TaxTipsLarge Corporate understatement penalty FAQs on amended returns and tax payments for the 2003-07 tax years is available at www.calcpa.org/content/25431.aspx.

The report explains:

* The new federal laws along with the effective dates and the corresponding California law, if any, including an explanation of any changes made in response to the new federal law;

* Citations to the section numbers of federal Public Law, the Internal Revenue Code and the California Revenue and Taxation Code impacted by the federal changes;

* The federal impact on the IRC that did not require a California response and a listing of expiring provisions in California law.

Missteps on Returns

The FTB is seeing an uptick in errors on California combined returns. Among them:

* Taxpayers are not responding to questions (B-3 and B-4) added to Side 1 of the California Form 100 and 100W, or the wrong information is being provided.

* Boxes A, B and C of Section A, Part 1 of Schedule R-7 are not being checked.

* California corporation numbers are missing.

Learn more about these issues and how to resolve them at www.calcpa.org/FTB_Errors.

American Recovery and Reinvestment Act of 2009 Tax Changes

The following are just a few tax-related provisions of the American Recovery and Reinvestment Act of 2009 that the IRS is implementing as quickly as possible:

* Up to $2,400 in unemployment benefits will be tax free in 2009.

* A new net operating loss tax provision for small businesses.

* Premium reductions and additional election opportunities for health benefits under COBRA. The ARRA provides offsets for COBRA coverage to employees who have been laid off between Sept. 1, 2008-Dec. 31, 2009.

* First-time homebuyers who purchase in 2009 can get a credit of up to $8,000 with no payback requirement.

* The Making Work Pay Tax Credit will mean $400 to $800 for many Americans. The IRS has issued new withholding tables for employers.

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Learn more at www.calcpa.org/TaxChanges.

Hot Issues at the IRS

The IRS Issue Management Resolution System is a place where tax practitioners can submit problems encountered. The latest issues posted include:

* CP 207/207L/276A Issued in Error

* American Recovery & Reinvestment Act (ARRA) of 2009 looking for information?

* Could the new law affect 2008 tax returns?

* Form 4868 Payment with Extension (payment by check or money order)

Learn more about these and other issues at www.calcpa.org/IMRS.

Estimated Payments Update

A new California estimate payment requirement is in effect that changes the percentage amount for estimated tax installment payments from four equal installments to 30 percent...