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J A N U A R Y 1 9 9 9

Welcome to e-file Inside ...


2 ... FTB Refunds SDI
Overpayments
2 ... Assessment Notices Available
by Fax
2 ... Renter’s Credit Returns as
Nonrefundable Credit
3 ... When Married Taxpayers
Divorce
3 ... Changing an Address? Use
Form FTB 3533
4 ... Are Club Dues Deductible?
Not Always
4 ... Activity, Membership, Dues,
Help Define Clubs
4 ... FTB, IRS Open New Tax Store
in Milpitas
4 ... Modified Instructions for S
Corporation Filers
5 ... Tax Form Corrections
Announced
5 ... FTB Calendar
6 ... California’s e-file Tops
Milestone
6 ... FTB Offers e-pay Option
7 ... FTB Developing 1099
TestWare
8 ... Schedules K-1: Five Reasons
Not to File on Paper
Tina Stiles, an analyst with FTB’s Processing seminar held November 16, 1998, in
8 ... Regulations Relax Water’s-
Services Bureau, assists Daniel J. Caminata Sacramento. California’s e-file program is Edge Criteria
(standing) and Andrew R. Smith, with their growing. To find out why, please see the 9 ... Practitioner Awareness Deters
e-file applications during an IRS/FTB e-file story on page 6. (FTB photo by Dan Chan.) Fraud
9 ... Satisfy Educational Needs With
Video Courses
10 ... Claiming Head of Household?
Renter’s Credit Returns to California 10 ... Stumped by Head of
Household Questions?
Californians who rent their primary residence returns, heads of household, and surviving 11 ... Keep Tax News Coming
and owe taxes are now eligible to receive a spouses, if their adjusted gross income (AGI) 11 ... Are your 1998 Tax Forms
Approved?
nonrefundable credit when they file their 1998 is $50,000 or less. 12 ... 1998 Tax News Index
California income tax return. A credit of $60 is allowed for individual 15 ... FTB Helps Taxpayers Report
The renter’s credit was reinstated, by statute, taxpayers who file single or married filing Changes
effective January 1, 1998 after being separate returns if their AGI is $25,000 or 15 ... Free Seminars For Businesses
suspended for tax years 1993 through 1997. less. and Taxpayers
Assembly Bill 2797 amended the existing Since the renter’s credit is a nonrefundable
renter’s credit to allow a nonrefundable credit credit that can only be used against a tax
amount of $120 for married filing joint liability, a taxpayer must have a tax liability to
claim it.

CONTINUED ON PAGE 2
Page 2

FTB Refunds SDI Overpayments


The Franchise Tax Board, in • Worked for two or more employers
Volume 99-1 January 1999 collaboration with the Employment during the 1997 tax year.
TAX NEWS is a bimonthly
Development Department, issued refunds • Received more than $31,767 in
publication of the Communications to taxpayers who overpaid their State California wages from the combined
Services Bureau, California Franchise Disability Insurance, but failed to claim employers.
Tax Board. Its primary objective is to the amount on their 1997 California
provide information to income tax income tax returns. • Received a W-2 from each employer
professionals about state income tax showing the amount of SDI withheld.
laws, regulations, policies and The first refunds were mailed on
procedures.
December 30, 1998. FTB expects to • Had a total amount of more than
Members of the Board: issue more than 160,000 refunds to $158.84 withheld from the combined
eligible taxpayers. employers during the 1997 tax year.
Kathleen Connell, Chair
State Controller In order to qualify, the taxpayer must
Johan Klehs have met these requirements:
Chair, State Board of Equalization
B. Timothy Gage
Director, Department of Finance
Assessment Notices Available by Fax
———————— Your client has lost the Notice of • Your telephone number.
Executive Officer: Proposed Assessment from the Franchise
Gerald H. Goldberg • A copy of your Power of Attorney.
Tax Board and asks for your help. You
Editor: need a copy. FTB will send you a copy of the proposed
Marvin Meek assessment, by fax, within seven days.
You can get a copy by fax from FTB.
To update or correct your address or Send a request by fax to FTB’s Electronic If you do not receive a copy after seven
to subscribe to TAX NEWS (send $12 Correspondence Unit at (916) 845-6377 days or if you have questions, please
for a one-year subscription), write: contact the FTB Tax Practitioner Support
TAX NEWS with the following information:
PO Box 2708 Unit at (916) 845-7057.
Rancho Cordova, CA 95741-2708 • Your request for a copy of the
or call: (916) 845-7070. proposed assessment.
To view TAX NEWS on the Internet • Your fax number.
or to request an electronic mail
subscription, contact FTB on the
Internet:
www.ftb.ca.gov Renter’s Credit Returns as Nonrefundable Credit
For information about a client’s
account, contact:
CONTINUED FROM PAGE 1 • The taxpayer did not live with
Tax Practitioner Support Unit Taxpayers must meet this criteria in order another person (such as a parent)
(916) 845-7057 (phone) to qualify for the credit: who claimed him or her as a
(916) 845-6377 (fax)
• Their California AGI cannot exceed dependent in 1998.
For recorded answers to questions on $25,000 if their filing status is single • The taxpayer is not a minor living
California taxes, to order forms or or married filing separate; or $50,000
check on a refund, call: with and under the care of a parent,
F.A.S.T. (800) 338-0505 if their filing status is married filing foster parent or legal guardian.
From outside U.S. (916) 845-6600 joint, head of household, or qualified
widow or widower. • The taxpayer rented property that
To send a facsimile about a client’s was not exempt from California
account, transmit to:
Electronic Correspondence property tax in 1998.
(916) 845-6377 Refer to the “Nonrefundable • The taxpayer or spouse did not claim
—————————-
Information Center: Renter’s Credit Qualification a homeowner’s property tax
(800) 852-5711 exemption anytime during 1998.
From outside U.S. (916) 845-6500 Tax Record” in the 1998
Income Tax Booklet. For additional information about how to
Hearing Impaired: qualify for renter’s credit, refer to the
TDD (800) 822-6268
__________________ “Nonrefundable Renter’s Credit
• Taxpayers must have rented property Qualification Tax Record” in the 1998
FTB on the Internet in California for use as their principal California Resident Personal Income Tax
www.ftb.ca.gov
residence for at least half the year in Booklet.
1998.

