Resolving FTB notices
The Franchise Tax Board (FTB) sends notices from several different program areas. Understanding the notices and knowing how to respond is a critical part of reducing the clients exposure to follow-up notices and questions. We can consult on how to respond or work the issue directly with the FTB.
ftb filing enforcement program
The FTB has a very successful and ever expanding filing encforcement program. Notices are sent to taxpayers who have not filed a tax return but have been identified to have a California filing requirement.
Information from third parties and technological developments have increased the number of notices sent to business entities and individual taxpayers. While the FTB has stated the program is a success, there are instances when notices have been sent in error. We are available to assist in these instances.
Understanding FTB policies and procedures is essential to effectively manage your time and effort when working on issues with FTB staff. Steve Sims 32 years of experience working for the department, including seven years as the Taxpayers' Rights Advocate reporting directly to the Executive Officer, provides a considerable level of experience working with the following FTB divisions:
- Information Security
- Accounts Receivable
We can consult on how to effectively use the policies and procedures that are in place to resolve state income tax issues.
legislative advocacy consult
We are available to consult on new and existing legislation and ballot proposals that may impact California taxpayers.
During Steve's experience as the California Franchise Tax Boards Taxpayers' Rights Advocate, he worked to ensure taxpayers received "due process". He also worked to assure that FTB policies and procedures best represented the State of California and its taxpayers.
An FTB audit could last anywhere from six months to three years. This does not include time for different levels of appeals after the initial audit. In addition to the technical discussions on the deductibility of a certain issue, the client/tax professional should plan and strategize on how best to approach the audit. This becomes increasingly important as the length of the audit extends. We can consult at the various stages on how to work with the auditor, supervisor, or when to request a legal subject matter expert from FTB. Our objective is to consult in a way that minimizes the timeframe required to close the audit with the best possible result for the client. We are also available to attend meetings with FTB staff in person or by conference call.
The FTB has a very aggressive collection program that includes a considerable number of tools used to collect debt. While taxpayers are given an opportunity to resolve issues during the voluntary collection cycle, once the account goes into the involuntary stage of collection the FTB will enforce their collection program. If this happens, we can provide consultation on the following:
- Requesting a temporary stay on collections action
- Negotiate an installment agreement
- Request a lien release
- Recover attached funds (limited circumstances)
We have experience consulting on a number of topics and issues regarding California income tax. The following are some examples of subject matter:
- Statute of limitations
- Market based sourcing
- Alternative apportionment
- Closing agreements
- Offer in compromise
- Expert witness, etc...
Steve is a nationally recognized speaker on California income tax related issues and has provided training throughout the United States for the last twenty years. In addition, he is very knowledgeable of FTB policies and procedures.
Training classes are available for professional tax organizations and accounting/law firms who work with the FTB.
ftb filing programs
The FTB has the following filing programs available to taxpayers with a California income tax return filing or withholding requirement:
- Voluntary Disclosure Program
- Filing Compliance Agreement Program
- Withholding Voluntary Compliance Program
Participation in these programs can help taxpayers avoid penalties. In some instances, participation can limit the filing requirement look back period. We are available to consult on these programs.
penalty release waivers
Taxpayers can find themselves faced with a number of penalties in addition to the tax and interest associated with an assessment. Depending on the circumstances, certain penalties can be waived. Following are a few examples of penalties that we have successfully had waived:
- Failure to file a return/late filing penalty
- Underpayment of estimated tax
- Failure of partnerships to comply with filing requirements
- Withholding penalties
- Electronic payment request
withholding services issues
California requires tax withholding on the sale of real property located in the state and on compensation paid to nonresidents. The FTB has a Real Estate Withholding Program and a Nonresident Withholding Program with annual forms filing requirements. The FTB sends notices from both programs to determine if the correct amount of withholding has been received. In some cases, there are issues associated with the submission and crediting of the withholding to the correct taxpayers account. We are available to assist in working with both programs.
audit/appeal outcome assessment
We provide an independent review of a client's case issues including a review of the audit adjustments proposed by the FTB and a review of the tax return positions taken by either the taxpayer or the taxpayer's representative. The purpose of our review is to provide an independent analysis and opinion regarding the probability of success at each stage of the audit or appeals process. In addition, our review may include recommendations on how to modify positions to increase the likelihood of a successful outcome.
Based on our extensive experience and knowledge of the FTB, our findings can assist a client/taxpayer representative in their decision to continue through the appeals process or bypass certain stages of appeal. Our findings will focus on the best possible outcome for the client.