FTB’s response to the 13 policy change requests that I made is short, terse and riddled with problems.
Item 1: End Policy of withholding estimated tax payments made via credit elects
FTB wrote: The Franchise Tax Board previously addressed this issue in the 2018 Taxpayer Bill of Rights response to you, dated January 25, 2019.
Rebuttal: In my written submission, I clearly detailed how they had committed one count of collusion to cover up racketeering by misrepresenting what the law said in Commissioner V Lundy. I also re-sent them a copy of the 2018 letter to Governor Brown in which I cited several more times that the FTB committed the crime of collusion to cover up racketeering on this topic. In this response, FTB did not dispute my interpretation of the assorted laws they falsely cited, nor offer any valid laws.
In my OTA appeal that was heard in August 2019, the FTB never denied that this withholding practice is unlawful. Had the above legal case been a valid justification, the FTB would have brought it up in the hearing. The FTB was apparently less willing to attempt to deceive the judges than they were in trying to deceive me.
It is worth noting that Susan Maples staunchly refused to sign the 2018 Annual Taxpayer Bill of Rights Response when I pointed out to her that her signature was missing. On the 2019 letter, she used a computer font instead of an actual signature.
Item 2: End policy of withholding estimated tax payments from married couples
FTB wrote: The Franchise Tax Board previously addressed this issue in the April 2018 Taxpayer Bill of Rights response to you, dated January 25, 2019.
Rebuttal: In my April 2018 letter to Governor Brown, I detailed I detail how the FTB cherry-picked words out of context to justify these policies; but when read in context, the laws say the exact opposite of what the FTB claims. The FTB has not disputed my interpretation of the laws, nor have they provided any legitimate laws to justify this practice.
Item 3: Implement a policy whereby fees may not be assessed when the fee was implemented as a result of FTB breach of duty
FTB wrote: The notice and demand penalty is assessed without regard to timely payments. (Revenue and Taxation Code section 19133). This means the timing and application of payments to a year where a taxpayer has failed to file a return in response to a demand notice is irrelevant for purposes of computing the penalty.
Rebuttal: In their response, they only focused on erroneously applied Demand Penalties. Let’s keep in mind that they have already been caught red-handed in multiple other schemes where extra fees are a direct result of their breaches of duty. For example, CBS Sacramento caught them deliberately sending collection notices to invalid addresses so that the recipient couldn’t pay it timely nor dispute errors. Hence, the late fees and interest would be piled on, and people would just wake up one day to a drained bank account — and were told there was nothing they could do about it. All of those extra interest and penalties were a direct result of their breaches of duty!
Here is a second example: Adrian Vance wrote an entire book on how The California Franchise Tax Board is taking money from the accounts of people all over America when they have the same names as people who lived and worked in California. As I found out when I was doing my legwork for my Superior Court case, people who live outside of CA have almost no recourse to get unlawfully collected money back from FTB.
But let’s focus on Demand Penalties. From the lawsuit that I just filed against the FTB:
A. Tax Codes 19133 and 19087
Revenue and Taxation Code 19133 says…. (2) the FTB has proposed an assessment of tax under the authority of Revenue and Taxation Code section 19087… CA Rev & Tax Code § 19087 says… All the provisions of this part relative to delinquent taxes…
B. Misapplication of 19133 via Violation of 19087
As we documented in our Office of Tax Appeal (OTA) case, in each year in question, we had overpaid the estimated taxes as determined by FTB’s own estimates prior to the due dates. However, FTB repeatedly unlawfully withheld and misapplied our estimated tax payments, and thereby breached its duty to accurately and timely apply these payments to our account (Exhibit 2).
As such, our account appeared to be underfunded for each of these years. As noted above in R&TC 19087, Demand Notices and the accompanying Demand Penalties are only applicable relative to delinquent taxes (as assessed by FTB). Since our account appeared to be delinquent, Demand Notices were issued and a Demand Penalties assessed.
