Taxpayers' Bill of Rights Hearing issues April 2018 Tax News
On December 7, 2017, the Advocate Office participates the annual Taxpayers’ Bill of Rights Hearing
One of the Advocates responsibilities is to prepare written responses to issues raised at the hearing by taxpayers and tax professionals. These responses are made available to the public for both current and prior years on the Taxpayers’ Rights Advocate page, Taxpayers' Bill of Rights Hearing Responses. This month, the Advocate wanted to highlight a few of the 2017 issues and responses that may be of interest to you.
For Power of Attorney (POA) representatives, copies of certain notices are not displayed in their MyFTB Folder
When a notice is sent from our collection system such as the Intent to Levy or a Final Notice Before Levy, the POA representative is not getting a copy of the notice in their MyFTB folder and therefore not getting an email that correspondence has been added to their clients’ account. This is due to system limitations, and we are working to identify viable solutions. It should be noted that wage garnishments and levies are not a notice to the taxpayer and do not appear in the MyFTB folder. The recipient of the garnishment or levy provides notification to their employee, taxpayer, and any other person listed on the account(s) that the recipient is withholding funds according to the order.
Every year, for a variety of reasons, a very small number of taxpayers will file a return with a refund in one year but the actual refund isn’t issued until the following year (e.g., a 2015 refund isn’t issued until 2017) which may complicate reporting the refund for federal income tax purposes. The volume of refunds filed in one year, but issued in the next is very small, with the percentage normally being less than 0.5 percent. However, for the 2015 process year it rose to 0.3 percent and in the 2016 process year it slightly declined to 0.2 percent. The temporary increase was attributable to the normal training and adoption of the new EDR system and the increase in potential identity theft.
We continuously improves our processes to reduce inadvertent impacts on taxpayers. As a result, for the 2017 process year, the percentage of refunds that potentially will be issued the following year is back to normal. To provide some context, we processed over 11.7 million 2016 tax year refund returns of which approximately only 6000 will be issued in 2018. This issue was also discussed in the March 2017 Tax News
Correct notices to accurately reflect the required payment method
We are clarifying the payment instructions on our notices to help taxpayers who are subject to the electronic funds transfer (EFT) requirements avoid mistakenly paying by check and being assessed a 1 percent penalty. We will be implementing these changes as soon as possible.
Additional issues and responses on our public website cover the new Office of Tax Appeals, Partnership Audit Changes, Swart Enterprises v. FTB, Filing Enforcement, the Voluntary Disclosure Program, Unclaimed Real Estate Withholding Credits and many more. I encourage you to visit our website and review the Taxpayers’ Bill of Rights issues raised and our responses to learn more about what we are doing to improve both our processes and our services to taxpayers and tax professionals.