In situations where the taxpayer has not paid the tax in full but has otherwise filed a valid claim for refund, Cal. Rev. & Tax. Code Section 19322.1 allows a taxpayer to file an informal claim for refund tolling (delaying the expiration of) the statute of limitations. Practitioners should be…
Cal. Rev. & Tax. Code Section 19043.5 was added by the California Legislature during the 2001-2002 legislative session. Under the prior law, if an adjustment proposed by the Franchise Tax Board (FTB) did not result in additional tax due, but only affected the amount of a tax credit that may…
Under Cal. Rev. & Tax. Code Section 19306(a), a claim for refund typically must be filed within four years from the date the return was filed, four years from the last day prescribed for filing the return (determined without regard to any extension of time for filing the return) or…
The accuracy-related and fraud penalties under Cal. Rev. & Tax. Code Section 19164 are generally determined in accordance with federal law. The federal counterparts to Section 19164 are I.R.C. Sections 6662-6665. Defending against the accuracy-related and fraud penalties can be difficult and requires a solid understanding of the applicable exceptions…
Cal. Rev. & Tax. Code Section 24425 operates to prevent taxpayers from deducting expenses incurred to generate nontaxable income. Analysis Expense attribution has become an important issue in California in light of the Ceridian, Farmer Brothers, and Abbot Laboratories decisions in which the dividends received deduction treatment under Cal. Rev.…
The California water’s-edge election has proved immensely popular with both foreign and domestic parent corporations potentially engaged in a worldwide unitary business. Many elections are made to reduce or minimize California franchise tax, while others are made to simplify or reduce the compliance burdens under California’s worldwide combined reporting method.…
Franchise Income Tax: Apportionment and Allocation of Business and Nonbusiness Income In General Motors Corp. v. Franchise Tax Board, the first of the six “gross receipts” cases in court in California to be decided in the Court of Appeal, the Second Appellate District addressed the issue of what the term…
Introduction As a result of discussions between Governor Arnold Schwarzenegger and the California Legislature as part of the funding of the fiscal 2005 Budget Act, language to implement a tax amnesty program was included in Senate Bill (SB) 1100, which was written by the Senate Budget and Fiscal Committee. Amnesty…
California corporate and individual taxpayers with pending audits, protests, appeals or settlement proceedings with the California Franchise Tax Board (FTB), or with comparable proceedings pending with he California State Board of Equalization (BOE) should pay particular attention to new penalties recently enacted by the Legislature and Gov. Arnold Schwarzenegger as…
For the first time in over 20 years, the California Court of Appeal has issued a published decision interpreting the California residency provisions of Revenue and Taxation Code section 17014. In Homer E. Nobel et al. v. Franchise Tax Board, the court addressed whether the taxpayers were residents of California…