An act to amend Sections 19852, 19853, and 19854 of the Revenue and Taxation Code, relating to taxation. An act to amend Section 19255 of the Revenue and Taxation Code, relating to taxation.
Summary
AB 1519 makes two main changes to California tax administration law. First, it narrows the definition of “tax liability” for purposes of the Franchise Tax Board’s 20-year collection statute of limitations. Under the bill, interest, penalties, costs, and most fees would no longer be treated as part of the underlying tax liability for collection purposes, except for a specified limited liability company fee. The bill also provides that any interest, penalties, costs, or fees tied to a tax liability would expire at the same time as the related tax liability, rather than being treated separately.
Second, the bill updates employer notice requirements under the Earned Income Tax Credit Information Act. Beginning January 1, 2026, employers would have to include information about the IRS Direct File program in the notices they already provide to employees about tax filing assistance programs and antipoverty tax credits. The bill makes conforming and nonsubstantive changes to that notice law as well.
Impact
The bill would amend Revenue and Taxation Code Section 19255 governing Franchise Tax Board collection limits, changing how long the state may pursue certain tax-related amounts and clarifying that related interest and penalties expire with the underlying tax debt. It would also amend Sections 19852, 19853, and 19854 to require employer notices to mention IRS Direct File. In practical terms, the measure affects taxpayers with long-standing liabilities, the Franchise Tax Board’s collection practices, and employers that must distribute tax-credit and filing-assistance notices to employees.
Sentiment
The available voting history suggests the bill has been broadly supported and noncontroversial. It passed committee unanimously and later passed on the Assembly floor with no recorded opposition, including placement on the consent calendar. No committee transcript is available here, but the votes indicate strong agreement with both the tax-collection clarification and the Direct File notice update.
Contention
The bill’s main policy issue is the treatment of interest, penalties, costs, and fees in relation to the 20-year collection period. By excluding most of those amounts from the definition of tax liability while also tying their collection period to the underlying tax debt, the bill could affect how much the state can collect on older accounts and how the Franchise Tax Board administers long-dormant liabilities. Another possible point of interest is the employer notice expansion, though the voting record suggests little or no opposition to requiring employers to inform workers about Direct File and existing tax-filing assistance resources.