State Controller and Franchise Tax Board Chair Steve Westly re- cently reported that the state col- lected a record $524 million from people who earned income in 2004 but didn't file California tax returns. This year's efforts brought in $53 million more than a similar program last year. "Honest taxpayers shouldn't

subsidize those who are cheating the system," Westly said. "Our efforts help bridge California's budget gap by bringing people who don't pay their fair share back into the fold."

The tax board's annual en- forcement program identified roughly 800,000 individuals who earned California income but didn't file state income tax returns. Early this year, the board sent notification letters to nonfilers requesting either a com- pleted tax return or an explana- tion.

Letter recipients were told to respond within 30 days or face in- creased penalties or fees.

The enforcement program uses an integrated system that uti- lizes information resources and income data to identify individu- als that should have filed returns but didn't. According to the tax board, the majority of people con- tacted through their programs will voluntarily comply with the state tax laws in future years.

The board will begin notifica- tions for the 2005 tax-filing sea- son later this year.