I wanted to bring three items of concern regarding how the State of California spends our tax dollars. At the Franchise Tax Board’s June 24, 2024 Board Meeting, they discussed:
I. Items 5B and 6: Cal EITC Credit as a stalking tool
I have posted before about California’s obsession with getting people to file tax returns, even when they do not make enough money to be required to file tax returns. One of the ways that FTB tries to get people to file is by offering “carrots.”
Their biggest carrot is called Cal EITC and it is basically money back. People can get money back from the state even if they didn’t pay any income taxes in the first place. The State of California has a budget of $1.1 billion for this incentive.
At the March 2022 meeting, FTB gave an uber creepy presentation about how for the last decade, they have been stalking low-income people who are not required to file (This is the 2022 video. The presentation starts at 37:20. Here is the 2022 transcript. The presentation starts on page 28). They partnered with “many community-based advocates as well as our peer state agencies.” They stated that they’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. The primary goal was to figure out how to make filing simpler so that people would be less resistant to filing returns. The secondary goal was to “develop methods of collaboration and coordination with state agencies in order to increase collective efforts to reach this population.”
At the June 2024 Board Meeting, Item 5B was a request for $10, 500, 000 to be disbursed to California Department of Community Services and Development for this stalking program.
Item 6 was a lengthy discussion about how FTB was trying to create a free income tax filing service in order to get people to file returns to claim the Cal EITC credit. Basically, the only way to know how much your CAL EITC credit will be is by actually filing the return. Most low income people will not risk paying $150 to an H&R Block or software company if they are not 100% certain they will get more than the $150 back.
In that discussion, FTB disclosed that the state was giving this credit to illegal aliens, and one of the reasons why these illegals weren’t filing was fear of being caught and deported.
II. Item 3:
A. Foster tax credit: As a parent, my other concern was the new Foster Care credit. If I recall correctly, this is only the second year it has existed. Now, I am all for people willing to take in foster kids to get this credit. It is the timing of implementation concerns me. It came at the same time there was a push by the State of California to forcibly remove trans children from their homes if the parents opposed the children mutilating their bodies. Simultaneously, CPS changed the rules so that people are no longer allowed to foster kids unless the people agree to be supportive of these children choosing to mutilate themselves. 4,500 children were accounted for under this new credit for tax year 2023. That is 4,500 kids who are given carte blanche to destroy their bodies, often against the wishes of the parents.
B. Customer Service: As you all know, I have been fighting corruption at the Franchise Tax Board since 2016. I have caught them running 8-unlawful schemes to overcharge taxpayers. Part of the way they get away with it is via making “mistakes,” then make impossible for the taxpayer to correct FTB’s “mistakes.”
In Item 3 from the June 2024 Board Meeting, FTB disclosed that for tax year 2023, it only answered 50% of calls that it receives, and the average wait time is 16-minutes. FTB seems to have serious chronic phone problems that habitually disconnect people when transferring from hold to an agent. So that means you wait 16-minutes, then get hung up on and have to call back. I personally believe that this is a ploy to make it impossible for people to clear up “irregularities” perpetrated by FTB. If someone only has a 30-minute lunch break and gets hung up on after 16-minutes, they have to wait until the next day to call back and may get hung up on the next day, too.
FTB said that for tax year 2023, they answered 72,000 chats, but did not disclose what percentage of people that was. At the March 28, 2023, meeting, FTB had disclosed that 54% of live chats go unanswered. FTB also did not disclose how many of those chats could be resolved via chat. When I have tried chat in the past, I am usually told I have to call in.
FTB also did not disclose their turn times for document processing for tax year 2023. At the March 28, 2023 meeting, FTB had disclosed that correspondence sent via USPS was being processed within 4 – 5 months and correspondence sent via MyFTB (FTB’s portal) was processed within 30-days (page 8).
At the board meeting on March 28, 2023, FTB admitted that people were having penalties falsely imposed due to customer service failures (ie, FTB received dispute correspondence by the dispute deadline, but did not process the correspondence before the penalty was imposed). FTB didn’t straight out admit that they were falsely imposing wage garnishments, levies and liens, but implied that it was doing so with words such as “moved into involuntary collections.”
During the March 28, 2023 meeting, FTB was awarded $25.23 million more dollars to correct these customer service failures. Based on the fact that FTB is still only answering 50% of inbound calls, I think it is safe to say that FTB has wasted this money. The reality is that if their chat percentages and processing turn times had improved, FTB would have bragged about it. The fact that they didn’t disclose this information says it all.