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California Tax Board: 99 09

California Tax Board: 99 09



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Published by: Taxman on Jan 22, 2008
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ny given day, you can goto www.ftb.ca.gov and get themost current information affecting taxprofessionals, e.g., tips on how to avoidcommon tax preparation errors orinformation about how recent disastersaffect taxes.But what about when you need somethingother than what is readily available on ourhomepage? Do you know where to find it?Do you know
to find it?Whether you are an Internet beginner or askilled surfer of the World Wide Web, this“Guide to Franchise Tax Board on theInternet” is for you.If you are familiar with the Internet and theWorld Wide Web, you know that
websitesconstantly change
Our website is noexception. But with the help of our guide,located on page five, you will always be ableto navigate our website’s terrain, even whenthe road signs change. And in the end, youwill save time and be more productive.
Power of AttorneyPage 2Guide to FTB on theWorld Wide WebPage 5Professional EducationPage 8Manufacturers’Investment CreditPage 10
September 1999
Page 2
Volume 99-5 September 1999
is a bimonthlypublication of the CommunicationsServices Bureau, California FranchiseTax Board. Its primary objective isto provide information to incometax professionals about state incometax laws, regulations, policies andprocedures.
Members of the Board:
Kathleen Connell, ChairState ControllerJohan KlehsChair, State Board of EqualizationB. Timothy GageDirector, Department of Finance
Executive Officer:Gerald H. GoldbergEditor:Marvin Meek 
To update or correct your address or to subscribe to TAX NEWS (send $12 for a one-year subscription), write:
TAX NEWSPO Box 2708Rancho Cordova, CA 95741-2708or call: (916) 845-7070.
To view TAX NEWS on the Internet or to request an electronic mailsubscription, contact FTB on the Internet:
For information about a client’saccount, contact:
Tax Practitioner Support Unit
(916) 845-7057 (phone)(916) 845-6377 (fax)
For recorded answers to questions onCalifornia taxes, to order forms or check on a refund, call:
(800) 338-0505From outside U.S. (916) 845-6600
To send a facsimile about a client’saccount, transmit to:
Electronic Correspondence
(916) 845-6377
Information Center:
(800) 852-5711From outside U.S. (916) 845-6500
Hearing Impaired:
TDD (800) 822-6268
FTB on the Internet
Printed on recycled  paper.
September 1999
Responding to requests frompractitioners for an easier power of attorney process, the Franchise TaxBoard unveiled a new automated powerof attorney system in August.FTB can now maintain information abouttaxpayers’ representatives in onecentralized location.The new system features a newcentralized computer database called thePOA file. It uses automation technologyand centralization procedures similar tothose used by the Internal RevenueServices’ centralized authorization file.In the past, powers of attorneys weremanually processed and maintained. Asa result, the original documents weredifficult to track and maintain.Under the new system, whenever an FTBemployee needs to verify your power of attorney, they simply access the POAdatabase. Employees can conductsearches using one of several searchvariables, including social securitynumbers, names or tax years. There isalso a field for the centralizedidentification number assigned torepresentatives by the IRS’ power of attorney system.As part of the new look, FTB also revisedtheir form FTB 3520, “Power of AttorneyDeclaration for Administration of TaxMatters.” The most significant changesare:
You can now use one form forpersonal income tax, bank andcorporation and partnershipclients.
The power of attorney may beauthorized for not more thanthree future years, similar to theIRS form.
The multiple banks andcorporation schedule (formerlyform FTB 3520A) is incorporatedinto this one form.You must submit a new form FTB 3520,“Power of Attorney Declaration forAdministration of Tax Matters.” in orderto ensure that FTB has your most currentPOA information in its new database.
New Look for Power of Attorney
FTB’s Role In Child Support May Expand
