The state of CA took $5,000 out of MY bank account for state taxes for 2002 we never owed?

for one thing once you are a Calif resident it is not an automatic process that makes you a non citizen when you move, Calif. holds onto residents as long as they can and especially when you keep a B of A account, this keeps 'ties' to Calif. which Calif. deems as keeping residency
If you filed your tax return with a Calif. address Calif has no choice but to accept that your residency has not changed
you had self employment in Calif. as well and unless you file a PA tax return and a NR for Calif. you remained a Calif. resident and Calif. wants income from all sources claimed on their tax return
and never, never, ignore notices from IRS or a state, this is bad news
a company whose main office is in one state and has employees in other states usually withholds state taxes for the state the employee is working in, they have to report to that state the wages that are delegated to that state, there are different employee tax rates as well as unemployment rates specific to that state
it would appear that his employment in PA had income taxes withheld there and your husband would have filed a tax return in that state to account for his taxable income
there is a Tax Advocate office in Calif. you might contact to see if they can help you

I'm with your husband. Pay the bill and get on with your life. The tax portion, $2300, once paid can be an itemized deduction on your federal tax return in the year paid. The penalties and interest are not.

The time to nail everything down was 10 years ago.

Even if you had all records, the first question California would want to know is exactly how long you and your daughter stayed in the house in San Jose. If that was through December, California is going to say that you were still domiciled there. If your husband could show (and without records, he can't) that he was in PA for 546 consecutive days (18 months and consecutive means he would need to be there every day so trips home would blow it), he would have shown that his residency changed. That would then make him a non-resident of California for the period in question even if he was still domiciled there. The probem is that he didn't create a paper trail. The W-2 points to CA. He didn't use the PA apartment address, but used the San Jose address. Until you moved, there's no proof the residency changed at all. You can't even prove that the move to PA was a permanent move at the time he transferred since you don't have copies of work contracts either.

Did you at least copies of your PA tax records? When CA forcibly changed your return to a full year return, you could have at least send in an amended return to argue for a tax credit for the money paid to PA. This would have reduced the amount owed and a pro rata portion of the interest and penalties.
(I'm guessing that CA taxes are higher than PA's.) You need your copies because chances are, PA got rid of their records after 7 years too.

Ignoring the tax board's letters was the dumbest possible thing to do.

All you ever had to do was provbe you didn't owe the money, whcih according to you shoudl have been easy.

FTB thinks you owed it a jumped through all the proper hoops before billing you. Based on your narrative, you should have filed a part year California return. You can go back and fix it and ge an adjustment to the bill and probably get a refund.
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