Moving out of State?September 2021 Tax News

Do you have clients moving or working remotely from a new location? Update their address to avoid future headaches.

With so many changes this past year in real property values and the increase in remote work you may find that more of your clients are moving than in the past and will need to update their mailing address.

Every year a significant amount of returns will have changes made to them during processing. It is not uncommon for taxpayers to change their address or move after filing a return. Without an updated address on file with us, taxpayers may not be made aware of any changes or additional information that the Franchise Tax Board (FTB) needs to resolve an issue with the return or a payment.

Keeping the FTB informed of a new address could help your clients avoid some common occurrences that can quickly turn into unresolved issues, such as:

  • A requested direct deposit refund that due to a filing error must now be made by mail (paper check). Every year thousands of refunds are returned to the FTB due to a bad address
  • An adjustment to a tax return during processing which results in a notice of tax return change. Without a current address your client may not be able to resolve the issue which may then result in a balance due.

More serious consequences can occur for taxpayers who move out of state and do not inform FTB of their new address. If they do not receive a notice that is time sensitive, the notice can eventually result in an assessment of tax, resulting from:

  • An examination of a tax return that was filed before leaving the state (we have 4 years to audit a return)
  • A notice requesting a tax return based on income reported to the FTB which may result in a California non-resident filing requirement (there is no statute of limitations on an unfiled return)

Failing to respond to a notice can result in:

  • Additional penalties
  • Fees
  • Collection action

Addresses may be updated with the most recent return. Visit our How do I change my address? webpage for additional ways your client can update their address.