State Controller and Franchise Tax Board Chair Steve Westly recently reported that the state collected 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 enforcement 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 completed tax return or an explanation. Letter recipients were told to respond within 30 days or face increased penalties or fees.

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

The board will begin notifications for the 2005 tax-filing season later this year.