California news: recent tax meeting provides an array of information.

• Author: Williams, Len
• Position: CA Tax

Much of the material for this column came from a recent CalCPA Committee on Taxation meeting. One of the bits of information gleaned there was the existence of the Cal Taxlettler. published by the Taxpayers Association. It's not the same as Spidell's California Taxletter, but the two complement each other.

California Rental Losses Not Allowed

When faced with a tax rule that he or she thinks is irrational, unfair or both, a client frequently will say: "Let's fight it in court." That usually evaporates when the client is advised that going to court can involve a lot of money for legal fees--and he or she still may lose.

A taxpayer recently appealed California's lack of conformity with U.S IRC Sec. 469(c) (7), which provides a special exemption from application of the passive loss rules real estate professionals. Briefly, the taxpayer lost (Appeal of Hannon and Riddle. April 24, 2013, Cal. St. Bd. of Equal. Case No 613264. as reported in the Oct. 1 issue of Spidell's California Taxletter).

Fiduciary E-filing Coming in January

Adding fiduciaries to the California e-filing program will make it possible to e-file the following forms. as well as most other accompanying forms and schedules:

* Form 541: California Fiduciary Income Tax Return

* Schedule D (541) Capital Gain and Los

* Schedule J (541): Trust Allocation of an Accumulation Distribution (tax veterans will recall what a I war this is to do by hand.)

* Schedule K-1 (541): Alternative Minimum Tax and Credit Limitation--Fiduciaries

Fiduciaries are riot included in We individual e-lilt mandate at this time. The FTB will re-evaluate this fiduciary e-file program at the encl of 2014 for potential inclusion in the mandate beginning in January 2016.

Withholding Voluntary Compliance Program (WVCP)

Effective July 1, 2013. the FTB implemented the WVCP as an opportunity to become current on the withholding obligation.

If the withholding agent qualities. the FTB will:

* Waive information return penalties fou the required look-buck period;

* Eliminate withholding audits prior to the look-back period; and

* Limit the unpaid withholding liability to the look-bark period plus interest. For other rules. and how to apply, see FTB Form 4827, which is the application to be enrolled in the program.

Complaints About the FTB

According to a report made at the CalC1121 Committee on Taxation meeting, which was based on the materials from the FTB's Sept. 4, 2013, meeting, the time required to close docketed protests...