My name is Christine Grab. I have 13 requests.
1. End the Policy of Withholding Estimated Tax Payments Made Via Credit Elects Until the Taxpayer Files a Return.
This policy violates R&TC 19363, which in simple English says that no matter what date you filed the previous year’s return, the credit elect payment must be applied on tax day, which is usually April 15th.
The FTB does not apply these payments in accordance with the law. Instead, the FTB puts the credit elect money into “suspense,” which is a fancy word for the general slush fund. The credit elect money does not get moved from the slush fund until the taxpayer files that year’s return. The FTB claims this policy is in line with federal practices, but that is a lie; the IRS does not withhold payments made via credit elects.
Demand Notices are only sent to taxpayers whom the FTB believes have underpaid their tax liability. The accompanying Demand Penalty is a crippling 25% of extra additional taxes beyond what the taxpayer actually owed.
By withholding the credit elect payment, it appears that the account was underfunded and thus a Demand Penalty is assessed. However, had the credit elect payment been applied in accordance with the law, the account would not have been underfunded and the Demand Penalties would not have been imposed.
Continue reading “Text of Speech I Made at the 2019 Annual Taxpayer Bill of Rights Meeting on December 3, 2019”