Filing Season News Conference
February 6, 2007
Speaker: John Chiang, State Controller, Chair, Franchise Tax Board
My name is John Chiang. I am California's State Controller.
I wanted to first thank Selvi Stanislaus and the Franchise Tax Board for having us here this morning.
For those of you who don't know, the Franchise Tax Board was recently, and Selvi, was recently awarded with the Commissioner's award for their pioneering work on the tax gap. And so I think it's important in that light that we understand the new and engaging work of the Franchise Tax Board.
Now, the Franchise Tax Board wants to help California taxpayers. The Franchise Tax Board is offering customer services to have taxpayers take the headache and anxiety out of filing their taxes. There are 10 million words in the tax code. It's a very very difficult time for many, especially those who don't have the financial wherewithal to complete their taxes. We understand that not everyone can hire a tax professional or buy software to help with tax preparation. We want to help those with less get more in the way of free tax preparation.
Now that everybody has their W-2 forms, we have more than 1,800 volunteer income tax assistance centers and tax counseling sites statewide. These programs, these sites, and these volunteers will help low-income seniors, non-English speaking, and disabled individuals complete their tax returns.
Last year we had over 260,000 Californians get assistance in filing their taxes. VITA center volunteers can help with state and federal programs like the earned income tax credit and the child and dependent care expenses credit that can reduce taxes and provide savings for working families. Last year, very importantly, nearly 460,000 families who are struggling or of modest income, some of those who have transitioned off welfare did not file for the earned income tax credit.
This is a situation that urgently needs to be changed. These families missed out on $850 million in revenues, I mean in refunds, because they have a misconception or lack of understanding about those programs. That money is critical to individual and family well being, that money is critical to the state's economic well being, as we understand with the budget deficit that we have this year.
Now the credits can go up to a cap of $4,536, up from last year, for working families that earn less than $38,348. The average refund is $1,700.
Let me tell you, and share with you a quick story. A couple years ago, as a member of the Board of Equalization, my office was a VITA center, it was a VITA site. We filled out, we helped a couple hundred families each year fill out these forms. One young lady walked into our center, she cut hair during the day, and after getting assistance from my staff, we found out that she was entitled to $4,230 in EITC refunds. Now, her story is a little bit different than the old adage. She didn't use the money to put food on the table, she used the money to buy a kitchen table where they can have family meals. I thought that was illustrative of one of the great stories of how important the VITA program is to working families here in California.
This month, I will be working with members of Congress, state elected officials and community organizations to make sure that people understand that this free tax help is available.
Now, let me tell you that 9.7 million taxpayers, nearly two-thirds of those filing returns last season, received a state tax refund averaging more than $800. This year, taxpayers can request that their refunds be electronically deposited between two accounts. This is a very new and important development for those who are afraid of participating in the program because they could only deposit it in one account. These accounts include checking, savings, IRA, or Money Market accounts to help them with their finances. In addition, a new point, and an important point for this year, people will have two extra days to file. Both state and federal returns are not due until Tuesday, April 17.
Let me also highlight electronic filing: those who spend long nights trying to fill out their income taxes and are worried about getting to the Post Office don't have to do so -- we want to encourage people again to take advantage of our filing programs, including the CalFile program that is fast, free, and easy for 6 million taxpayers. To qualify for CalFile, you have to make 300,000, 301,000 or less, and then you can have some itemized deductions and some tax credits. But most importantly -- it is again free and easy to use.
The benefit of e-filing is that you get refunds faster -- seven days or less, or instead of waiting six to eight weeks to get your refund if you send your tax return hard-copy. It also means less paperwork, and that creates less confusion and less mistakes. Some of the top ten mistakes taxpayers have -- including those who file hard-copies or the schedules and making the mathematical errors.
To close the Franchise Tax Board provides 24-hour, automated phone service. Feel encouraged to call 800-338-0505. We also have some very talented professionals who can take live calls, and they can call our general toll-free line at 800-852-5711 from 7 a.m. to 6 p.m. on weekdays and on Saturdays from 8 a.m. to 5 p.m. We have walk-in service in Sacramento, Los Angeles, Oakland, San Diego, San Francisco, and Santa Ana. We also have these services in multiple languages, including Spanish, Chinese, Vietnamese, and Korean and then if you have additional need, please feel free to check our Website, which is www.ftb.ca.gov.
Thank you and I'll take questions.