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California General Assembly Passes Internal Revenue Code Conformity Bill

The California General Assembly has passed a bill that, if enacted, would update California's Internal Revenue Code (IRC) conformity date from January 1, 2005, to January 1, 2009, for taxable years beginning on or after January 1, 2010, for California personal income and corporation franchise and income taxes. By updating the conformity date, California would incorporate many, but not all, of the federal changes enacted by the following federal acts that amended IRC provisions followed by California:

-- the Energy Tax Incentives Act of 2005 (P.L. 109-58),

FTB Warns: When Paying for a Tax Preparer, Choose Wisely

Sacramento – Franchise Tax Board (FTB) today offered guidance to taxpayers who plan to hire a tax preparer for the 2009 filing season.

Taxpayers are cautioned to avoid tax preparers who:

* Claim they can get bigger refunds than other tax preparers.
* Delegate tax preparation work to someone with less experience or knowledge.
* Ask the taxpayer to sign a blank return, or sign a return in pencil.
* Base their fee on a percentage of the refund amount.
* Do not provide a copy of the tax return for the taxpayer’s records.

California Winter Storm Victims Get State Tax Relief from Franchise Tax Board

Sacramento – The Franchise Tax Board (FTB) today announced special tax relief for California taxpayers affected by the recent severe winter storms that started in January.

"California families who suffered property damage can find quick relief through their tax returns," said State Controller and FTB Chair John Chiang.

Camarillo Pilot Pleads Guilty to State Income Tax Evasion

Sacramento – A Camarillo pilot and businessman pleaded guilty to four counts of income tax evasion, the Franchise Tax Board (FTB) announced.

Charles Samuel Smith, 60, failed to file his 2000 - 2008 state income tax returns, did not report more than $1.8 million in income earned during these years, and owes more than $155,000 in personal income taxes.

Smith’s corporation, C&J T-28 Parts Sales, Inc. also failed to file state corporate returns for 2000 - 2008, did not report over $10 million in income, and owes more than $21,000 in unpaid corporate taxes.

California FTB's Mandatory E-Pay Penalty Will Not be Assessed in 2010

The California Franchise Tax Board (FTB) has announced that it will not impose the personal income tax e-pay penalty against taxpayers required to make their tax payments electronically. The FTB states that since the mandatory e-pay requirements were instituted in 2009, compliance has been increasing steadily. However, rather than imposing penalties now, the FTB will continue to focus its efforts on outreach and education so that taxpayers and their representatives can implement processes and procedures to comply with the law.

California FTB Individual Taxpayers Can Now Pay-By-Phone

The California Franchise Tax Board (FTB) has announced that personal income tax liabilities may now be paid by pay-by-phone. The pay-by-phone option is a new e-pay option provided by the state's electronic funds transfer (EFT) vendor and allows taxpayers to use the automated clearing house (ACH) debit method to instruct the state to electronically debit a taxpayer's bank account for a specific payment amount. Pay-by-phone cannot be used by group nonresident return/composite filers.

Hearing Set on Apportionment Regulation for Sales of Other Than Tangible Personal Property

A hearing has been scheduled for January 13, 2010, to review proposed amendments to the existing California corporation franchise and income tax regulation governing the apportionment formula's sales factor rules for sales of other than tangible personal property.

California --Corporate and Personal Income, Property Taxes: Disaster Relief Enacted for Losses From Southern California Wildfires

Legislation has been enacted to allow special corporation franchise and income, personal income, and property tax relief for losses sustained as a result of the wildfires that commenced in October or November 2008 in Los Angeles and Ventura Counties, November 2008 in Orange, Riverside, and San Bernardino Counties, and November 2008 or May 2009 in Santa Barbara County.

Income Tax Relief

California - Corporate, Personal Income Taxes: Governor Vetoes Conformity Legislation

California Gov. Arnold Schwarzenegger has vetoed A.B. 1580, which would have updated California's current Internal Revenue Code conformity date of January 1, 2005, to January 1, 2009, and incorporated many, but not all, of the federal amendments enacted during that period for state income and franchise tax purposes (see TAXDAY, 2009/09/14, S.4 and TAXDAY, 2009/09/09, S.3). In his veto message, the governor stated that he could not support the bill because of the provision that would partially conform to the federal penalty on erroneous refund claims that was inserted at the last minute.

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