Notices of proposed assessment, etc.

Reasons for receiving a letter from the FTB include:

Mistakes on the return

• Improper adjustments to CA state taxable income – in recent weeks, the FTB has been catching up on 2016 matters where taxpayers incorrectly removed income. Retail software, such as TurboTax, makes it very easy to make this type of mistake. The solution is to send us a copy of the letter as well as your returns so we can check if the FTB computations are correct and to strategize further. An amendment or penalty appeal may also be used to reduce the taxes owed
• Missing RSU/Stock option income: many taxpayers file their return without properly accounting for their RSU or stock option income, which causes them to receive a notice.
• Missing 1099-K or 1099-MISC: many taxpayers run an online business or make a few sales on Ebay, Etsy, or similar platform & then do not report the income on their return under the false assumption that if the activity was not profitable, then there is no income to report. 
• Rollover or withdrawal from a 401k or IRA: these 1099-Rs are frequently missed, as are K-1s, 1099-DIVs, and other forms

Failure to file a return

The FTB will send letters when they believe you should have filed a return. This happens also for businesses owners, including LLCs with no activity. We receive surprised calls from business owners that did not know that you had to file a return if your business was dormant. That’s right – the IRS and most states require most business structures to file even if your company had zero revenue and will assess a penalty for late filing of these zero-activity returns. Contact us on how to resolve this matter.

Audit/request for more information

The state occasionally audits taxpayers, especially ones with aggressive deductions, schedule C businesses (freelancers, sole proprietors, single-member LLCs, etc.). They normally ask for receipts or other backup to substantiate the expenses. Contact us for representation support below.

 

If you have issues with any of the above, please scan ALL PAGES of the letter received & send (or share securely) with [email protected] and we will take a look right away. We are available assist remotely.