January 1999
Page 3

When Married Taxpayers Divorce Changing an


Be Sure to Tell FTB How to Apply Payments Address?
The Franchise Tax Board applies any th
In Gordon v. United States (11 Cir. Use Form
estimated tax payments existing on an 1985) 757 F.2d 1157 the court found that
account to the first tax return processed. “a policy which would require the FTB 3533
This policy can have an adverse impact Commissioner to delay refunds until after
on married taxpayers who divorce, or any audits were made would be economically Taxpayers who have changed
couples that begin to file separately after burdensome, and is certainly not required their home or business
they have jointly filed estimated tax by statute.” mailing address, or their
payments. There are steps that taxpayers can take to business location, may now
For example: Mr. and Mrs. Taxpayer lessen the harm from this policy. FTB use form FTB 3533, “Change
make three estimated tax payments during will make every effort to eliminate or of Address.”
1998. They then file for divorce and they reduce the policy’s adverse impact on a This form is very similar to
each file a separate return for the 1998 tax divorced or separated taxpayer if the federal Form 8822, “Change
year. Mr. Taxpayer files his return in department is put on notice that of Address.”
February 1999 and claims all of the competing claims exist. Generally, taxpayers need
estimated tax payments as a credit against Tax practitioners can help by advising complete only one form FTB
his tax liability. FTB will process Mr. their clients to notify FTB, in writing, of 3533 to change their home
Taxpayer’s return and apply the credits as any divorce agreements or court ordered and business addresses.
requested. This might include a refund of settlements that have been filed with the However, if the change also
any excess payments available on the court regarding their California taxes. affects the mailing address for
account. their children who filed
If FTB is notified before the tax filing
If Mrs. Taxpayer subsequently files a season, the taxpayers’ joint estimated tax separate returns, complete a
return in March 1999 and claims the same payments can be allocated accordingly. separate form FTB 3533 for
estimated payments, she will be advised In the absence of a formal court order, each child.
that there are no payments available on FTB will accept a statement showing the If you are a representative
her account. allocation of the payments along with the filing for the taxpayer, attach
While this policy may not seem fair to the notarized signatures of both taxpayers. a copy of your power of
disadvantaged spouse who clearly has an Send the statement to: attorney to the change of
interest in her share of the estimate Joint Estimate Credit Allocation address form.
payments, it is impossible for FTB to M/S F-225 Form FTB 3533 is available
keep track of the marital status of its at FTB’s www.ftb.ca.gov
customers. Taxpayer Services Center
Franchise Tax Board Internet address, or you can
The courts have also recognized the PO Box 942840 write to:
difficulty faced by tax agencies in this Sacramento CA 94240-0040 Tax Forms Request
th
regard. In Warner v. Commissioner (9
Cir. 1973) 526 f.2d 1, the court noted that Franchise Tax Board
the government, “confronted by millions PO Box 307
of returns and an economy which
Rancho Cordova, CA
repeatedly must be nourished by quick
refunds, must first pay and then look.” 95741-0307
Page 4

Are Club Dues Deductible? Not Always


Whether you’re an individual filer or a when you file your California return. For
corporation, you cannot deduct business individuals, the expenses are added back
expenses for expenditures in any club that on line 12, line 17 or line 18, column C,
restricts membership or the use of its of Schedule CA 540, “California
services or facilities on the basis of age, Adjustments For Residents,” or Schedule
sex, race, religion, color, ancestry or CA 540NR, “California Adjustments For
national origin. Nonresidents or Part-Year Residents.”
Expenses include club membership dues For corporations, the expenses are added
and assessments, food and beverage back on line 7 of form FTB 100,
expenses, expenses for services furnished “California Corporation Franchise or
by the club and reimbursements or salary Income Tax Return,” or line 7 of form
Modified adjustments to officers or employees for FTB 100S, “California S Corporation
any of these expenses. (See California Franchise or Income Tax Return.”
Instructions for Revenue and Taxation Code Sections For more information on how to file, refer
17269 and 24343.2.) to FTB Pub. 1001, “Supplemental
S Corporation If you made payments to a club that Guidelines to California Adjustments.”
Filers discriminates and then deducted the
expenses on your federal return, the
For more information about clubs, see the
related article entitled “Activity,
disallowed business expense deductions Membership, Help Define Clubs.”
The Franchise Tax Board has must be added back into your income
discovered that the recently
redesigned California
Worksheets for form FTB
3801, “Passive Activity Loss
Activity, Membership, Help Define Clubs
Limitations,” do not adapt Unsure whether your club is really a club? which belong to the members and which
well to reporting passive The legal definition of “club” can be sells alcoholic beverages only to its
income and loss for found in the California Business and members and its bona fide guests.”
S Corporations. Professions Code, under Division 9,
Consequently, FTB suggests Clubs defined in the California Business
commencing with Section 23000. and Professions Code Section 23425, as
that when filing the 1998
Form FTB 3801, A club is defined as “a corporation or American national fraternal organizations,
S Corporations should use association which is the owner, lessee or are not included in the definition of clubs
and file the 1997 version of occupant of an establishment operated for purposes of applying the restrictions
the California Worksheets. solely for objects of a social or athletic imposed by Revenue and Taxation Code
nature but not for pecuniary gain, having Sections 17269 and 24343.2. For more
a bona fide membership list and the information, refer to California Business
majority of the members of which pay and Professions Code Division 9,
dues at least once in every year, and the commencing with Section 23000.
property as well as the advantages of

FTB Joins IRS at Tax Store in Milpitas


The Franchise Tax Board is participating Taxpayers can obtain tax forms and
in the Internal Revenue Service’s (IRS) information, use available auto-dialers to
prototype tax store in the Great Mall of contact FTB and IRS telephone centers,
the Bay Area located in Milpitas. and meet with staff from both agencies.
FTB’s hours of operations during the The tax store concept stems from the IRS
1999 filing season will be Monday report, “Reinventing Service at the IRS,”
through Friday, 10 a.m. to 7 p.m.; and addresses the issue of ways to
Saturday, 10 a.m. to 4 p.m.; and Sunday, improve customer service. Other federal,
11 a.m. to 4 p.m. state, and local government agencies may
The tax store has five kiosks equipped participate in future tax stores.
with agency databases and touch screen
access to FTB and IRS Web sites.

