This year’s Franchise Tax Board Annual Taxpayers Bill of Rights Meeting was held online on Thursday, December 2, 2021. Here is the five-minute speech that I made.
FTB prefers, but does not require, that you submit the requests in writing prior to the meeting so they know what to expect. There is no limit to how long a written submission can be, so my written submission was much longer and more detailed than the speech was.
Written Version of the ATBOR Requests
November 30, 2021
Franchise Tax Board Taxpayer Advocate Office
Email: FTBAdvocate@ftb.ca.gov.
Fax: (916) 843-8330
Re: Ten (10) Requests for Annual Taxpayer Bill of Rights Meeting
Hello Taxpayer Advocate Staff:
Here are my ten (10) requests for the 2021 Annual Taxpayer Bill of Rights Meeting.
- Close the Loophole That Allows FTB To Evade Due Process for Implementation of Collection Tools
Require that FTB appear before a Superior Court judge to procure a proper judgment in accordance with the laws of the State of California prior to implementation of Collection tools, including wage garnishments, levies and liens. Please see email dated October 23, 2021 for details.
2. Conform To IRS Guidelines by Considering Married Couples As One Tax Entity
The IRS treats married couples as one tax paying entity from the moment the couple notifies them of marriage until the couple notifies them that the marital status has changed. FTB does not follow this precedent. FTB readily admits it treats married people differently than single people, in a manner which penalizes them for being married. This is a violation of the 14th Amendment of the US Constitution. California law should be immediately changed to conform with federal guidelines. See email dated November 26, 2021 for details.
3. Disclosure of Protocols Regarding Withheld Payments
One of FTB’s Foundational Principals is “Operate with transparency to maintain public trust and confidence.” As such, I am requesting that FTB provide full public disclosure of FTB’s policies, procedures and protocols surrounding withheld payments. Information should include:
- FTB has already disclosed that credit elect payments and estimated tax payments made by married couples are withheld until that year’s return is filed. From the records submitted by FTB to the court, it appears that many other payments are withheld, too. Please provide an exhaustive list of every type of payment that is not applied to the taxpayers account immediately upon receipt by FTB, how long that type of payment is withheld, and the tax code that is used to justify each of the types of payments withheld.
- Please provide FTB’s official definition of the word “timely.”
- If a payment is made in full by the prescribed due date but withheld by FTB per FTB’s above withholding practices, is that payment considered “timely” by FTB? If this payment is not considered timely, please provide the legal code that is used to justify this practice.
- Please disclose the procedures for moving the withheld funds into the taxpayers account at the appropriate time. For example, FTB received the hard copy of my 2011 tax returns on 03-06-2014. Per FTB’s policy of withholding payments made via credit elect and married couples until the day the return is filed, our two withheld payments for tax year 2011 should have been removed from suspense and applied to our account on 03-06-2014. Who is the person responsible for moving the funds? Is it the person who opens the mail? If not, is there a system in place to ensure that the person who opens the mail gets the return to the person whose job it is to move the funds?
- Please specify exactly when these withheld payments are counted in the revenue totals for the State of California for that year. Are they counted as revenue as soon as FTB receives the monies? Or are they counted as revenue when the payments have been applied to the taxpayer’s account? Or are they counted as revenue at another point in time? If it is a different point in time, please provide the calculation for which date that type of payment is classified as revenue. If different types of payments are counted as revenue on different dates, please clarify which types of payments are applied on which dates.
- Who is the custodian of the suspense accounts in which the withheld payments are placed for the interim? Is it a department within FTB, or are the funds held by another agency, such as the Department of Finance?
- Are there provisions in the protocols which allow for any type of spending, borrowing or other utilization of the funds in the suspense account for any purpose, whether routinely or sporadically?
- If spending, borrowing or other utilization of the funds is authorized by the protocols, whether routinely or sporadically, what are the guidelines under which the money can be utilized? Who is authorized to make these expenditures?
4. Disclosure of All Payments Which Are Immediately Applied
Please provide an exhaustive list of all types of payments that are applied to the taxpayers account immediately upon receipt of the funds from the taxpayer/on behalf of the taxpayer.
5. Disclosure of Guidelines Used for Calculating Interest
As FTB disclosed in the records submitted in my court case, for the purpose of calculating interest, FTB only recognizes some of the payments that had been made and only portions of other payments that had been made. Please provide the criteria and guidelines utilized for determining which payments and portions of payments are withheld from/applied to the totals of payments collected by FTB for the purpose of calculating interest.
