Tax News
September 2006

Software reminder for final business return

Checking the "final return" box on the California Corporation Franchise or Income Tax return does not eliminate the $800 minimum tax obligation. We are working with software developers to build in a reminder when this box is checked, that the $800 minimum tax continues to accrue until all other steps in the process are completed. Double check your understanding of what else your clients must do to avoid paying minimum tax after ceasing to do business. / more+

Business e-file

As of January 2006, California business taxpayers were able to electronically file Form 100 for the first time, along with certain accompanying forms and schedules. We are adding more forms and schedules - see what will be available for e-filing, beginning January 3, 2007. / more+

Adjusted interest rate to change in January 2007

The adjusted interest rate currently stands at seven percent. It has been as high as 18 percent (May 27, 1982 to December 31, 1982), and as low as four percent (July 1, 2004 to June 30, 2005). Find out what it will be as of January 1, 2007. / more+

Penalty notices shine light on shady tax preparers

In August, FTB mailed Notices of Tax Preparer Penalty Due to unscrupulous tax preparers. The notices are formal demands for payment, and the balance is due immediately to FTB. In some cases, penalties are as high as $5,000 per return or claim, when understated tax liability is due to "willful or reckless conduct" by the preparer. Lesser penalties may also apply. / more+

Overstated deductions - don't underrate their contribution to the tax gap

What is an acceptable business expense deduction? Would that include legal fees paid to acquire business assets? Repairs that add value to property, or increase its life? Is there a difference between federal law and California law in property cost phase-out? Find the answers to these questions, and many others, in this article. / more+

New tax deposit forms, and converting a protest to a refund claim

Two new forms available in early October aim to ensure that remitted amounts are reported properly. The Tax Deposit Voucher will designate a remittance as a tax deposit for a specific tax year. The Tax Deposit Refund or Transfer Request will be used for several purposes, including requesting a tax deposit refund, and designating that a tax deposit be applied to a different tax year. / more+

Get detailed information on converting a protest to a refund claim for your clients with tax deposit amounts on account.

The long arm of tax law

Each issue of Tax News gives you an update on tax crimes, and their consequences ("Criminal Corner"). In August, we gave you a view of the Investigations program, behind the scenes. In this issue, we focus on the training that goes into becoming a special agent, and how it relates directly to our commitment to closing the tax gap. We also introduce you to our Fraud Prevention and Detection group, which works year-round to identify false W-2s, shut down refund mills, and uncover other hidden zones of the tax gap. / more+

Criminal Corner

Our monthly summary on bringing tax criminals to justice, and closing the tax gap one case at a time. / more+

The buzz on big business

This month Tax News introduces a new department covering big business. Our first article compares the Research Credit with the Alternative Incremental Credit (AIC). Do your clients qualify for these credits – and how are they claimed? Can individual members of a combined group choose either credit? Find answers to these questions, and more… / more+