January 1999
Page 5

Tax Form Corrections Announced FTB Calendar


Tax practitioners should note the Form 565, Partnership Return of January
following corrections to 1998 tax form Income, Side 3, Schedule K (565),
information that has already been column (b) and column (c): • Demands to file 1997 tax
returns are mailed to
distributed: • Line 13(a)(1) through line 14; individuals.
Form 100S, California S Corporation • Line 16b; and • Package X is published
Franchise or Income Tax Return, Side and distributed.
4, Schedule M-2, column (c), lines 3 • Line 22.
15 Fourth quarter 1998
and 5. Clarification: The above-mentioned lines personal income tax
Correction: Side 4, Schedule M-2, should be shaded. estimate payments are
column (c), lines 3 and 5 should not be due.
The error is in the paper version of the
shaded. Shading should be added to Package X and the single-copy version. 19 FTB e-file return
column (c), line 7. The Internet version, CD-ROM (release 1 transmissions begin.
This error is in the paper version of the of 2) version of the Package X and the 20 Previous month
Package X only. All other versions are Form 565 Booklet version are correct. withholding at source
payments are due if total
correct. Form 568, Limited Liability Company withholding exceeded
Instructions for Form 109, California Return of Income, Side 3, Schedule K $2,500.
Exempt Organization Business Income (568), column (b) and column (c): 31 Deadline for applying to
Tax Return, page 2, Section F, “When to • Line 13(a)(1) through line 14a; participate in California’s
File,” reads: “However, education IRAs e-file program.
must file Form 109 on or before the 15th
• Line 16b; and
February
day of the 5th month after the end of the • Line 22.
• Notices of Proposed
income year.” Correction: The above-mentioned lines Assessments are mailed
Correction: The information is incorrect. should be shaded. to corporations that failed
The entire sentence should be deleted. to comply with requests
The error is in the paper version of the issued in prior months for
This error is in the paper version of the Package X and the Form 568 Booklet. 1996 tax returns.
Package X only. All other versions are The Internet version, CD-ROM
(release 1 of 2) version of the Package X • Notices of Proposed
correct. Assessments are mailed
and the single-copy version are correct. to individuals who have
Form 541-ES, Estimated Tax for
Fiduciaries, Estimated Tax Worksheet, Instructions for FTB 3521, Low- not filed their 1997 tax
line 9b reads: “Enter 100% of the . Income Housing Credit, Side 2, third returns.
. .Form 541.” column, second paragraph, next to last 20 See January 20.
sentence reads: “This credit cannot reduce March
Correction: The line should read: “Enter
. . . .”
100% of the . . .Form 541 (105% of that • Notices of Proposed
amount if the estate’s or trust’s AGI on Correction: The information is incorrect. Assessments are mailed
that return is more than $150,000, and The instructions should read: “This credit to corporations that failed
less than 2/3 of gross income for 1998 or can reduce . . . .” to comply with requests
1999 is from farming or fishing).” issued in prior months for
The error is in the paper version of the 1996 tax returns.
The error is in the paper and CD-ROM Package X and the single-copy version.
• Notices of Proposed
(release 1 of 2) versions of the Package The Internet version and CD-ROM Assessments are mailed
X, the Form 541 Booklet and the (release 1 of 2) version of the Package X to individuals who have
single-copy version. The Internet version are correct. not filed their 1997 tax
is correct. The CD-ROM (release 2 of 2) returns.
version of the Package X will be correct. 20 See January 20.
CONTINUED ON PAGE 7
April
15 1998 personal income tax
returns are due.
15 First quarter 1999
personal income tax
estimate payments are
due.
20 See January 20.
Page 6

MAKING THE SWITCH


1994 345 (piot year)

1995 159,000

1996 240,000

1997 366,000

1998 846,000

More than 1.1 million taxpayers filed their California tax returns electronically in 1998. Taxpayers who filed elec-
tronically through a tax practitioner or filed from their home computer using a third-party transmitter accounted for
846,118 returns in 1998. Taxpayers who used TeleFile accounted for another 299,225 electronic returns.

