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State of California Franchise Tax Board

Tax News
Ask the Advocate – My Roles and Responsibility as Advocate

Steve Sims, Taxpayers' Rights Advocate.

The last quarter of each year brings about a considerable amount of administrative activity for my role as Taxpayers’ Rights’ Advocate. We hold annual meetings with California Society of Enrolled Agents, Certified Public Accounts, and the California Tax Education Council. I prepare an Annual Report to the Legislature, as well as, hold the Taxpayers’ Bill of Rights Hearing. I would like to take a moment to express my sincere appreciation, gratitude, and thanks to you, the practitioners and business owners, who took the time to communicate with me your concerns and issues surrounding the Franchise Tax Board’s administration of state income tax laws. I especially thank you for inviting me to present at your various chapter meetings and continuing professional education events. It is during these times that I gain true insight into many issues and challenges that taxpayers sometimes face.

In this issue, I thought I would take a moment to talk about my office, its creation, responsibilities, and just a little of how I work to advocate on taxpayers’ behalf. Let’s start with a little bit of history.

In 1988, the California Legislature enacted the Taxpayers’ Bill of Rights, which for the first time legislation spelled out California taxpayers’ rights and FTB’s obligations. This law codified many existing department procedures and established a Taxpayers’ Rights Advocate that reports directly to FTB’s Executive Officer. On July 30, 1996, the federal Taxpayers’ Bill of Rights 2 passed, followed a few months later by California Taxpayers’ Rights Conformity Legislation. A few years later, California lawmakers enacted the Taxpayers’ Bill of Rights Act of 1999 to further guarantee taxpayers’ rights.

The Taxpayers’ Rights Advocate has the discretionary authority to grant relief up to $7,500 from penalties, fees, or interest imposed on a taxpayer because of erroneous actions or inactions of the department for requests submitted through December 31, 2015.

Taxpayers’ Rights Advocate’s Office is responsible for a number of things. For example, we identify systemic problems and find solutions in a cooperative effort while protecting taxpayers’ rights and recognizing the goals of our audit, collection, and filing programs. We also report our findings to the legislature in the Annual Report to the Legislature by December 1 of each year. Probably most important to your clients and to you, we coordinate the resolution of taxpayer complaints and problems when they are unable to resolve them under the normal process, including complaints regarding unsatisfactory treatment of taxpayers by FTB employees. We promote integrity and responsibility so our taxpayers can rely on quality information and efficient service. As enacted by the Legislature in the R&TC, the Taxpayers’ Rights Advocate:

  • Coordinates the resolution of taxpayer complaints and problems including complaints regarding unsatisfactory treatment by FTB employees.
  • Develops and implements a taxpayer education and information program.
  • Identifies areas of recurrent taxpayer noncompliance.
  • Conducts an annual hearing where individual taxpayers and industry representatives may present proposals to clarify the California R&TC.
  • Makes recommendations to improve taxpayer compliance and uniform tax administration.
  • Informs taxpayers in simple, nontechnical language of procedures, remedies, and rights during audit, appeal, and collection proceedings.
  • Evaluates employees’ performance based on taxpayer contact and not on the revenue produced.
  • Possesses the discretionary authority to grant relief from penalties, fees, or interest imposed on a taxpayer because of erroneous actions or inactions of the department.

Taxpayers’ Rights Advocate’s office coordinates the education and outreach efforts throughout California, such as practitioner and Advisory Board meetings. We frequently participate in tax practitioner seminars, industry group workshops, and small business events by providing filing season updates and information to legislative offices. The Taxpayers’ Rights Advocate also conducts independent administrative review and administers the Interest Abatement and Third Party Fee Programs.

The explanation above gives a broad overview of the Taxpayers’ Rights Advocate’s Office responsibilities primarily as explained in the tax code. However, in an effort to clarify specific Advocate roles and responsibilities, I put together the following questions and answers to common questions.

Question

Answer

Does my office get involved the technical nature of an issue?

Yes

Does my staff review technical information as it relates to the issue?

Yes

Can my office overturn an Auditor’s decision to issue an assessment?

No, The Advocates Office cannot change the audit results on a case. We can get involved when the taxpayer questions department policy, procedure, or their belief that audit staff has not given them their due process in reviewing information essential to the case.

Can my office request a second review of a case from different Audit staff? (After all attempts to resolve the problem through normal channels).

Yes

Can my office remove a lien from a taxpayer’s account?

Yes

Can my office cancel or modify a wage garnishment?

Yes

While the Taxpayers’ Rights Advocate works on behalf of taxpayers, we ask that taxpayers and tax practitioners try to work through normal channels prior to contacting my office. However, this is not to say that you cannot contact the Taxpayers’ Rights Advocate in certain situations. These situations could be extremely time sensitive situations to correct or prevent an erroneous involuntary action from being taken by the department. It is also important to understand that while the Taxpayers’ Rights Advocate works to protect taxpayers’ rights, it is also the responsibility of the Advocate to protect the interest of the State of California. A taxpayer’s compliance or history of noncompliance can also factor into the resolution of certain issues. While we work to make sure that each taxpayer receives due process, there are situations where the taxpayer and FTB staff will not agree on the outcome of an Advocate review.

In closing, I again thank you for your concerns and feedback and ask that you continue to keep me dialed in on issues impacting taxpayers subject to California income tax.

Steve Sims, EA
Taxpayers' Rights Advocate

Follow me on Twitter at twitter.com/FTBAdvocate.

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