Quint: Adviser Check Instructions and Prior Notices Failed to Establish Reasonable Cause

Following a tax professional’s instruction to mail a check did not establish reasonable cause for this electronic-payment penalty. In Appeal of D. Quint, 2026-OTA-511, OTA Case No. 250923177 (Aug. 12, 2026), California’s Office of Tax Appeals sustained denial of a $29,350 refund. Prior notices and the kind of advice claimed were central to the result.

The opinion is nonprecedential. It was decided in August and appears in OTA’s October 2026 publication collection; October 29 is this article’s editorial publication date.

An earlier payment triggered later electronic-payment obligations

The taxpayer made a $155,000 payment on April 15, 2024. FTB sent a mandatory electronic-payment notice on May 10. A later October payment by check led to a $987.45 e-pay penalty for the 2023 tax year. The taxpayer paid that penalty on January 3, 2025.

On April 15, 2025, the taxpayer again paid by check, this time $2,935,000 for 2024. FTB assessed a one-percent penalty of $29,350, plus $45.06 interest. After paying the balance, the taxpayer sought a refund of the penalty. The claim relied on the tax professional’s instructions to use a check and asserted lack of awareness of the requirement. Quint, official opinion at 2.

The statutory exception required reasonable cause

Revenue and Taxation Code section 19011.5 triggers mandatory electronic payments for individuals after an estimated or extension payment exceeding $20,000 or an original-return tax liability exceeding $80,000. The subsequent-payment requirement and the available waiver or discontinuance provisions must be read together. A later payment’s smaller size alone does not determine whether the requirement ended.

For a covered non-electronic payment, section 19011.5(c) provides a one-percent penalty unless the failure was due to reasonable cause and not willful neglect. The OTA applied the ordinary-business-care-and-prudence standard discussed in Appeal of Porreca, 2018-OTA-095P. The question was what this taxpayer’s explanation and payment history established.

Advice on a tax question differed from instructions for paying

The OTA distinguished professional advice on a substantive tax-law question from instructions to perform a compliance act. Its authorities included United States v. Boyle, 469 U.S. 241, 251–252 (1985), and Appeal of Summit Hosting LLC, 2021-OTA-216P.

The taxpayer had not shown reliance on advice about whether a tax liability existed. The claimed instruction concerned sending a check. The OTA treated the electronic-payment requirement as unambiguous and concluded that delegating or following instructions for that act did not establish the reasonable cause asserted. Quint at 3.

The notice history weakened the claimed lack of awareness

FTB had sent both a mandatory e-pay notice and an earlier penalty notice. The 2023 and 2024 payment vouchers also warned that electronic payment might be required. The OTA reasoned that an ordinarily prudent person receiving those communications would have investigated the requirement.

It therefore sustained FTB’s refund denial. The result rests on the nature of the asserted advice and the documented warnings, rather than on the payment amount alone. Quint at 4.

Our practical guide addresses reviewing the advice and notice history for a reasonable-cause claim. The separate e-pay threshold guide explains the basic triggering and payment-record questions.