FTB California’s e-file Tops Milestone


demand for e-file in 1999 because of the
Offers e-pay Direct Deposit Refund direct deposit program and increased
Option Option Attracts More marketing by FTB.
Taxpayers to Program “We’ve already experienced an increase
in the number of practitioners signing up
for the e-file program,” she added.
For the 1998 tax year, the A year ago, the Franchise Tax Board
Franchise Tax Board is hoped that Californians would file one Direct deposit allows taxpayers to have
offering an electronic million paperless state tax returns in their tax refunds deposited directly into
payment (e-pay) option to 1998. their bank accounts and is only available
taxpayers who file electronic with e-file. With direct deposit, the tax
Californians did more than just meet that refund will normally be deposited in the
returns with balances due. milestone. They exceeded it. More than taxpayer’s bank account within 5-7
With the new option, an 1.1 million taxpayers filed their California banking days from the date FTB
e-filer with a balance due may tax returns electronically in 1998 and the acknowledges receipt of the e-file return.
authorize FTB to debit his or outlook for 1999 is a favorable one. Direct deposit is available to nearly all
her bank account on a The number of taxpayers who either filed taxpayers who use e-file, including first-
specified date for the amount electronically through a tax practitioner or time filers.
due. Now, not only can your filed from their home computer using a
clients e-file, but e-pay also, In addition to filing electronically,
third-party transmitter grew significantly taxpayers must also meet the following
eliminating the need to mail a in 1998. Their numbers grew from
check and form FTB 3582, criteria in order to use direct deposit:
365,743 returns in 1997 to 846,118 in
“Payment Voucher for 1998, an increase of more than 130 • The return must not contain any
Electronically Transmitted percent. errors that would change the refund
Returns,” by April 15. amount or generate a Return
Taxpayers who used TeleFile accounted Information Notice from FTB.
for 299,225 returns in 1998, an increase
of 36 percent over 1997’s total of • The refund cannot be offset for state
220,125. taxes, federal taxes or other
obligations.
TeleFile is another paperless return
program that allows certain taxpayers to For more information about how to join
file their California tax return by the e-file program and take advantage of
telephone. direct deposit, contact the e-file Help
Desk at (916) 845-0353. Help Desk
According to Alison Adams, lead analyst hours are 8 a.m. until 5 p.m., Monday
in FTB’s Electronic Document Services through Friday.
Unit, tax practitioners will see a greater

January 1999
Page 7

Tax Form Corrections Announced FTB Developing


CONTINUED FROM PAGE 5
1099 TestWare
Form 5806, Underpayment of
Instructions for FTB 3805Z, Enterprise Estimated Tax by Corporations, Side 2, Filing information returns via
Zone Booklet, page 10, column 3, line 2, line 56 and line 57, column (d). magnetic media can save you
second line reads: “Enter the amount from Correction: The information should be time and money, but even
line 2, column (b) . . .” shaded. magnetic media loses its
Correction: The information is incorrect. The error is in the paper version of the effectiveness when your files
It should read: “Enter the amount from Package X only. All other versions are have to be returned and
line 2, column (f) . . . .” correct. resubmitted due to file format
errors.
The error is in the paper version of the Instructions for Schedule P (540NR),
Package X only. All other versions are Alternative Minimum Tax and Credit That’s why the Franchise Tax
correct. Limitations – Nonresidents or Part- Board is developing “1099
Year Residents, page 4, column 2, 5th TestWare” for its information
Instructions for FTB 3805Z, Enterprise return magnetic media filers.
Zone Booklet, page 14, column 1, Line line from the bottom reads: “Enter your
itemized deductions from Schedule CA The TestWare will be
11-Line 12, eighth line reads: “Multiply available by the end of
the gain or loss reported . . . line 4 . . .” (540NR), line 40.”
January.
Correction: The information is incorrect. Correction: The information is
incorrect. It should read: 1099 TestWare is free
It should read: “Multiply the gain or loss software that enables you to
reported . . .line 5 . . .” “Enter your itemized deductions from
Schedule CA (540NR), line 39.” test your data files before
The error is in the paper version of the submitting them to FTB.
Package X only. All other versions are The error is in the paper version of the
Package X only. All other versions are First, 1099 TestWare
correct. performs a pre-edit check on
correct.
FTB 5805F, Underpayment of your file to ensure that it is in
Estimated Tax by Farmers and Schedule P (541), Alternative a format that can successfully
Fishermen, line 15 reads: Minimum Tax and Credit pass FTB’s mainframe edit
“Penalty . . . x .08% x Limitations – Fiduciaries programs. The software
underpayment . . . .” • Side 2, line 9a, line 9b and 9c. identifies problem areas that
may prevent speedy
Correction: The information is incorrect. Correction: The information is processing.
It should read: incorrect.
“Penalty . . .x .08 x underpayment . . .” Line 9a should be line 9. Lines Besides reviewing data sets
The percent sign should be deleted. 9b and line 9c should be deleted. for structural correctness, the
software also performs data
The error is in the paper version of the • Side 2, line 10 reads: “Subtract line integrity edits and verifies
Package X and the single-copy version. 9c from line 8 . . . .”
calculated totals on the “C,”
The Internet version and CD-ROM Correction: The information is incorrect. “K,” and “F” records of the
(release 1 of 2) version of the Package X It should read: “Subtract line 9 from line file. However, the software
are correct. 8 . . . .” will not verify the correctness
Form 5806, Underpayment of The errors are in the paper version of the of the data. Once the file has
Estimated Tax by Corporations, Side 1, Package X only. All other versions been edited and corrected,
line 22a reads: are correct. you can send it to FTB.
“Add amounts . . .line 17 . . . .” For more information about
Instructions for Schedule P (541),
Correction: This information is Alternative Minimum Tax and Credit the 1099 TestWare, contact
incorrect. It should read: Limitations – Fiduciaries, page 5, the Magnetic Media Unit at
“Add amounts . . .line 18 . . .” Tentative Minimum Tax reads: (916) 845-3778. Or visit our
The error is in the paper version of the “Line 9a” Web site entitled "Frequently
Package X only. All other versions Asked Questions About
Correction: The information is incorrect. Information Returns (Forms
are correct. It should read: “Line 9” 1098, 1099 series, 5498, W-
The error is in the paper version of the 2G) - Your Reporting
Package X only. All other versions are Questions Answered." To
correct. access the Web site, go to
www.ftb.ca.gov, and type
"information returns" into the
search engine.
Page 8

