The New Electricity Rate Scheme: Another Facet of Government Tracking

TLDR: I believe that the purpose of the new electricity rate scheme is to force everyone in California to file an income tax return. 

In California, people who make less than $12,550 if filing single or $25,100 if filing jointly are not required to file a tax return (unless you have a business license. In California, anyone with a business license of any type is required to file a tax return). 

Since 2017, I have been watching all of the Franchise Tax Board’s quarterly Board meetings. Over the years, FTB has frequently discussed how they can incentivize people to file returns when they are not required to do so. At first, I found it strange that the tax agency was so focused on people that they know don’t owe any money in taxes. But eventually I realized that the State of California uses tax returns as part of a data collection system to track and exploit people, and the State wants everyone enrolled in their system. 

This became crystal clear at the March 2022 meeting, in which Susan Maples, Director of the Economic and Statistical Research Bureau, gave an uber creepy presentation about how for the last decade, her department has been stalking low-income people who are not required to file. To get information on them, she partnered with “many community-based advocates as well as our peer state agencies.” She stated that she’d worked closely with the California Department of Social Services and the Department of Health Care Services, and focused on people enrolled in the CalFresh and MediCal programs. 

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Legislative Change Request #3 for 2023 — Repeal R&TC 19179(c)(2)

The legislative year starts at the beginning of September. From September to December, each legislator decides what they want to introduce for the next year. Below is a Legislative Request that I sent for the 2023 session.

November 29, 2022

Dear Governor Newsom Staff, GovOps Staff, Senate Governance and Finance Committee Members and Staff, Assembly Committee on Revenue and Taxation Members and Staff, and FTB Legislative Staff:

I request that you repeal Revenue and Tax Code 19179(c)(2) as this law is a violation of the California and US Constitutions. This law allows the Franchise Tax Board (FTB) to penalize a taxpayer $5,000 for exercising their right to Protest. This law directly violates R&TC Sections 21010 and 20102,  which guarantees the Right to Protest as a part of the California Taxpayer Bill of Rights. It is unconscionable that a law that allows the taxation agency to punish someone for exercising their rights was enacted in the first place. 

This issue goes beyond civil rights. The Franchise Tax Board sends notices threatening that the Taxpayer will be assessed a penalty of $5,000 if the Taxpayer does not withdraw his Protest or alter his return as preferred by the bureau. These coercive threats of penalty violate multiple federal criminal codes, including 18 USC §1512, Tampering with a witness; 18 USC §872 and §1951(b), Extortion; 18 USC §876 and §1341, Mailing threatening communications.

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Legislative Change Request #2 for 2023: Tax Agencies to Comply with Due Process Laws

The legislative year starts at the beginning of September. From September to December, each legislator decides what they want to introduce for the next year. Below is a Legislative Request that I sent for the 2023 session.

November 29, 2022

Dear Governor Newsom Staff, GovOps Staff, Senate Governance and Finance Committee Members and Staff, Assembly Committee on Revenue and Taxation Members and Staff, and FTB Legislative Staff:

I am writing to request that you enact a legislative change in the 2023 legislative cycle. 
In California, a creditor is required to prove to a judge that a debt is owed and get the judge’s authorization to implement a wage garnishment, bank levy or lien. The exception is the taxation agencies. I request that this loophole be closed, and that the taxation agencies be required to prove to an independent judge that a debt/penalty is actually owed prior to implementation of collection tools. 

The Franchise Tax Board has a proven track record of egregious procedural irregularities, including accounting irregularities and irregularities in the processing of Protests. These irregularities lead to the false imposition of wage garnishments, liens and levies (more details can be found in my other requests: Close the Married Loophole and Legislative Change Request #3 — Repeal R&TC 19179(c)(2)). Here is one example that I personally experienced:

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Legislative Change Request #1 for 2023: Close the Married Loophole

The legislative year starts at the beginning of September. From September to December, each legislator decides what they want to introduce for the next year. Below is a Legislative Request that I sent for the 2023 session.

November 29, 2022

Dear Governor Newsom Staff, GovOps Staff, Senate Governance and Finance Committee Members and Staff, Assembly Committee on Revenue and Taxation Members and Staff, and FTB Legislative Staff:

I request that you immediately change California State law to recognize married couples as one tax entity in accordance with the guidelines set forth by the IRS. 

The IRS treats married couples as a single taxpaying entity from the moment the couple notifies IRS of marriage until the couple notifies IRS that the marital status has changed. However, FTB considers all individuals as unmarried. Each year, after a married couple files that year’s return, FTB updates their internal records with proper marital status for only that particular year. I believe that: 

1. FTB utilizes this loophole in the system in order to falsely impose penalties and fees via policy and procedure violations

2 FTB utilizes this loophole to unlawfully enrich themselves by demanding extra additional tax liability and penalty payments above and beyond what FTB knows — by its own records — is actually owed. 

3. This policy violates the 14th Amendment of the Constitution 

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Second Legislative Change Request: Close the Married Loophole

Dear FTB Advocate, FTB Board of Directors, Governor Newsom, and Legislators:

I am requesting that legislators immediately change California State law to recognize married couples as one tax entity in accordance with the guidelines set forth by the IRS. 

The IRS treats married couples as a single taxpaying entity from the moment the couple notifies them of marriage until the couple notifies them that the marital status has changed.

However, FTB considers all individuals as unmarried. Each year, after a married couple files that year’s return, FTB updates their records with proper marital status for only that particular year. I believe that: 

1. FTB utilizes this loophole in the system in order to falsely impose penalties and fees via policy and procedure violations

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Now Is The Time To Contact Legislators About Any Laws You Want Passed!!!

The legislative year starts at the beginning of September. From September to December, each legislator decides what they want to introduce for the next year. September is really the month you want to try to get into your legislator’s faces about the bills you would like to see introduced so that they have time to consider it, draft the bill, refine it, etc. 

Bills are introduced in January. Between January and August, the bills are revised, voted on, revised some more, voted on again… The final vote is usually at the end of August, so if it didn’t pass by August, its done for the year. If it is a bill they feel strongly about, your legislator may choose to re-introduce it the next year. 

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PSA — Do You Have Any Ideas For New State Legislation? The 2021 Cycle Has Started — Now Is The Time To Talk To Your Legislators

In California, we each have two State Legislators that represent us on State matters — one is our State Senator and the other is our Assemblyman. If you don’t know who yours is, you can find them here

The legislative year starts the September prior to the calendar year (so they are working on 2021 now even though it’s still 2020). From September to December, each legislator decides what they want to introduce for the next year. September is really the month you want to try to get into your legislator’s faces about the bills you would like to see introduced so that they have time to consider it, draft the bill, refine it, etc. But it’s still not too late!

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FTB is Accepting Comments From Public About Proposed Changes to R&TC 19133 and Title 18, California Code of Regulations, section 23663-1, as well as the potential adoption of Title 18 section 23663-6, relating to Assignment of Credits

I have nothing to say regarding Title 18, but I have a lot to say about Revenue and Tax Code 19133! I have requested two major changes to the law. You can read my requests in their entirety here, but here are the highlights:

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Summary of FTB Crimes and Update on My Efforts To Stop Them

Summary: I have been trying to get the Franchise Tax Board to end some blatantly illegal business practices. The basics are: 

1. The FTB is illegally putting your estimated tax payments into a general slush fund instead of into your account. The money isn’t put into your account until you file your return for that year; basically, the State of CA is temporarily embezzling your money. If you file late, they harass you for payments that would not be owed/impose penalties that would not have been assessed had the money been applied to your account in accordance with the law.  

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