The California Franchise Tax Board has ripped me off, first by claiming that they never received my 2002 tax return, which I mailed in March of 2003 (well ahead of the 4/15 deadline!). Then they garnished funds from future tax returns to pay the "taxes owed" for that year, though they had already been paid through my payroll and I was actually owed a whole $2.00 refund for that year.
The same thing occurred again in 2006, however, this time I had filed electronically and had the control# for my return, thankfully and they agreed (unwillingly) to reverse any negative actions associated and correct their records. However, since I had mailed my 2002 return via the post office (e-file wasn't quite so easily accessed unless you went through H & R Block, etc.), I had no control number, thus no prove that I had mailed it.
Since then, they filed a tax lien (9/2010) which the subsequently released (9/2011) after many angry phone calls from me. The tax lien appears on my credit reports with all 3 agencies and FTB refuses to update the liens as having been filed in error.
In my line of work, unpaid taxes are regarded as a "moral turpitude" issue and the lien appearing on my credit report has been the cause of my denial of employment on more than a few occasions, even with an explanation of the issue.
I have come across many unfortunate souls along the way, whilst trying to resolve this issue, that are having similar problems with the FTB. There is no credible grievance process to submit a problem, aside of writing them and they refuse to admit to a mistake if there is no way to prove that you are right. They did not provide any form of confirmation of receipt in 2002 via postal mail, though most returns were submitted this way. That leaves the taxpayers word against theirs and they will always win, since they can profit from the situation by way of ridiculous penalties charged!
No tax advocate will bother with my situation since anything under $10,000.00 is not worth their time (mine was only $1317, which was actually not even owed since it was paid via payroll and they can't deny that they received those remittances).
There should be regulations in place to keep tax entities from ripping off taxpayers without leaving them any way to challenge them. That is too much power that is ripe for this kind of abuse! Where are our legislators when we need them?