Regulations Relax Water’s-Edge Criteria


Invalidated Elections Receive Second Chance
Taxpayers whose water’s-edge elections • The taxpayer checks the water’s-edge
were either invalidated or placed under election box on the return.
review by the Franchise Tax Board are • The taxpayer files a form FTB 1117,
receiving a second chance as a result of “Request to Terminate a Water’s-
amended regulations that went into effect Edge Election,” before
in October 1998. January 1, 1997 and the completed
Schedules K-1: Retroactive amendments to the water’s– form contains enough information to
Five Reasons Not edge election regulations, specifically identify the beginning year of
sections 25111 and 25111-1, have relaxed the contract.
to File on Paper the strict criteria that previously had to be • For income years beginning before
met in order for a water's-edge election to January 1, 1994, the taxpayer files a
Partnerships with many be considered valid.
partners now have five good domestic disclosure spreadsheet.
reasons to stop filing paper Consequently, in October, FTB began The spreadsheet will be considered
Schedules K-1. sending notices to taxpayers whose objective evidence as long as it was
elections were previously “invalidated” or filed before January 1, 1997.
The first four reasons for under review to explain the status of their
eliminating paper Schedules The common parent election has been
elections under the new regulations. modified. Previously, a common parent
K-1 are :
Taxpayers who are considered to have election could be invalidated if one of the
• CD-ROMS, valid water’s-edge elections under the members filed a separate worldwide
• Diskettes, amended regulations are required to file return.
• Magnetic tape and on a water’s-edge basis for the duration of A common parent election now
their election terms. constitutes an election by all the members
• Tape cartridges.
Here are the most significant changes included within the commonly controlled
The fifth reason is a new, free made to the regulations: water’s-edge group, regardless of whether
software program for editing one of the members filed a separate
the schedules. The TestWare A "substantial performance" test has
been added. If a taxpayer fails to comply worldwide return.
program allows partnerships
to edit K-1 files on diskettes with a procedural or statutory election The definition of an original return has
before sending them to FTB. requirement (e.g. failing to attach a been clarified. If a taxpayer filed more
In the past, files that failed contract to their original return), the than one return before the due date (or
FTB’s mainframe edit water’s-edge election will still be before the extended due date, if no return
program were returned to considered valid as long as there has been was filed by the original due date), the
partnerships for correction. "substantial performance" of the election last such return filed will be considered
Now partnerships can test requirements. the original return for purposes of the
files before sending them. Substantial performance exists when the election.
To obtain the free software, tax is computed on a water’s-edge basis The taxpayer must still make the water’s-
download it from FTB’s and there is additional "objective edge election or meet the substantial
www.ftb.ca.gov Web site. evidence" to support the conclusion that performance criteria on the original
Click on “Electronic the group intended to make a water’s- return.
Services” and then on edge election. Some examples of Deemed termination upon acquisition of
“Businesses - Filing/ objective evidence include: a taxpayer with a previously invalidated
Payments.” Or call the • The taxpayer has attached one of the election. A taxpayer that becomes unitary
electronic filing Help Desk at water’s-edge forms (e.g. form FTB with a water’s-edge electing taxpayer will
(916) 845-0353 between 1116, “Notice of Nonrenewal of also become bound by that water’s-edge
8 a.m. and 5 p.m. Water’s-Edge Contract,” or form election (although a request for
FTB 2416, “Retained Earnings of termination of the election may be filed
Controlled Foreign Corporations,” to under certain circumstances).
the original return).
• The taxpayer included a statement on
the return indicating that a water’s-
edge election was being made.

CONTINUED ON PAGE 9

January 1999
Page 9

Practitioner Awareness Deters Fraud


California taxpayers demand that tax CTEC, advising them of the requirements
practitioners are qualified to prepare tax and urging them to register with CTEC.
returns properly. FTB will keep a copy of the letter and will
The Franchise Tax Board’s Fraud send copies to the IRS and CTEC.
Prevention and Detection Group is Attorneys, certified public accountants,
encouraging tax practitioners to use enrolled agents and designated bank Satisfy
education to help meet this demand. officials are exempt from these
During their routine site visits in 1998, requirements due to their own industry Educational
regulations.
the Fraud Prevention and Detection
Group saw an increase in the number of According to the Fraud Prevention and
Needs With
tax practitioners who lacked the Detection Group, unregistered tax Video Courses
qualifications required by California law practitioners are responsible for most of
for preparing tax returns for the public. the fraudulent activity in the tax Need continuing education
“We conducted over 300 site visits and practitioner industry. This includes the credits? Prefer to study in
found that one out of every four tax sale and use of unauthorized tax return your home or office?
practitioners we visited was not in preparation software. Delays in
processing occur when practitioners use The Center for Tax Education
compliance with the qualification (CTE) offers three, three-
requirements,” said Andrew Erias, a fraud forms that do not meet FTB’s
requirements. In some cases, FTB is not credit video courses that can
analyst at FTB. help satisfy your education
able to process the forms at all and has to
Sections 22250-22259 of the California contact taxpayers directly. “This is a requirements.
major disservice to taxpayers who are Course titles include “Office-
“Unregistered tax practitioners expecting their refunds,” said Erias. In-Home Deductions,”
are responsible for most of the For more information about CTEC, “California’s Employment
contact them at (916) 492-0457. For Factors” and “California Tax
fraudulent activity.” Rules for Nonresidents.”
more information about FTB's Fraud
Business and Professions Code state that Prevention and Detection Program, The programs are presented
tax practitioners must: contact the Tax Practitioner Support Unit by CTE, a partnership of the
by phone at (916) 845-7057 or by sending School of Business
• Be a minimum of 18 years of age them a fax at (916) 845-6377. Administration, California
with a high school diploma. State University, Sacramento;
• Post a $5,000 surety bond. the Internal Revenue Service;
• Complete an initial 60 hours of basic the Employment
personal income tax instruction. Development Department; the
• Maintain 20 hours per year of
Water’s-Edge State Board of Equalization
CONTINUED FROM PAGE 8 and the Franchise Tax Board.
continuing income tax education.
However, the amended regulations Each course contains a one-
• Register with the California Tax contain a special provision that applies hour videotape, textbook,
Education Council (CTEC). when a taxpayer whose election had been workbook and a brief, open
CTEC registration plays an important role invalidated by FTB is acquired by a non- book examination for three
in tax practitioner education. Created in electing, non-affiliated entity and credits. Each course costs
1997 by Senate Bill 1077, CTEC is a thereafter files on a non-water’s-edge $60.
non-profit organization responsible for basis. To order any of the courses,
the administration of tax practitioner If the amended regulations cause the call (916) 845-7070, or visit
education requirements. Each year, acquired taxpayer’s water’s-edge election FTB’s CTE Web site at
CTEC issues education completion to be valid, that election will be deemed www.ftb.ca.gov/education/
certificates to practitioners who meet their to terminate as of the time that the Taxtalk.htm.
annual education requirements. taxpayer was acquired.
Beginning in 1999, the Fraud Prevention Note however, that this provision only
and Detection Program Group will work applies to elections made for income
with CTEC and the Internal Revenue years ending on or before January
Service (IRS) to ensure that tax 31, 1997 and only if both the acquisition
practitioners are aware of the legal and the subsequent non-water’s-edge
requirements for preparing tax returns in filing occur before the effective date of
California. They will send letters to tax the regulation amendments.
practitioners who have not registered with
Page 10

