Neufeld

Revenue and Taxation Code section 19714 (hereafter section 19714) provides in pertinent part: “Whenever it appears to the State Board of Equalization or any court of record of this state that proceedings before it under this part have been instituted or maintained by the taxpayer primarily for delay or that the taxpayer’s position in the proceedings is frivolous or groundless, or that the taxpayer unreasonably failed to pursue available administrative remedies, a penalty in an amount not in excess of five thousand dollars ($5,000) shall be imposed. . . .” We hold that it is not a violation of constitutional rights of free speech for the State Board of Equalization to impose a penalty pursuant to this statute.

BACKGROUND

Having determined that Joseph Leonard Neufeld received more than $111,000 in income, interest, and dividends he did not report, the California Franchise Tax Board (FTB) issued a proposed assessment of $12,558 in tax and penalties. Neufeld filed an administrative appeal against the FTB assessment with the State Board of Equalization (Board). He took the position that “the record lacks substantial evidence that I received taxable income” because the FTB…