CA tax highlights: interest calculations, 'ask a legal expert' and more.

• Author: Williams, Leonard W.
• Position: CA Tax

Discussions focused on audit timeliness and accuracy, and claim for refund process.

The FTB held two audit and claims roundtable sessions earlier this year, one each in Northern and Southern California. The well attended events featured representatives from large accounting and law firms, corporate taxpayers and trade media.

The discussions focused on three areas: audit timeliness, audit accuracy and the claim for refund process.

The areas that mattered the most revolved around better communications and enhanced collaboration, as well as the time to process claims for refund. Attendees would like the refund process to be quicker, which is neither new nor a surprise. The late Hal McKinney, who served as chair of the CalCPA Committee on Taxation many years ago, once said the FTB could deposit and withdraw money from umpteen different banks electronically. However, from our point of view, it seems like requests for refunds are being processed by a 100-year-old person, working part time, in a corner, with a hand cranked adding machine.

FTB Reviewing Interest Calculations

The State Controller and FTB chair have directed the FTB to review and adjust interested calculations related to 1RS Rev. Rul. 99-40, 1999-2 CB 441; and Rev. Proc. 94-60, 1994-2 CB 774. These pertain to corporate netting, and not applicable to a large number of taxpayers. However, the FTB has information (www.ftb.ca.gov/current/interest_Adjustments_ April.shtml) about which taxpayers may be impacted by the adjustments, including example of the calculations involved.

Alphabet Soup

Beginning this summer, the FTB will change the name of the Return Information Notice (RIN) to the Notice of Tax Return Change (TRC). No matter what they call it, however, when clients phone, they will say: "I got a notice from the Franchise Tax Board. Did you receive a copy?" The answer will almost always be, "No." The taxpayer then will be told to either mail, scan and email, fax or drop it by. That'll be true no matter what they title the form.

Taxpayer Rights Advocate Priorities

As previously announced, Susan Maples, CPA is the FTB's new Taxpayer Advocate. She introduced herself to the FTB March 24 and said that her top priorities are protecting taxpayer rights and increasing outreach.

'Ask a Legal Expert' on FTB Website

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