Ca-ftb

[RLymanC]

What in the world are they doing in Sacramento?????

I have clients that have no reportable income and getting "NOTICE OF PROPOSSED ASSESMENT." Why? This will blow you away.

Mother and son live in jointly owned home. Mom's name on mortgage loan, son pays mortgage with his own money out of his bank account.

FTB gets a 1098 mortgage interest statement showing mortgage interest in her SS#.

Well the FTB say's she must be making around $35,000 a year to be able to pay this. She gets a proposed assesment showing $35,000 as income and $989.00 taxes due.

They are calling all money they think is income taxable.

Another client is enrolled in the adoption assitance program and cares for 3 severley disabled kids, you guessed it, FTB is calling the assitance amount taxable.

The rewards for living in a bankrupt state.

UPDATE: They seem to be targeting IRS Form 1098's with no tax return filed. FTB is muliplying the total mortage interest paid by 4 to come up with taxable income.

[joanmcq]

Calm down

Its just a way of the FTB looking for unreported income. All you have to do is show son pays. I got a new client from one of these. unmarried couple and the one that was 1st on the mortgage became disabled, and had no income so he didn't file. Just had to show the second on the mortgage was paying it.

If it was the local drug dealer who got popped this way would you be complaining?

[erchess]

I would be complaining if it were the drug dealer

I think it is time for sending out a notice that is in any way incorrect to cost the taxing agencies. I propose that on the one hand they be unable to collect more than they initially ask for. I propose that on the other hand if the taxpayer can cast reasonable doubt about one penny of what they ask for, then instead of the taxpayer paying the taxing agency pays some multiple of the asked for amount, or better, the taxpayer receives a willable and sellable exemption from taxation by that agency that is good for 75 years.

The reason I am this angry at the taxing agencies is that I help someone every year with a notice that is incorrect on its face. The last two were the same issue. Taxpayers had rolled over pension plans and this was being treated as investment income for EIC Purposes.. Until the agencies start firing people for doing such stupidity even once after their probationary period, I will want to punish them for every single mistake however small.

[ED SMITH]

The FTB has been doing this kind of shenanigans for years. The mortgage interest is only the latest twist.

If you have any kind of state license, such as real estate sales, barber, dentist, etc. about twenty categories, what they will do if someone fails to file a certain year, they will make a proposed assessment based on the average income for that profession.

I had an insurance salesman that received a proposed assessment of $55000 after he had retired.

It's one way they get non filers to file a return. Unfortunately a lot of other people that don't have to file get caught up in this. The remedy is either to prepare a return or send them a letter stating that there was no income for that year.

Their so called amnesty a few years ago was another travesty. It was not an amnest but anoffer to reduce by 20% the outstanding taxes if they were paid within one year. If you defaulted or did not participate in the amnesty you were charged extra penalties in addition to what was owed.

Since it applied to prior years the added penalties were IMO an unconstitutional ex-post facto regulation. As far as I know, no one has yet challenged it in court, although a lot of people have talked about it.

And as far as the state licenses previously mentioned, they can suspend them for non-payment of state taxes. This gives the FTB a tool of power that not even the IRS has. Talk about the power to tax being the power to destroy.

[S T]

Ftb

Yes Calif FTB is more than aggressive!

A lot of time expended by tax professionals to wait on the phone, submitting letters, faxing needed documentation, etc.

I guess that is our job security, that we most often do not charge for. What about the head of household notices that are issued every 2 years, I do my fair share of those!

Sandy

[ED SMITH]

Another penalty outrage the FTB perpetrates on late filers is to assess 25% on the assessed tax liability when a demand letter goes out. If a return is later filed or amended, the penalty still stands even if the taxpayer is due a REFUND.

At least the IRS abates any penalties when the return show a lesser liability or refund.