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Head of Household notification - 2006 tax year

PURPOSE OF BULLETIN

To inform staff that we will begin mailing the 2006 tax year Head of Household (HOH) Audit Letters in July 2007.

BACKGROUND

Each year we review the returns of taxpayers who claim the HOH filing status because the qualifications for this filing status are commonly misunderstood.  We anticipate mailing approximately 150,000 HOH audit letters for the 2006 tax year between July 2007, and December 2007.

HOH AUDIT LETTER

The audit letter provides information on:

  • Why we are reviewing their filing status information.
  • How to obtain assistance in completing the questionnaire.
  • How to return the completed questionnaire.
  • The qualification requirements for HOH.
  • Frequently asked questions about HOH.
  • How to obtain assistance with completing the questionnaire for Spanish-speaking taxpayers.

GENERAL INFORMATION

Taxpayers should complete the 2006 HOH Audit Letter and return it to FTB by the response due date on the letter.

HOH audit staff will:

  • Review completed questionnaires to determine if taxpayers qualify for the HOH filing status.
  • Call taxpayers or send follow-up letters if responses are incomplete or contain conflicting information.
  • Send an HOH Acceptance Letter to qualified taxpayers.
  • Send A Notice of Proposed Assessment disallowing the HOH for taxpayers who do not respond to the audit letter, or do not qualify for the HOH filing status based on their responses in the questionnaire. A failure to furnish information penalty will be assessed on all taxpayers who do not respond by the due date on the audit letter.

Note: Acceptance letters only apply to the specific tax year examined and do not qualify the taxpayer for any other tax year.

TAXPAYERS WHO E-FILED

Taxpayers who file electronically (e-file) and claim the head of household filing status have the option of completing and including an electronic HOH questionnaire (Schedule HOH/FTB 4803E) with their e-filed return. We will not send an HOH Audit Letter to taxpayers who submitted this information with their e-filed return. However, they may still receive a follow-up audit letter if the information they provided electronically was incomplete or conflicting. Please advise these taxpayers to complete and return the follow-up audit letter.

NEW THIS YEAR

Taxpayers with Internet access can answer the 2006 HOH Audit Letter at www.ftb.ca.gov

  • Access the HOH Web Response Application.
  • Click the HOH Webpage (taxpayers will need their social security number and FTB ID number, which is printed on the HOH Audit letter).

Taxpayers who use this application do not need to mail or fax their response to us.

MAILING SCHEDULE AND VOLUMES

The 2006 HOH audit letter mailings will begin July of 2007. We anticipate weekly mailings of approximately 10,000 letters to continue through December 2007.

TAXPAYER INQUIRIES

We cannot take the information over the telephone. Taxpayers must complete and return the audit letter questionnaire by the date specified on their audit letter. Taxpayers may:

  • Return the questionnaire to us by mail.
  • Fax the completed audit questionnaire to the fax number shown on the cover letter.
  • Respond by using the new HOH Web Response Application.

A list of frequently asked questions is attached to this bulletin. The same questions are also included with the audit letters we mail to the taxpayers.

Taxpayers can get more information about HOH or access the HOH Web Response Application by visiting our Web page at: /individuals/hoh/index.shtml

ADDITIONAL INFORMATION

Questions and Answers

Q: What if I need more space to answer the questions on the audit questionnaire?
A: If you need more space to answer any of the questions or to provide explanations for your answers, use a separate sheet of paper and include it with your response.
Q: Why do you want to know my marital status?
A: Your marital status is a factor in determining if you qualify for head of household filing status.
Q: Who is a qualifying person?
A: A qualifying person is a relative, including an eligible foster child, who can qualify you for the head of household filing status. To determine which relatives can qualify you for the status, see the Head of Household Qualification Requirements for 2006 on page 5 of the audit letter.
Q: I lived with my girlfriend and her child during the year. May I consider the child as my stepchild or foster child and claim the head of household filing status using the child as my qualifying person?
A: No. Because you were never married to the child’s parent, the child is not your stepchild, and the child cannot qualify you to use the head of household filing status. Beginning in 2005, only a child who is placed with you by an authorized placement agency or by judgment, decree, or another order of the court can qualify as your eligible foster child.
Your girlfriend's child cannot be your foster child and cannot qualify you for the head of household filing status. However, you may be eligible to claim a dependent exemption for the child if the child meets all the requirements. See California Head of Household Filing Status (FTB Pub. 1540) for more information on claiming a dependent exemption. To order FTB Pub. 1540 by telephone or to download FTB Pub. 1540, see our Head of Household Assistance Information on page 2 of the audit letter.
Q: Can I claim my parent as my qualifying person for the head of household filing status?
A: It depends. If you are married on the last day of the taxable year, you cannot claim your parent as your qualifying person, even if you did not live with your spouse during the last six months of the taxable year.
If you are single on the last day of the taxable year, you can claim your parent as your qualifying person if you are entitled to claim a dependent exemption for your parent and you meet all of the qualification requirements. Your parent must be a citizen, resident or national of the United States, or a resident of Mexico or Canada. Your parent need not live with you as long as you paid more than half the cost of keeping up the home that was your parent’s main home for the entire taxable year.
See California Head of Household Filing Status (FTB Pub. 1540) for more information. To order FTB Pub. 1540 by telephone or to download FTB Pub. 1540 see our Head of Household Assistance Information on page 2 of the audit letter.
Q: Can my child qualify both parents for the head of household filing status?
A: No. A child can qualify only one parent for the head of household filing status in a particular taxable year, and that parent must meet all the head of household requirements. See the Head of Household Qualification Requirements on page 5 of the audit letter.

 

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