Monroe: A Federal Tax Adjustment and a Separate Spousal-Relief Request

California’s Office of Tax Appeals sustained an additional-tax assessment based on a final federal determination when the taxpayer offered no supporting evidence that the adjustment was wrong. His assertion that a former spouse withdrew pension funds and was responsible under a court order did not establish relief: The order was not produced, and no formal innocent-spouse request was made. Monroe, slip op. at 2–4.

This nonprecedential opinion was issued July 22, 2026 and appears in OTA’s October 2026 publication batch. It is discussed here as an existing California administrative decision, not as a newly issued October 15 ruling. Its facts do not establish that another taxpayer is ineligible for spousal relief.

What Produced the Assessment

The taxpayer and his former spouse filed a joint 2018 California return. FTB later received information that the IRS had increased their federal adjusted gross income, principally for unreported pension or annuity income and nonemployee compensation. FTB generally followed the adjustments as applicable under California law and proposed $12,212 in additional tax plus interest. Id. at 1–2.

The state calculation was not a blind copy of every federal number. OTA noted that FTB excluded a $19 medical-savings distribution and included an early-withdrawal tax. That detail matters when evaluating a state notice: The questions include both the underlying federal determination and California’s treatment of the particular items. Id. at 2 nn.2–3.

The taxpayer protested that his former spouse took the pension funds without his knowledge and was responsible for the tax under a court order. FTB explained that the federal information did not show a canceled or reduced assessment, offered an audit hearing or an opportunity to request innocent-spouse relief, and later affirmed the proposed assessment when he did not respond. Id. at 2.

An Unsupported Explanation Did Not Rebut the Adjustment

OTA applied Revenue and Taxation Code section 18622(a): A taxpayer responding to a final federal determination must concede the federal changes or state where they are erroneous. An assessment based on a federal adjustment is presumed correct, and the taxpayer must supply credible, competent and relevant evidence of error. Unsupported assertions do not carry that burden. Id. at 2.

Here, FTB supplied federal wage-and-income transcripts and the joint account transcript. The taxpayer presented no argument or evidence identifying an error in the federal adjustments. OTA therefore addressed his pension-withdrawal explanation rather than inventing a substantive challenge he had not made. Id. at 2–3 & n.5.

This does not mean every federal adjustment automatically produces the same California result. A taxpayer still needs to identify the actual challenged item, the evidence of federal error or change, and any California-law difference. In this appeal, that evidence was absent.

Responsibility Between Former Spouses Was a Distinct Question

OTA explained that spouses who file jointly are generally jointly and severally liable under Revenue and Taxation Code section 19006(b). The opinion recognized that liability may be revised by a court in a dissolution proceeding under specified conditions, but the taxpayer supplied no evidence of the order he invoked. OTA had no record basis to revise his liability on that theory. Id. at 3.

The opinion separately discussed innocent-spouse relief under Revenue and Taxation Code section 18533. FTB had offered an opportunity to request it, and OTA’s procedure also allowed a request during the appeal. But the taxpayer did not make a formal request. OTA therefore could neither grant nor deny that relief in the appeal before it. Id.

The disposition was not a merits determination that this taxpayer failed every possible test for innocent-spouse relief. Nor does it turn an asserted divorce arrangement into a substitute for the applicable tax-relief process. The missing request and missing supporting order were central limits of the record.

What the Decision Resolves—and What It Does Not

OTA sustained FTB’s action because the taxpayer had not shown error in the federal-adjustment assessment. Id. at 4. As a nonprecedential opinion, Monroe is a factual illustration rather than a precedential rule binding every later OTA appeal.

A useful review file separates three issues: Whether the federal income adjustment is correct, whether California applied the adjustment correctly, and whether a properly presented spousal-relief ground changes the individual’s responsibility. Obtain the notices, federal account records, actual court order if one is relied upon, and the history of any relief request. Our guide to simultaneous IRS and FTB audits discusses the need to maintain separate state and federal tracks; our tax services page describes the firm’s practice.