Item 4: Disclosure that the annual Taxpayer Bill of Rights meeting requests can be submitted online
FTB Wrote: Currently the Taxpayers’ Bill of Rights §21006 requires that the FTB conduct a hearing before the three-member Board where industry representatives and individual taxpayers are allowed to present their proposals for change in a public forum.
We will review and analyze the feasibility of your request to allow proposals specific to the hearing to be submitted online.
Rebuttal: It sounds to me like they stopped offering the option to submit requests online, which is news to me. I submitted my 2017 requests online and they responded to them. I know for a fact that at least one of the 2018 requests was also made online, and FTB responded to it. So clearly, they have just recently taken that right away
Item 5: Create a public, online database of all the FTB’s policies and procedures that are searchable by key word
FTB Wrote: FTB has placed nine of its manuals/procedures on its public webpage. These manuals can be located at the link below. FTB’s webpage is searchable by key words based on the best technology currently available and is continuing to improve. Also, each page has a link entitled “Is there something wrong with this page” for taxpayers to contact FTB about issues they may have with the webpage. We have received a lot of helpful feedback about what should be included on the public webpage, and we are happy to consider this suggestion as well.
Rebuttal: No comment at this time. When I have time, I’ll play with the database and see if I can find the assorted things I have asked about over the years. I’ll report back when I do.
Item 6: Clear guidelines of what constitutes an abatement and claim for refund requests
FTB Wrote: We have a webpage devoted to claims for refund. As explained on this webpage, FTB accepts claims for refund through:
- Amended returns
- Letters
- Reasonable cause forms –FTB Forms 2917 and 2924
To be valid, a claim must be:
- In writing
- Signed by the taxpayer or the taxpayer’s authorized representative
- Include the specific reason[s] for the claim
- Filed within the statute of limitations (SOL)
For penalty relief, a taxpayer may file a claim for refund after the taxpayer has paid the penalty in full. If the FTB denies the claim or it is deemed denied pursuant to Revenue and Taxation Code section 19331, the taxpayer may appeal to the Office of Tax Appeals or file suit in Superior Court. If a taxpayer files FTB Form 2917 (Reasonable Cause – Individual and Fiduciary Claim for Refund) before paying the penalty, FTB will consider this a request for penalty abatement. If FTB rejects the request for penalty abatement, the taxpayer must pay the penalty and file a claim for refund to challenge the penalty before the Office of Tax Appeals or Superior Court.
Rebuttal: In my case, I wrote a letter to GovOps (agency that oversees FTB) alerting them to the illegal practices at the FTB. In the letter, I said I was going to apply for a refund from FTB for tax years 2013 and 2014. FTB sent me a turn down based on this letter to another agency altogether. My letter to GovOps was in writing and signed, so it sounds to me like their “loose guidelines” hasn’t changed any. To end the “loose guidelines” they should require the form be filled out, social security numbers and documentation… there should be no way a general letter could be mistaken for a request for refund.
Item 7: Post the questions submitted to the annual Taxpayer Bill of Rights meeting along with the answers
FTB Wrote: The Taxpayers’ Bill of Rights requires that FTB conduct an annual hearing before the three-member Board to allow industry representatives and individual taxpayers to present their proposals. FTB responds in writing to proposals raised at the meeting. The written response contains a brief summary of the issue or proposal and is sent to the presenter. Taxpayers’ Bill of Rights Hearing responses are also posted to FTB’s website for transparency purposes. Transcripts of the meeting are available online, should any member of the public be interested in the presentations made at the Bill of Rights Hearing.
Rebuttal: The responses submitted online are not available for public review. If the FTB was genuinely interested in transparency, they would not hesitate to post the questions, too.
Item 8: Timely re-application of misapplied payments
FTB wrote: If payments have been misapplied and we discover it, those payments are moved and given the same effective date so as not to disadvantage the taxpayer.
