Franchise Tax Board (FTB) Hosts Virtual Stakeholder Meetings December 2021 Tax News

FTB hosted two legislative stakeholder meetings to gain input from the public

On Wednesday, November 17, 2021, FTB hosted two legislative stakeholder meetings to gain input from the public. FTB appreciates attendees taking the time to participate and share their thoughts.

Legislative Proposal (LP) Stakeholder Meeting

FTB hosted its annual LP Stakeholder Meeting virtually. Participants joined the meeting to submit or discuss their comments about the LP.

FTB presented the Installment Agreement (IA) Expansion LP, summarized here:

This proposal would make changes to the current IA authority to allow more taxpayers the right to enter into an IA with FTB if they meet specified requirements, and extends the time for full payment of an IA in certain situations.

Additional proposed changes would clarify when FTB is required to enter into an IA and also clarify when FTB may alter, modify, or terminate an IA under certain circumstances.

Next Steps for LP

The LP will be presented for approval at the next three-member FTB Board Meeting, scheduled December 2, 2021. If the FTB Board approves the LP, FTB will begin to look for legislative sponsors for the approved proposals.

FTB will also continue to seek authors for several prior board-approved proposals in the coming year.

Conformity Stakeholder Meeting Highlights

FTB hosted its Conformity Stakeholder Meeting to gain feedback and input on conformity topics. This year’s meeting was also held virtually. During the meeting, topics included a brief history of conformity and the annual report, Public Laws (PL) enacted in 2021 that amended the Internal Revenue Code (IRC), and the department’s updated Summary of Federal Income Tax Changes (SOFITC) report.

The report allows users to access an interactive version of the report by filtering SOFITC report years, in addition to providing search capabilities by the public law number, the Revenue and Taxation Code section, or other key words.

Revenue & Tax Citation section 19522 requires FTB to submit an annual report to outline IRC changes and the impact to California. Federal laws discussed during the conformity meeting included:

  • American Rescue Plan Act (ARPA) (PL 117-2)
  • Paycheck Protection Program Extension Act of 2021 (PL 117-6)

Following a demonstration of the new Conformity Report Tool, attendees participated in the conformity discussion. Although FTB does not advance conformity policy, it does annually provide a forum for a conformity discussion to gain stakeholder input with the goal of sharing this input with policy-making partners.

Several themes were mentioned, including a desire from attendees for additional federal/state conformity as a way to ease taxpayer compliance; as well as other items such as adding one-time penalty abatement similar to the federal procedure.

Next Steps for the SOFITC Report

FTB plans to release the SOFITC report for additional provisions by the March 15 due date, unless that date is extended further, and will continue to monitor developments at the state and federal level.

At the conclusion of both meetings, we provided the Legislative Services Bureau’s email address for stakeholders to contact us to provide additional comments.

The annual report can be found at Summary of Federal Income Tax Changes.