Claiming Head of Household?


Household Filing Status Information,” for
Here are Common the definition of the term “considered
unmarried.”)
Errors to Avoid Non-relatives may not be a qualifier.
Stumped by Head Each year, approximately 1.7 million
Taxpayers commonly list cousins as a
qualifying relative for claiming the HOH
of Household California taxpayers claim the Head of
filing status. Cousins are descendants of
Household (HOH) filing status. Below
a brother or sister of the taxpayer's
Questions? are the most common errors made by
parents and do not qualify as a relative for
taxpayers in claiming the filing status.
Attend HOH claiming this filing status. Taxpayers also
The errors are listed in order of highest
sometimes consider a person a relative
occurrence.
Workshop simply because the person is a member of
Individual claimed as the “qualifier” the household, such as a friend or a
did not live with taxpayer for more friend's child. Even if the taxpayer is
Franchise Tax Board’s Head than half the year. The individual who providing a home and support for this
of Household (HOH) qualifies the taxpayer to claim the HOH individual, the individual may not qualify
Program will conduct filing status must have lived with the the taxpayer for the HOH filing status. A
workshops throughout taxpayer for more than half the year. non-related child must be a foster child or
California in 1999. The More than half the year is 183 days; in a an adopted child to be considered a
workshops are geared at leap year, it is 184 days. Anything less qualifying individual.
helping practitioners to better disqualifies the taxpayer from using the
HOH filing status. Taxpayers also need Qualifying individual not a dependent.
understand the HOH filing The taxpayer's qualifying individual did
status. Workshop topics will to note that this differs when the
not meet the criteria to be considered the
include an HOH program qualifying individual is a foster child.
taxpayer's dependent. There are five tests
overview, an explanation of The foster child must have lived with the
the qualifying individual must meet in
the qualification criteria for taxpayer for the entire year.
order to be claimed as a dependent. If all
using the HOH filing status Lived with spouse the entire year or five tests are not met, the taxpayer will
and a discussion about during last six months of year. not qualify for the HOH filing status. The
important questions that Taxpayers whose correct filing status FTB Pub.1540 provides information
practitioners should ask their should have been "Married Filing Joint" about each of these tests:
clients who file HOH. have often incorrectly used the HOH
filing status. In the majority of cases, the • Relationship or Member of
For additional information Household Test
about HOH workshops in taxpayer did not have a clear
your area, contact FTB’s understanding of the term "head of • Citizenship Test
HOH Unit at (916) 845-6874 household." The taxpayer perceives the • Joint Return Test
HOH filing status to mean the head of his
or (916) 845-6265.
or her family. If the taxpayer lived with • Gross Income Test
his or her spouse the entire year or at any • Support Test
time during the last six months of the The Franchise Tax Board continues to
year, the taxpayer does not qualify for the improve its tax forms instructions to help
HOH filing status. taxpayers understand the HOH filing
May not qualify with dependent parent status. Major revisions have been made
or relative unless legally divorced or to the FTB Pub.1540, including the
legally separated by end of year. This addition of self-tests to help taxpayers
primarily occurs with married taxpayers determine if they qualify for the filing
who are living apart from their spouses status. The FTB Pub.1540 also contains
and claiming a parent or relative as their definitions for terms used in the filing
qualifying individual. The parent or instructions.
relative is not a valid qualifier unless the To order a copy of the FTB Pub. 1540,
taxpayer is legally divorced, legally call 1-800-338-0505.
separated or met the requirements to be
considered unmarried by December 31 of CONTINUED ON PAGE 11
the year. (See FTB Pub.1540, “Head of

January 1999
Page 11

Are Your 1998 Tax Forms Approved?


