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.
This practice of withholding credit elects in order to improperly impose Demand Penalties is the Federal Crime of Racketeering per the RICO Act.
If a taxpayer is single, the FTB will apply the credit elect to the taxpayer’s account AFTER the Demand Notice has gone out, but they are still on the hook for the false penalties.
However, married taxpayers are double racketeered. The FTB refuses to apply monies to married people’s account until the return is filed. In addition to the false penalties, the FTB demands overpayments of estimated tax monies that would not have been due had the original estimated tax payments been applied in accordance with the law. This second ploy to collect extra funds from married people is also the federal crime of racketeering per the RICO act.
2. End the policy of withholding estimated tax payments from married couples.
It is not only credit elects that are withheld from married couples — ALL estimated tax payments made by married couples are withheld. If a married couple files late, they are double-racketeered as I just described.
The FTB claims this policy is in line with federal practices, but that is a lie; the IRS does not withhold estimated tax payments made by married couples.
The tax code that the FTB uses to justify this policy says that joint estimated tax payments can be apportioned in any manner that the spouses agree upon. By not giving the spouses the opportunity to designate how much of the money is to be applied to each spouse, and instead withholding the payment altogether, the FTB is violating federal law.
3. Implement a Policy Whereby Fees May Not Be Assessed When The Fee Was Imposed As A Result of Breach of Duty.
The FTB seems to frequently “misapply” estimated tax payments. The net result of these “mistakes” is the same as with the withholding scenarios. If a taxpayer files late, the current year’s tax liability appears to be underfunded, and thus a Demand Fee is imposed. The fee would not have been imposed had the FTB not breached their duty to accurately apply payments.
The FTB is currently being financially rewarded for their breaches, and thus are incentivized to make “mistakes.” We must eliminate the incentive to err.
4. Disclosure that Requests for the Annual Taxpayer Bill of Rights Meeting Can Be Submitted Online
This Meeting is a California State Right. I am pleased to see that the FTB has added a blurb about the meeting on their website in a place where it could actually be found.
However, the verbage makes it sound as if personal attendance is required to make a request. Attending this meeting is impossible for most Californians, as most of us can’t afford to take the day off of work to fly to Sacramento. Not disclosing the right to make a request via email is discrimination against the middle and lower classes.
Last year, I also stated that FTB agents were trained to violate California’s disclosure laws by telling people who complained about FTB policies or procedures that the FTB cannot do anything to change these practices. In their response, the FTB did not address retraining staff to comply with the law. I am asking you to address it this year.
5. Create a public, online database of all of the FTB’s Policies and Procedures that is searchable by key word.
Over the years, FTB agents have repeatedly given me erroneous information that created problems. Even the FTB’s Disclosure Department sometimes gave me incorrect information – that is, when they answered my requests. Several of my Disclosure Department requests were not answered because they said I needed to better identify what I was looking for.
Had an online database of policies existed, I could have simply looked up the information for myself by typing in assorted keywords until I found what I was looking for.
6. Clear Guidelines of What Constitutes an Abatement Request and Claim for Refund Request
At last year’s meeting, I made this same request. I explained that I had been turned down for my tax years 2013 and 2014 Abatement Requests before I applied. When I asked Ms. Maples how this could possibly be legal, she told me that I was turned down because I told GovOps that I was going to submit an Abatement Request. Ms. Maples said this turn down was considered “reasonable” thanks to the FTB’s “loose guidelines” of what defines an abatement request.
This policy of “loose guidelines” is a tool to deny due process for Taxpayers. The law states that documentation must be provided along with the request, but the FTB pre-emptively issues denials before the taxpayer has a chance to submit a formal request along with documentation.
In the FTB’s Formal Response to me, they did not address this request. Instead, they referenced a page on the FTB’s website titled “Claim for Refund,” which contains directions on how to request a refund.
I am asking that you address the unlawful practice of pre-emptively issuing denial letters in this year’s response.
7. Post the Questions Submitted to the Annual Taxpayer Bill of Rights Meeting Along With the Answers:
For the 2017 Meeting, I made an online request to end the policy of withholding estimated tax payments made via credit elect. In their Formal Resolution, the FTB did not respond to my question – instead, they answered a completely different question. But I was the only one who knew that because the question had not been posted.
When I asked Ms. Maples why questions weren’t posted, she replied it was necessary to leave the questions out because they may contain personal information. That is ridiculous, as personal information can be redacted. I am requesting that the FTB post the questions so they can no longer evade accountability.
8. Timely Re-Application of Misapplied Payments.
I noticed in the FTB’s accounting ledgers that there is a six-week lag between the date that a misapplied payment is located and the date the money is moved to the correct tax year. I am requesting that these misapplied payments be corrected immediately.
9. The FTB Should Only Utilize Standard Use English
The FTB utilizes a strange internal vocabulary that does not match standard use English. Here are three examples:
A. the word “transfer” means “tell the customer to hang up and call an entirely different phone number.”
B. When someone disputes a Notice of Proposed Assessment, the dispute is called a “No Response.”
C. When the FTB ignores written correspondence, they call it issuing a turn down.
Due to the language barrier created by the strange vocabulary, taxpayers often do what they believe they were told, only to find out later that they did the wrong thing. Besides confusing taxpayers, these odd vocabulary words also serve deceive regulators.
10. Issuing of Denial Letters
Over the years, I have submitted many requests to the FTB that they never responded to. In my OTA appeal, the FTB claimed that not responding to my requests was the same as issuing a denial letter. This practice is unprofessional and creates confusion for taxpayers. I am asking that the FTB establish a policy that all denials must be issued in writing.
11. Move the Taxpayer Advocates to Work Under GovOps.
Having the Taxpayer Advocates employed by the Taxation Agencies they are supposed to be protecting Taxpayers from is a conflict of interest. It is not fair to the Advocates to be placed in a position of divided loyalties. This can be corrected by changing their employer to GovOps.
I am requesting that the FTB work with my State Legislators to create a bill to propose in 2020 with the following structural changes:
A. Instead of one Advocate per Taxation Agency, there should be one Advocate per district that works with all three Agencies.
B. The Advocates should work under GovOps.
C. The Tax Appeals Assistance Program should stay with the Advocates at GovOps. Currently, this crucial free student attorney program is being administered by the agencies that they are fighting against in court.
12. FTB staff should only sign letters they wrote themselves
In the 2017 Formal Resolution that I mentioned, Susan Maples committed two counts of Collusion to Cover Up Racketeering. The Advocate Department later claimed that she did not write that letter herself. But she signed it, so she is on the legal hook.
Rather than making Ms. Maples a scapegoat, I think that in this year’s resolution, each person who helped author it should sign the portion that they wrote. Going forward, all letters issued by the FTB should only be signed by the true author.
13. Stop Harassing People Online
In May 2019, a new account by someone named Dave appeared on a popular website called Reddit. He offers advice to people who post questions about tax issues. Based on his expertise in all matters FTB, how quick he is to respond, and how much time he spends online, he appears be a full-time FTB employee paid to answer these queries. Unfortunately, Dave also harasses people who criticize the FTB. While I think an online marketing person is a great idea, I am asking that you train your employees to be polite online.
Video is here. Please note that the speech had a time limit, thus was shorter and less detailed than the written submission that I provided prior to the speech. The written submission is here.