6. End Practice of Extortion and Coercion to Waive Right to Protest
In my case, all of the Protests that I sent in response to Notices of Proposed Assessments were “misclassified” as responses to different notices, and thus my right to Protest was unlawfully denied. This issue of “misapplication” of responses to notices was addressed in depth in the email dated November 26, 2021, which discusses Item #2 on this list, Conform To IRS Guidelines By Considering Married Couples As One Tax Entity.
Meanwhile, several people have contacted me to tell me that FTB did acknowledge receipt of their Protest letters. In each of their cases, FTB sent them a letter stating that if they didn’t waive their right to Protest per R&TC Sections 21010 and 20102, FTB would penalize them an additional $5,000 on top of the penalties that had already been assessed (copy attached).
I believe this threat qualifies as the federal crimes of extortion, coercion and conspiracy against rights (18 USC 241 and 242). I am asking that FTB immediately cease and desist this unlawful practice and refund all of these unlawfully imposed penalties.
I believe that this practice corroborates the need for oversight of FTB’s business practices from the Superior Court system, which is Item #1 on this list, Close Loophole That Allows FTB To Evade Due Process for Implementation of Collection Tools. The need for judicial oversight was addressed in detail via an email dated October 23, 2021. I doubt FTB would have ever started issuing these notices if FTB had judicial oversight to ensure that FTB’s policies and procedures comply with the law.
7. 24-Hour Processing of Correspondence and Payments
Last year, one of my ATBOR requests was: “Offer More Methods of Sending Information to FTB.” I had complained that FTB only processed correspondence timely if the information was sent via fax, which is an antiquated technology that is difficult and expensive for the average person to access. I complained that sending documents via regular mail was not an option since FTB has 90-day backlog on responding to mail. I had specifically requested that secure email options be offered and that regular mail be processed within 24-hours.
Here is part of FTB’s response: “We generally open express mail within 24 hours of receipt… and paper correspondence sent via USPS/express mail can take up to 90 days to process.”
I believe that FTB’s policy of opening express mail within 24-hours of receipt is a violation of R&TC Section 21027, which states: “We must treat items delivered by a private delivery service (those designated by the Secretary of the Treasury) as though you mailed them with the United States Postal Service. We treat the date the designated delivery service recorded or marked the same as postmarks by the United States Postal Service.”
From the response FTB provided, it sounds like FTB opens all express mail packages within 24-hours and cherry picks which mail it wants to process timely and which mail it will be ignore for 90-days. I am requesting that FTB immediately cease the unlawful practice of opening express mail earlier than mail received via regular USPS mail.
I am requesting that ALL correspondence that FTB receives, no matter which delivery method is used, is processed within 24-hours. There should be no differentiation in turn times between express mail, regular mail, fax, or MyFTB submissions.
On January 31, 2021, I sent a rebuttal to FTB’s 2020 ATBOR Response. In that rebuttal, I stated that this differentiation in turn times between different methods of delivery penalizes the people who do not have the financial resources to utilize the more expensive forms of delivery. The slow turn times guarantees that penalties, fees and excess interest will be imposed on people of low socio-economic status – not because the taxpayers didn’t respond timely, but because FTB did not process the correspondence timely.
I believe that this differentiation of turn times in a manner which penalizes the poor qualifies as a violation of the 14th amendment of the US Constitution, which states that all classes of constituents are to be treated the same by the government. I am requesting that FTB comply with the 14th amendment by providing equal access to all for the processing of information and payments.
8. Put amortization schedules on each bill showing how the interest for the billing period was calculated
I believe that the statements/bills currently issued by FTB do not comply with R&TC 19117 since they omit pertinent information that is necessary for the taxpayer to check accuracy. Putting complete amortization schedules on the bills, including the principal balance, interest rate, and the dates that interest began accruing is essential for proper compliance.
Most importantly, though, is an explanation on the bill as to why some payments/portions of payments are not included into the principal balance, which was already discussed in Item #5 above, Disclosure of Guidelines Used for Calculating Interest.
If FTB stands by their principals of managing taxpayer accounts with accuracy and financial integrity, operating with transparency, and conducting business in accordance with the Statement of Principles of Tax Administration, FTB will not hesitate to implement this policy.
9. Disclose Tax Codes That Justifies Not Including Payments Into NPA Totals/Denying Protests on the Grounds of FTB Underreporting Collected Amounts
Here is an excerpt from Declaration of Christine N. Grab in Support of Motion to Compel Further Response to Specially Prepared Interrogatories, Set #1: Clarification of Policies and Procedures,
SPECIAL INTERROGATORY NO. 3C: It appears there are many categories for protesting the amount of income FTB assessed in calculating the tax liability (please see the examples attached as pages 2 – 5); however, it appears there is no category to Protest the amount of money that FTB has collected in payments towards that year’s liability. Is it possible for a taxpayer to file a Protest to a NPA on the basis that FTB has underreported the amount of payments FTB has collected?
