COT-FTB recap: top tax delinquents, BOE updates discussed.

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

CalCPA's Committee on Taxation held its annual liaison meeting with the FTB staff Oct. 20. There was an excellent update of the meeting at CalCPA's Annual Tax Planning and Update Nov. 23-24. Jim Counts' article in the December issue of California CPA covered some parts of the liaison meeting with FTB, but here are a couple of other bits of information not covered in his piece.

State's Top 500 Tax Delinquency List

This list actually has had an impact in getting one tax dawdler to shape up. This is a true story of a taxpayer who had been successful in stalling and breaking promises with respect to paying his California income taxes.

After much effort, the collection arm of FTB threw down the gauntlet and told this particular taxpayer, if he didn't pay up by a certain date, they'd put him on the list of the top 500 tax delinquents. Wow! That got action, and returns that had been sitting in his CPA's computer for a while suddenly got signed, filed and paid.

The FTB's November "Tax News" said that the total delinquencies of those on that list total $132.5 million. Pages 15-17 of that issue also contain the texts and FTB answers to three of the 18 questions submitted by CalCPA's COT to the FTB in October.

Reporting IRS Changes, Adjustments to the FTB

At the liaison meeting, it emerged that the IRS doesn't automatically notify the FTB of revisions or corrections. That came as a surprise for most in attendance. Nevertheless, most CPAs advise clients to notify the FTB of changes that the IRS has made because failure to do so extends the statue of limitations.

If the FTB isn't notified within six months after receiving the notice of the IRS change, then the FTB has four years after the IRS change--instead of the normal two--to issue a Notice of Proposed Assessment (NPA).

With the soon to be released My FTB Account, taxpayers will have the ability report their federal adjustments online.

California College Access Tax Credit Fund

Spidell's California Tax Letter has been emphasizing its analysis that contributions to that fund can bring a tax benefit of more than 90 percent of the amount contributed. The amount contributed is also a charitable deduction for federal income tax purposes. See the numerical example beginning at the bottom of Page 12 (November 2014 issue).

Swart Enterprises

A California Superior Court found that Swart Enterprises was not doing business in California by owning a small part of a California LLC in which it was not a managing...