Statement of Principles of Tax Administration
The Members of the Franchise Tax Board adopted these Principles of Tax Administration:
The primary function of the Franchise Tax Board is to administer the Revenue and Taxation Code. Tax policy for raising revenue is determined by elected officials.
It is our duty to correctly apply the laws enacted by the Legislature; to determine the reasonable meaning of various Code provisions, and to perform in a fair and impartial manner.
Interpretation of the Code is the heart of administration. It is the responsibility of each person in the Franchise Tax Board, charged with the duty of interpreting the law, to try to find the true meaning of the statutory provision and not to adopt a strained construction in the belief that he or she is "protecting the revenue." The revenue is properly protected only when the true meaning of the statute is ascertained and applied.
We must also apply the law in a reasonable and practical manner. Issues are raised when they have merit, and are never raised arbitrarily or for trading purposes. Employees are encouraged to raise meritorious issues. We also exercise care not to raise an issue or to ask a court to adopt a position inconsistent with an established Franchise Tax Board position.
We believe in treating our taxpayers with courtesy and considerateness. As such, administration should be reasonable, vigorous, and timely. It should never try to overreach, and should be reasonable within the bounds of law and sound administration. It should, however, be vigorous in requiring compliance with law and it should be relentless in its attack on unreal tax devices and fraud.
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