Executive summary Taxpayers’ Bill of Rights Annual Report to the Legislature

Nearly three years into the pandemic, what’s salient for me is how the staff here at the Franchise Tax Board (FTB), the nation’s second-largest tax agency, has risen to countless challenges and become a more nimble, adaptable, and resilient workforce. We juggled a host of critical functions for Californians this year, including: another successful Tax Day, with nearly 95 percent of personal returns e-filed; collecting three-quarters of California’s tax revenue; and, for the third time in two years, managing a multi-billion-dollar economic relief package to help millions of Californians.

FTB was hard at work this year administering the $9.5 billion Better for Families Act relief payment, publicly known as the Middle Class Tax Refund (MCTR), having just wrapped up managing two rounds of Golden State Stimulus (GSS) pandemic relief payments. We leveraged our GSS experience to ensure eligible Californians get the right MCTR payment amount, always balancing timeliness with our anti-fraud efforts.

Amid the ongoing pandemic, we also balanced the health and safety needs of employees and the public with our desire to serve taxpayers as quickly and effectively as possible. We offered taxpayers the ability to make in-person appointments to get tax help and make payments at five California field offices. And, we extended the e-Signature option through December 31, 2022, for taxpayers and their representatives to submit paper returns and other documents.

FTB continued to rely on alternative communication methods this year to interact with taxpayers for audit, claims, and protest programs, using virtual platforms to conduct new correspondence and field audits.

Looking ahead, FTB is on track with the second phase of its 30-year project to ensure operational excellence by modernizing its Information Technology (IT) systems. We call it “EDR2,” the Enterprise Data to Revenue project. Over the past year, staff have built a solid foundation that will allow us to replace aging audit, filing enforcement, and underpayment systems over the next few years. EDR2 will also provide new self-service options for taxpayers.

FTB also wants to better serve taxpayers in this incredibly diverse state with an enhanced commitment to diversity, equity, and inclusion, or DEI, in the workplace. Last year, our three-member governing Board adopted a resolution recognizing FTB’s commitment to DEI and, specifically, our volunteer DEI team, itself a microcosm of California, comprising department-wide staff. The team’s accomplishments include posting DEI-oriented articles and videos – including first-hand staff accounts – on a dedicated DEI page on FTB’s intranet. The more awareness we have of diversity, the better we can serve Californians and help resolve their tax issues. In addition, in response to Governor Newsom’s executive order directing state departments to take additional actions to embed equity analysis and considerations in their mission, policies and practices, we developed five organizational priorities for 2023 that focus specifically on embedding equity into our strategic initiatives. These initiatives include providing additional DEI-related training and education to our employees, expanding outreach and service to, as well as strengthening relationships with, underserved and marginalized communities, and seeking opportunities for employment and upward mobility to historically underrepresented groups.

FTB will continue to seek input from our stakeholders, especially tax professionals, as we tackle current challenges and prepare for those ahead.

With the above in mind, I humbly submit this year’s Taxpayers’ Bill of Rights Annual Report to the Legislature for your review. Thank you for your support as we work together to serve the great state of California.

Selvi Stanislaus

Executive Officer