CA Proposition 39-Out of State preparers doing CA taxes

[ATSMAN]

Too Cumbersome

I think CA will adopt a policy similar to NY that if you prepare 10 or more CA returns and you are a non resident tax preparer you have to register and pay a fee.

It is going to be very difficult to actually charge a state income tax to a non resident preparer who does all business by mail or e-mail. Can you imagine the administrative nightmare for CA if they start going after all non resident taxpreparers even if they prepare just 1 CA return. How do you breakdown the fee between CA and Fed return? What is the formula?

Lot's of unanswered questions?

[Uncle Sam]

CA Proposition 39

How can CA possibly track this?

I have a NY resident whose ONLY relation to California is an interest in rental property that he never visits because he has
a CA resident partner managing the property.

I also have an IN resident who owns not even a 1% interest in a California limited partnership - never steps foot in CA.
That partnership shows passive losses each year.

California plans to now tax me on the tax prep fee for those CA returns? I don't break down my bill by state.

[AZ-Tax]

Rental in CA but residence in AZ

I have a client with a rental in CA but clients residence is AZ. Based on past clients, the only time I had to file a CA return with a CA address is when someone relocated to AZ in the tax year. I would think this new law may help CA preparer's. Got to had it to CA for thinking of new ways to generate revenue. This morning I read an article that NY is going to suspend driver licenses of NY licensed drivers that owe more then $10K in NY state income tax.

[JohnH]

Thanks Harlan.
I replied to the email.
Appreciate the help

[ChEAr$]

John, see separate email for name.

[JohnH]

I'd be interested in knowing about this as well if anyone can enlighten us.
This might cause me to have a referral for my one CA client.
Anyone on this forum located near Walnut Creek, CA?

[DMICPA]

I recently read that CA will subject out of state tax preparers that prepare CA tax returns or do any service for a CA address. Even thinking about a client in CA could cause the Franchise Tax Board to tax you no matter where you are located.

If a preparer lives in Nebraska for example and prepares tax returns or does any service for the client with a CA address, CA will tax that income even though the preparer never set foot in CA. The CA Franchise Tax Board has determined that the CA client received a "benefit" in CA and therefore, the preparer is taxable. CA no longer allows the three factor allocation (Sales, Payroll, Location) and just uses the sales factor.

I am certain that many of us have a few CA clients and this could trigger a bill from the Franchise Tax Board.

Does anyone have further information on this??

Bob