Tax News
November 2006

Some head of household e-filers receive erroneous NPAs

Software used by some of our head of household e-filers inserted incorrect information on the head of household audit questionnaire, resulting in our automated system issuing erroneous Notices of Proposed Assessment. Find out what to do if your clients were affected. / more+

Check casher businesses to receive reminder letter

A new law that took effect this past January 1, 2006 requires check casher businesses to track check cashing transactions. FTB will mail letters to check cashers this month to remind them of this information-reporting requirement. / more+

Legislative Wrap up 2006

Our annual summary of tax-related legislation enacted this session. Some of the new legislation is discussed in individual articles in this issue. / more+

AB 2341 enacted, eliminating need for tax clearance certificate

Things just got a little easier for certain business entities that are dissolving or canceling their businesses. The passage of AB 2341 eliminates the tax clearance certificate requirement, and means that many dissolving corporations won't get caught having to pay their annual or minimum tax after going out of business. / more+

California's new filing requirements for registered domestic partners

Another law passed in the recent session requires registered domestic partners to use the same filing status applicable under federal law to married couples. This law does not, however, affect federal law. FTB seeks public input in understanding all the issues that may affect registered domestic partners filing California tax returns. / more+

Real estate withholding law changes for 2007

AB 2962 makes changes to real estate withholding requirements for all transactions closing on or after January 1, 2007. Sellers may now choose the original withholding method (withholding three and one-third of the property's sales price), or elect an alternate withholding amount that is based on applying the maximum tax rate to the seller's estimated gain. / more+

Make sure you're using FTB-approved substitute or scannable forms

Forms generated from your tax preparation software must meet the requirements of our Substitute Forms Program. Avoid costly processing snags caused by using unapproved forms - check with your software provider, and check out our list of software companies who have stated their intent to comply with our forms requirements for tax year 2006. / more+

Disclosure of list of corporations under audit

In an unintentional email disclosure on September 20, 2006, FTB revealed several corporations under audit. In this article, we describe what we are doing to repair the origin of the problem, in combination with our ongoing efforts to safeguard confidential taxpayer data. / more+

Taxing municipal bond interest in California

What effect does the recent Kentucky Supreme Court decision on taxation of interest on out-of-state municipal bonds have on California? Find out how FTB is handling this issue for California taxpayers. / 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

California Supreme Court issues decisions on Microsoft and General Motors

The California Supreme Court issued two decisions on August 17, 2006, affecting apportioning corporations. Although the California Supreme Court decisions are not final, we are evaluating the decisions and guidance from the two cases, and exploring how to incorporate the guidance from these decisions in the audits of other taxpayers. / more+