At press time, three pieces of legislationthat would increase the Franchise TaxBoard’s role in California’s child supportenforcement activities were awaitingGovernor Gray Davis’ signature.AB 196 establishes a new stateDepartment of Child Support Services(DCSS) within the Health and WelfareAgency. The bill maintains FTB’s role asthe primary collection agency fordelinquent child support and authorizesFTB to collect child support paymentsthat are 60 days delinquent rather than 90days as it has been in the past.AB 150 gives FTB the responsibility of creating a statewide child supportautomation system for California. Thisnew statewide system would provide forthe sharing of all data and case files andthe standardization of functions across allof the counties.California faces millions of dollars infederal penalties because it does not havea statewide child support data, caseregistry and disbursement systems—asmandated by the federal government.The third bill, SB 542, allows third parties(employers, etc.) to send child supportfunds directly to local child supportagencies rather than to FTB. A statewidedisbursement unit will eventually handlethe function of receiving and distributingchild support funds.FTB’s success with procuring automationsystems in the past is the reason for its
Page 3
Requests for tax returns aremailed to individuals who havenot filed their 1997 personalincome tax returns.
Notices of Proposed Assessmentare mailed to individuals whohave not filed their 1997 taxreturns.151999 personal income taxestimate payments are due.20Previous month nonresidentwithholding payments are due if total withholding exceeded$2,500.
Requests for tax returns aremailed to individuals who havenot filed their 1997 personalincome tax returns.
Notices of Proposed Assessmentare mailed to individuals whohave not filed their 1997 taxreturns.15Final extended due date forpersonal income tax returns.20Same as September
Requests for tax returns aremailed to individuals who havenot filed their 1997 personalincome tax return.
Notices of Proposed Assessmentare mailed to individuals whohave not filed their 1997 taxreturns.1Last day for California Tax PolicyConference registration, to avoidlate fee.20Same as September
FTB Calendar 
Taxpayers who earn municipal bondinterest from non-Californiagovernmental entities must make anadjustment on their California returns inorder to properly report the income.California law requires that all interestincome be included in gross income,unless the interest is specifically exemptfrom tax. Although California does nottax the interest earned on bonds issuedby California state or local governments,or by the federal government, it does taxinterest income earned on municipalbonds issued by another state or thatstate’s municipalities.Assembly Bill 1040, applicable topayments received on or after January 1,1997, requires financial institutions to fileinformation returns with FTB for anyinterest they distributed to Californiaresidents from municipal bonds issuedoutside of the state.Payments of interest totalling $10 or moreon these types of municipal bonds toCalifornia taxpayers are now beingreported to the Franchise Tax Board underthis filing requirement.California taxpayers do not report interestincome from out-of-state municipal bondson their federal returns because thisincome is exempt from federal taxation.Consequently, they must adjust theirCalifornia returns by filing a Form 540 andadding the municipal bond interest toline 8 of Schedule CA.In May 1999, FTB began a pilot project ontax year 1997 returns to determine taxpayercompliance with the reporting of municipalbond interest. FTB plans to conclude the1997 tax year pilot at the end of 1999.For more information about FTB’s powerof attorney program, refer to form FTB1144, “Power of Attorney: Frequentlyasked Questions.”To contact the Power of Attorney Unit,write to:Power of Attorney UnitP O Box 2828Sacramento, CA 95741-2828Or, send the unit a fax to 916- 845-0523.Form FTB 3520 is available by:
Fill it out online or have it sentto you via email. Go to the “FTB 1998California Income Tax Forms, Instructionsand Publications” webpage, located at
Scroll down to the “Tax Forms andInstructions” section and look for formFTB 3520.
Call FTB toll-free from withinthe United States at 1-800-338-0505. If you are outside the United States,call 1-916- 845-6600. This is not atoll-free call.
Write FTB
: Write FTB at:Tax Forms Request UnitP O Box 307Rancho Cordova, CA 95741-0307
Power of Attorney Facts Available 
Muni Bond Interest
California Taxes Interest Income Earned on Municipal Bonds Issued Elsewhere 

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