{seal} STATE OF CALIFORNIA [tabbed right]Notice Date: 3/8/2000
{seal} FRANCHISE TAX BOARD
{seal} Mail Stop F-200
{seal} PO BOX 942840
SACRAMENTO CA 94240-0040

[tabbed right] Accout [sic] No. [omitted]
[tabbed right] Tax Years: 1997
THOMAS THORNHILL III [tabbed right] SSN: [omitted]
PO BOX 1755 USPS
NEVADA CITY CA 95959

The documents that you submitted to us do not constitute a valid tax return as required by California Revenue and Taxation Code Section 18621. Revenue and Taxation Code Section 18501 requires that a valid tax return be filed by all those individuals meeting our minimum filing requirement. Your arguments and objections do not relieve you of your obligation to file valid returns.

A return is not considered filed until it can be processed. To be processed it must contain the taxpayer's name, address, identifying number, the required signature and sufficient information to permit the mathematical verification of tax liability shown on the form. This includes all income not specifically excludable by tax statute. Compensation received in whatever form, including wages for services, constitute taxable income. [Lonsdale v. Commissioner, 661 F.2d 71 (5th Cir. 1981)].

To alter the jurat or the space provided for the signature claiming that the document is filed under the penalty of perjury for a "return" is an attempt to retract or qualify the jurat. Such qualifications render the document invalid. (Sloan v. Commissioner, (7th Cir. 1995) 53 F 3d 799) and (Jenkins v Comm. TC Memo 1089-617 [TCM 692]). Thus when you altered the signature block area of the tax return, you invalidated the return.

This letter is a formal legal demand that you file the required tax return(s) pursuant to Revenue and Taxation Code Section 18501 within 30 days. If a balance is due, your payment should include all taxes, penalties, and interest. The enclosed FTB 1140 provides an explanation of penalties and interest.

If we do not receive a valid return for each year shown above within 30 days, the prior assessment will remain in effect.

The Revenue and Taxation Code provides for civil and criminal penalties for failure to file tax returns, and also a penalty of $500 for filing a frivolous return.

/s/[R L]
R. LUBIENS
Filing Compliance Bureau
Telephone: (916) 845-4068

Enclosure

FTB 4620 MEO (NEW 08-1999)