If you are planning to use scannable or Republic Service Bureau
substitute 1998 California tax forms, (310) 978-6000
make sure your forms meet the Franchise Resource/Phoenix Inc.
Tax Board’s requirements. (415) 485-4500
If they do not, delays may occur during SS&C Technologies
processing. In some cases, FTB may not (312) 443-1316
be able to process your clients’ forms and
will have to contact them directly. Stallion Software, Inc.
(513) 936-9771
All companies that produce or sell
substitute or scannable California tax Tax Forms, Inc.
forms must file an agreement to comply (Telephone number not available)
with FTB requirements for the 1998 tax The Northern Trust Company
year. Form FTB 1096, “Agreement to (CONTINUED ON PAGE 16)
Comply with FTB Publication 1098,”
states that the company agrees to follow
Keep
certain rules for developing scannable
and substitute forms.
HOH Errors Tax News
CONTINUED FROM PAGE 10
To order a copy by mail, write to:
Coming
The November Tax News Tax Forms Request Unit
Is your Tax News
contains a list of companies Franchise Tax Board subscription about to expire?
that have already filed PO Box 307 If so, the Franchise Tax
forms FTB 1096 with FTB. Rancho Cordova, CA 95741-0307 Board will send you a
renewal form by mail. Be
The FTB Pub.1540 is also available
sure to return the form
through the FTB Web site at
The November Tax News contains a list immediately so that you will
www.ftb.ca.gov. Click on “Tax Forms”
of companies that have already filed not miss any upcoming issues.
and then go to “Miscellaneous California
forms FTB 1096 with FTB prior to Remember: Tax News is also
Forms, Instructions and Publications.”
November. Refer to the November issue available by e-mail at no
for additional information about how to HOH filing status information is now
charge and it can be viewed
ensure that your forms have been available on CD-ROM. The disk includes
on FTB’s Web site at
approved for the 1998 tax year. interactive versions of the FTB Pub. 1540
www.ftb.ca.gov.
self-tests. At the end of each test, you are
Below is a list of companies that filed If you have any questions
informed if you qualify for the HOH
forms FTB 1096 with FTB after about your Tax News
filing status.
October 31 1998: subscription, call
To use the disk, you will need a computer
2nd Story Software (916) 845-7070.
with Microsoft Windows 95. To obtain a
(319) 373-3600
copy of the disk, contact the FTB HOH
5227 Tax Systems Inc. Program through any of the following
(626) 578-1978 methods:
ABC Tax Fax: (916) 845-6756
(800) 683-7094
Mail: Head of Household Unit
California Chamber of Commerce
Franchise Tax Board
(925) 299-1930
PO Box 1998
National Computer Print, Inc.
(205) 849-5200 Rancho Cordova CA
PLM International Inc . 95741-1998
(800) 227-0830 You can also contact FTB’s Head of
PriceWaterhouseCoopers Household Unit by calling Lonette
(Telephone number not available) Maiden at (916) 845-6874, or Peggy
Willis at (916) 845-6265.
Prudential Securities, Inc.
(Telephone number not available)
Page 12

Calendar FTB Expands Direct Deposit -


November, p. 4.
1998 FTB Calendar - January, March, May, July,
September, November, p. 5.
California Conformity
Who Gets Direct Tax Refund Deposits? - July,
p. 8.
FTB Follows IRS “LIFO” Procedure - Disaster Areas
Tax News September, p. 3.
New Rules for Excluding Gain in Home Sale -
January, p. 11.
Forty Counties Qualify as El Nino Disaster
Areas - May, p. 10.
President Declares Disaster Areas -

Index Who Qualifies to Exclude Home Sale Gain? –


March, p. 3.
Roth IRAs: California Conforms -
March, p. 11.
Thirty-one Counties Are Disaster Areas -
March, p. 11.
March, p. 6. e-file
California Franchise Tax Board Balance Due Electronic Filers Received
Andal is New Board Member - March, p. 3. Notices in Error - May, p. 3.
Goldberg Named Outstanding Public e-file Seminars Are Free - September, p. 11.
Administrator - July, p. 8. e-Filing: Slowly, Surely Making Gains - July,
Keeping in Touch with FTB - May, p. 9. p. 9.
California Tax Forms/Software e-file Seminar Schedule - July, p. 9.
A Tough Assignment: Making Tax Forms Electronic Filing Application Deadline
More Likable - September, p. 1. Extended - January, p. 6.
Change of Address? Use New Form - Electronic Filing Calendar - March, p. 9,
November, p. 4. May, p. 9.
Forms Producers Need FTB Approval - Electronic Filing: Check the Net - March,
November, p. 6. p. 8.
Need a Tax Form Fast? - January, p. 9, Electronic Filing in 2001 - March, p. 8.
May, p. 14. EROs: Send IRS Only One e-filing
Tax Form Clarification Announced - Declaration - September, p. 3.
March, p. 7. FTB, IRS to Hold Free E-file Seminars -
Compliance July, p. 9.
1995 Corporation Tax Returns Sought - Need Electronic Filing Help? - May, p. 18.
May, p. 8. Electronic Filing: Two-Year Review -
Avoid Penalties, Respond to Corporate Filing May, p. 7.
Notices - November, p. 6. Electronic Filing Update - May, p. 7.
Better Late Than Never: File 1996 Returns - Electronic Filing Volumes - January, p. 7.
January, p. 11. One Million Paperless Returns? -
Corporations Fail to File for 1995 - January, p. 7.
March, p. 2. Register for Free e-file Seminars -
Fax Personal Income Tax Collection Queries - November, p. 4.
May, p. 20. Some Electronic Filers Forget to Send Check -
Filing Returns Without Filling Them Out - March, p. 9.
September, p. 10. Tax Return Errors Decrease as e-filing
Finding Taxpayers on the Move - July, p. 7. Increases - July, p. 1.
FTB Identifies 1997 Nonfilers - November, Two Reminders for Electronic Filers -
p. 6. January, p. 7.
Incorporation Triggers First Tax Return Filing Why and How to File Electronically - March,
- September, p. 6. p. 1.
FTB Uses New Program to Find Nonfilers - e-pay
November, p. 10. First e-file, Now e-paying - September, p. 12.
Some Taxpayers Need to File 1996 Returns - Electronic Funds Transfer
May, p. 19.
Electronic Funds Transfer: A Win/Win
Why Taxpayers Fail to File - July, p. 5. Situation - January, p. 4.
Corporations Electronic Funds Transfers Misdirected -
1995 Corporation Tax Returns Sought - July, p. 3.
May, p. 8. Most Business Taxes Paid Electronically -
Corporations Fail to File for 1995 - March, p. 10.
March, p. 2. Reminder for Installment Payers - March,
Credit Cards p. 15.
Some Tax Bills May Be Paid with Credit Send EFT Payments to Union Bank -
Cards - July, p. 3. March, p. 10.
Direct Deposit Filing Status
Direct Deposit: The Most Asked Questions - The Question Column: What Is Wife’s Filing
May, p. 6. Status When Non-Citizen Husband Lives
Electronic Filers Like Direct Deposit - May, Outside U.S.? – May, p. 8.
p. 6.

