate has written extensively on
the need to protect taxpayers from non-compliant return preparers.^[3] Unlike other regulated professions, there is no guarantee that an unenrolled tax return preparer has passed any exam, continues to engage in ongoing education, or meets any other minimum standard of competency to prepare federal tax returns.

The Government Accountability Office (GAO) confirmed that inaccuracies and errors made by unregulated prepares are pervasive by having its auditors pose as taxpayers visiting tax return preparation chains (which had a minimum of 10 locations). Only two out of the 19 randomly selected preparers calculated the correct amount of refund in a GAO study.^[4] In fact, this study found that only approximately 10% of preparers at large tax preparation chains correctly calculated tax refunds. These mistakes resulted in a range of errors, shortchanging taxpayers by as much as $52 and giving erroneously large refunds by as much as $3,718.

REGISTERED SUPPORT / OPPOSITION:

Support

Franchise Tax Board (Sponsor)

Opposition

None on file

Analysis Prepared by: Wesley Whitaker / REV. & TAX. / (916) 319-2098

1. Important considerations as you select your return preparer this filing season, IRS, National Taxpayer Advocate Blog (March 5, 2024). https://www.taxpayeradvocate.irs.gov/news/nta-blog/important-considerations-as-you-select-your-return-preparer-this-filing-season/2024/03/. ↑

2. IRS Report to Congress: Inflation Reduction Act §10301(1)(B), IRS (May 16, 2023). https://www.irs.gov/pub/irs-pdf/p5788.pdf. ↑

3. RETURN PREPARER OVERSIGHT: The IRS Lacks a Coordinated Approach to Its Oversight of Return Preparers and Does Not Analyze the Impact of Penalties Imposed on Preparers, IRS National Taxpayer Advocate. https://www.taxpayeradvocate.irs.gov/wp-content/uploads/2020/07/ARC18_Volume1_MSP_07_ReturnPreparer.pdf. ↑

4. Paid Tax Return Preparers: In a Limited Study, Preparers Made Significant Errors, GAO (April 8, 2014.) https://www.gao.gov/products/gao-14-467t. ↑