Hi everyone,
I’d appreciate any input on a mistake I made when filing my 2024 California state return using TurboTax.
My wife is a sole proprietor, but I mistakenly included Form 568 when filing through TurboTax, which led the Franchise Tax Board (FTB) to treat her as a single-member LLC. We have confirmed that she is not registered as an LLC in California — her name and business do not appear in the Secretary of State’s BizFileOnline search tool.
We recently received a notice of balance due and penalties related to the erroneous LLC filing. On the letter it says additional paneities will be added if payment is not received after August 15th.
Based on my research and guidance I’ve received, here’s my current plan for correction:
File an amended California state return via TurboTax, removing Form 568 and correcting the filing to reflect sole proprietorship.
- Pay the requested amount shown in the notice now to avoid further interest and penalties while the amendment is pending.
- Create a MyFTB account at www.ftb.ca.gov/myftb/ .
Since TurboTax does not allow me to attach a letter of explanation with the amendment, I plan to upload a separate letter to the newly created MyFTB account explaining that Form 568 was filed in error, that no LLC exists, and requesting abatement of penalties and a refund of the $800 LLC tax and any associated charges. I will monitor the status from the MyFTB account.
Optionally, follow up with a phone call to the FTB in a few weeks to confirm receipt and check if a temporary hold can be placed on collection activity during review.
Does this sound like the right path? Has anyone had success getting a full refund (including penalties) in a similar situation?
Appreciate any thoughts or suggestions — thanks in advance!
