Ask the Advocate – CSEA Meeting Recap, Part II
2013 CSEA Meeting
On September 20, 2013, we held our annual liaison meeting with the California Society of Enrolled Agents (CSEA). The FTB staff received several great questions, I’ve decided to share a few more of the questions I thought our Tax News readers would find most helpful. I also shared some in last month’s column.
Power of Attorney
Please explain the extent of power granted to a representative with a signed power of attorney form. A member contacted FTB regarding a misapplication of funds paid by check. Amounts indicated on the check for 2012, FTB recorded to 2013. The FTB told the member that only the client could request a different application of the funds, and that the request needed to be in writing. The client submitted the letter, and the request was denied, stating that the letter didn’t meet the standards FTB needed. Since the intent of the taxpayer was on the check, we need clarification why the representative was unable to manage the issue, and what are the FTB standards needed in such a letter.
Unless taxpayers specify otherwise in Additional Privileges on the POA, the taxpayer authorizes their representative to act as their attorney-in-fact to:
- Talk to us about their account (and it allows us to discuss the account with the representative).
- Receive and inspect their account information.
- Represent them in matters before us.
- Sign waivers that extend the statutory period for assessment or determination of taxes.
- Execute settlement or closing agreements.
- Receive information from non-tax programs, such as Vehicle Registrations Collections
With a valid POA, our procedures are to assist the practitioner to move the payment if the tax year is indicated on the check. No letter is needed. The only time we request a letter is for a web payment. We ask for the letter to indicate that the payment was in error and for what year it was intended.
When sending us a payment, we recommend that the taxpayer write their tax identification number and tax year the payment is for on the check. We also recommend that the taxpayer includes a copy of our notice with the check. Taxpayers should not use a specific payment voucher (such as an estimate tax or extension) to make a general payment. This is especially true of the estimated tax voucher. Once a taxpayer makes an estimated tax payment, we cannot move the payment to another year to pay a liability (R&TC section 19364 and Rev. Ruling 77-359). To reduce the risk of payments being misapplied, we recommend using Web Pay as an alternative to using a check.
When corresponding with us regarding this type of issue, we strongly recommend that the letter contain a detailed explanation of the facts, including any supporting documents, in order for us to make a determination.
Is there a method for reporting and documenting information missing on MyFTBAccount, such as estimated tax payments that were paid electronically, but not reflected in the taxpayer’s online account information available on MyFTBAccount?
While we make every effort to apply tax payments as intended, we know that accidents happen. Sometimes payments made by joint filers may only be applied to one of the taxpayers. If a taxpayer selects the wrong payment type or tax year in Web Pay, the payment will end up in an unexpected place. We want to work with you to get these errors corrected.
Before contacting us, please verify with your client that the payment was actually made. Good examples of proof of payment are a canceled check, a bank statement, and an electronic payment confirmation.
Currently, the best way to report discrepancies you find is to contact the Tax Practitioner Hotline by phone at 916.845.7057 or by fax at 916.845.9300. Providing a copy of the canceled check or bank statement will help us quickly correct the issue. To protect your client’s privacy, we cannot discuss account information over Live Chat at this time.
Beginning in the fall of 2014, you will have new electronic means to report these issues. We will be adding Secure Chat, which will let you discuss account information online with an FTB representative during business hours, and a way to send a secure message (and upload supporting documentation such as a canceled check) at any time.
Steve Sims, EA
Taxpayers' Rights Advocate
Follow me on Twitter at twitter.com/FTBAdvocate.