FTB RESPONSE TO SPECIAL INTERROGATORY NO. 3C: …Therefore, any protest on the ground that FTB did not include the prepayments or credits is not supported by legal authority.
As has been established by Revenue and Tax Code 19087, a Notice of Proposed Assessment can only be issued on accounts that have an outstanding tax liability due for the year as assessed by FTB using a status of single, filing 0 exemptions.
In my own case, I have documented via court records that FTB issued Notices of Proposed Assessments (NPA) to me and my husband for multiple tax years which had not included all of the prepayments and credits collected by FTB into the revenue totals.
We filed Protests to these NPAs. As has already been established in Item #2 via the email that was sent on November 26, 2021, FTB “misclassified” all of our Protests to these NPAs and thus denied us our right to Protest under R&TCs 21010 and 20102.
However, as FTB employee Keith Swank stated under penalty of perjury, even if our Protests had not been “misclassified,” the Protests would have been denied on the grounds that FTB does not legally have to include all prepayments and credits received into the calculations. I believe that the denial of the right to Protest on these grounds is a violation of the Taxpayer Bill of Rights Sections 21010 and 20102.
Mr. Swank refused to provide any legal codes to justify this practice, which is one of the reasons that I filed the Motion to Compel. While the judge did not order Mr. Swank to provide the legal codes, I believe that FTB has a responsibility to disclose these legal codes in order to comply with its own Foundational Principals:
- Operate with transparency to maintain public trust and confidence.
- Conduct our business in accordance with the Statement of Principles of Tax Administration, Taxpayers’ Bill of Rights, and our organizational values.
As such, I am requesting that the Taxpayer Advocate provide all of the relevant legal codes which justify not applying all prepayments and credits that have been collected by FTB into the taxpayer’s NPA totals. I am also requesting all legal codes that justify not allowing Protests on the grounds that FTB had underreported the totals collected.
I am sure that you will want to review the full context of the quote above for your response. Please download the Declaration from the court: https://roa.sdcourt.ca.gov/roa/faces/CaseSearch.xhtml. The case year is 2020 and the case number is 00005100. The Declaration is Item #39. Item #3C, the quote referenced above, encompasses pages 10 – 16.
10. Taxpayer Advocate to Address Issues of Constitutionality of Tax Laws
On the FTB website page titled “California Taxpayers Bill of Rights Information for Taxpayers” it states: “The Advocate or designee coordinates the resolution of taxpayer complaints and problems.”
On the Taxpayer’s Advocate page, it states that “The Taxpayer Rights Advocate (TRA) will not accept your case if… it questions the constitutionality of the tax system or tax laws.”
This contradiction is unconscionable. The whole point of the job of the Taxpayer Advocate is to ensure that the taxation agencies are properly following the federal and local laws as written to prevent predatory behavior.
Ms. Voet has sworn an oath to “…bear true faith and allegiance to the Constitution of the United States and the Constitution of the State of California…” I believe that Ms. Voet refusing to address issues of proper application of the laws violates her oath of affirmation and position duty statement. I believe that this constitutes the federal crimes of willful negligence of her job duties, malfeasance and treason of oath.
As I have documented repeatedly in my own court case, the predatory behavior that I’ve personally experienced from FTB involves shockingly inaccurate interpretations of the existing federal and state laws. Every item on my list this year either involves FTB abusing the legal system in a way that unlawfully penalizes taxpayers or FTB’s failure to disclose the laws on which questionable business practices are based.
I am requesting that FTB immediately change this guideline of the Taxpayer Advocate not accepting complaints that question the constitutionality of the tax system or tax laws so that Ms. Voet can properly do her job in accordance with her sworn oath.
Thank you for your attention to my requests. I look forward to speaking at the meeting and reading your Formal Responses to my requests.
Regards,
Christine Grab
FTB’s Response was evasive. I believe this response was a violation of several laws, and in the second Federal Criminal Complaint that I filed against Keith Swank, Chelsea Hubbard and Anna Barsegyan, I named Brenda Voet as a co-conspirator for refusing to disclose information that could be utilized in my court case.
Note: Edited 12-04-2021 to add speech link and change tense from future to past. Also to add: I am not suicidal, I don’t have depression issues, I am a careful driver, I rarely drink alcohol, and I do not use drugs of any kind (not even aspirin). My family lives a wholesome life. If something happens to me or my family that is out of character for us, we were set up by the State of California as revenge for exposing their crimes.