Rebuttal: This response is extra noteworthy because they didn’t deny that they wait six weeks to move the misapplied money after it is located. They instead justified the lag by saying they will back date once it has been moved… hmmmm… what happens to the money during that six-week lag?
Item 9: The FTB should only utilize standard use English
FTB Wrote: The FTB strives to use plain and clear language in all of our communications, written and oral, in order to make communication easier to read, easier to understand, and to help educate the general public. FTB works hard to ensure all communication follows best practices with regard to using plain language, to ensure the FTB’s oral and written communications are clear, concise, and helpful.
Rebuttal: The FTB did not dispute the misuse of the three words that I cited in my speech/written request. And in my written request, I documented how these odd words were used to deceive regulators and evade legal requirements, so if I was mistaken, they would have called me out. I will work on a list of more words that the FTB uses that are non-standard use English.
Item 10: Issuing of denial letters
FTB wrote: FTB strives to respond to all claims for refund as required under Revenue and Taxation Code section 19323(a). If FTB does not respond to a taxpayer’s refund claim within six months, the taxpayer may consider that a denial and move forward with due process pursuant to Revenue and Taxation Code section 19331. However, it is not FTB’s practice to ignore claims.
Rebuttal: It is interesting that the FTB only addressed claims for refunds and didn’t address requests for extensions to file returns.
I did submit a claim for refund for tax year 2011 that was ignored. I later found out that ignored = denied. Of course, they are required by law to disclose my right to appeal in their denial letters… and by never sending a letter, they never disclosed this right to me. At that point in time, there was nothing on the website that disclosed the right to appeal when you don’t get a letter.
But I also sent in at least two requests for extensions to file our returns (one for me and my husband) for each year that were late (2010 – 2016), and some years I sent in multiple requests for each of us. Most of those were ignored, as well (though in my OTA case, FTB referred to these as “denials”).
Item 11: Move the Taxpayer Advocate to work under GovOps
FTB wrote: The Franchise Tax Board previously addressed this issue in the 2018 Taxpayer Bill of Rights response to you, dated January 25, 2019.
Rebuttal: None needed here. While the FTB said they are not going to voluntarily restructure themselves, they will work with a legislator who wants to propose this legislative idea. The onerous is on me to get a legislator to do it. I am actively trying to get the Senate and Tax committees to seriously consider this legislative idea.
12. FTB staff should only sign letters they wrote themselves
FTB wrote: In general, a letter to any person from FTB contains either a signature or the name of the writer, authorized representative, or contact person familiar with the subject area. For computer-generated letters, a telephone number and an address is provided to contact a person familiar with the subject.
Rebuttal: Ms. Maples (the Taxpayer Advocate) is a nice lady. I was sad to see that she signed this year’s letter, which contains multiple counts of collusion to cover up racketeering. I can’t believe she let them throw her under the bus yet again!
Fortunately, there were many FTB employees who heard my speech. I hope that they understand that “my boss told me to” is not a valid legal defense in court, and that they start standing up for themselves and refuse to sign things that could get them in trouble.
13. Stop harassing people online
FTB wrote: Only authorized employees can respond on social media websites or other online forums on FTB’s behalf. FTB has never authorized any employee to respond or post on Reddit on FTB’s behalf.
Your personal information is protected under various California laws, including Revenue and Taxation Code section 19542 and the Information Practices Act (Civil Code section 1798, et seq). FTB will not disclose your personal information without your consent, unless authorized by law.
Rebuttal: None as of yet since I have not had a chance to read the laws they cited. On Friday, I emailed Ms. Maples to ask if the FTB did an investigation to find out who the guy was who harassed me. He had to be an FTB or OTA insider because he knew information that wasn’t public. I haven’t heard back from her as of yet, but I also don’t expect to hear anything for a few more days (she needs time to look into it, and it is a holiday weekend in tax season, so she’ll be swamped when she gets to work tomorrow).