CONTINUED ON PAGE 13

January 1999
Page 13

CONTINUED FROM PAGE 12


Employment Development Department
News from EDD: Seminars Offered –
p. 8.
July,
Where to Find SB 519 Information -
p. 15.
Limited Liability Corporation
May,
1998
Filing Season Limited Liability Companies Billed -
California’s Tax Filing Season
May, p. 8.
September, p. 10.
Manufacturers’ Investment Credit Issue Tax News
Taxpayers “March” to File - July, p. 12. Manufacturers’ Investment Credit: For Your
Tax Return Error Rate - July, p. 2.
Tax Return Errors by Type - July, p. 2.
Information - July, p 10.
Manufacturers’ Investment Credit: What
“Qualified” Means - July, p. 10.
Index
The April 15 Countdown - July, p. 1. Ruling Addresses Manufacturers’ Investment
Fiscal-Year Filers Credit Issue - March, p. 14.
Fiscal-Year Filers: What Year Is It Anyway? - Nonresident Withholding
July p. 6. Nonresident Withholding: The Rules for
Franchise Tax Board Web Site Partnerships - May, p. 16.
You Can Get There From FTB Web Site - Withholding Required on Payments to
May, p. 15. Nonresidents - July, p. 11.
Head of Household Withholding Required When Nonresidents
FTB Gives e-filers Break From Head of Sell California Property -
Household Review - November, p. 5. September, p. 4.
FTB Hosts Head of Household Event - Non Tax Debt Collection (Child Support)
November, p. 2. FTB to Employ New Child Support Collection
Head of Household Symposium? Stay Tuned Tool - September, p. 10.
- July, p. 7. Package X
Head of Household Symposium Taking Shape Add Sales Tax When Purchasing Package X -
- September, p. 12. November, p. 14.
Want Head of Household Symposium? How to Order Package X - January, p. 4,
Contact FTB Now! - March, p. 1. May, p. 17.
Homeowner and Renter’s Assistance Time To Order Package X - November, p. 1.
Homeowner/Renter’s Assistance Season to Partnerships
Open - May, p. 18. Limited Partnerships: When Does Tax
Installment Payments Liability End? - September, p. 6.
Installment Payments May Replace Some New Software for Editing Partnership
Garnishments - September, p. 3. Schedule K-1s - July, p. 6.
Interest Income Partnerships Must File Federal Form 1065
Report Non-California Muni Bond Interest First - November, p. 8.
Income - January, p. 15. Partnerships’ Nonpaper Schedule K-1s: Two
Interest Rates Million Before 2000? - March, p. 9.
Interest Rates - May, p. 2, November, p. 5. Partnership Schedule K-1: File One Way -
May, p. 19.
Interest Rate Reminder - January, p.16.
Partnership Schedule K-1: Paper-Free Filing -
Itemized Deductions May, p. 19.
The Question Column: What Are Common Schedules K-1: Five Reasons Not to File on
Itemized Deduction Errors? - Paper - September, p. 9.
January, p. 8.
Send Partnership Schedule K-1 on CD-ROM -
Keogh Contributions July, p. 6.
The Question Column: Does Keogh Vague K-1 Entries Delay Form 565
Contribution Made After Leaving State Processing - November, p. 9.
Reduce California Source Income? -
May, p. 14. What to Expect During Partnership Audits -
March, p. 5.
Legal Rulings
Legal Ruling Addresses Timber, Mineral Premature Distributions
Royalties - March, p. 4. Taxpayers Reminded to Report Premature
Distributions - January, p. 1.
Legislation
It’s the Law - November, p. 9. Refunds
Refunds and Credits, Deficiency Assessments:
Interested in Proposed Law? - May, p. 11. When Does Time Run Out? - July, p. 9.
Legislation Considers Tax Deductions and Scannable /Substitute Forms
More - May, p. 9.
Are Your Scannable/Substitute Forms
Legislature Looks at Tax Credits - May, p. 4. Approved? - January, p. 10.
New Laws Affect Economic Development Forms Producers Need FTB Approval -
Areas - January, p. 6. November, p. 6.
New Tax Laws Enacted - September, p. 8. Scannable/Substitute Forms (Continued)
1998 Law Means Changes to 1997 Tax Using 1998 Scannable/Substitute Forms?
Returns - May, p. 1. Check the November Tax News -
Where to Get Copies of New Laws - January, September, p. 4.
p. 6.
CONTINUED ON PAGE 14
Page 14

CONTINUED FROM PAGE 13

1998 Schedule K-1


File Schedule K-1s Without Paper -
Tax News
Are You Moving? - January, p. 9,
January, p. 10. March, p. 14.
Tax News Partnerships’ Nonpaper Schedule K-1s: Two
Million Before 2000? - March, p. 9.
Partnership Schedule K-1: File One Way -
Keep Tax News Coming - January, p. 12.
Pat Huberty Says Farewell as Tax News
Editor - November, p. 3.

Index May, p. 19.


Partnership Schedule K-1: Paper-Free Filing -
May, p. 19.
Planning to Move? - May, p. 16.
Tax News Available in Electronic Versions -
July, p. 8.
Schedules K-1: Five Reasons Not to File on Tax News By E-mail - March, p. 5.
Paper - September, p. 9.
Tax News Index - January, p. 12.
Send Partnership Schedule K-1 on CD-ROM -
July, p. 6. Tax News on the Web - January, p. 8.
Vague K-1 Entries Delay Form 565 Tax News/Package X Order Form -
Processing - November, p. 9. November, p. 16.
S Corporation Tax News Three Ways - May, p. 12.
FTB Notice Addresses S Corporation Issues - Taxpayer Bill of Rights
May, p. 17. Taxpayers’ Bill of Rights Hearing Set for
Settlements December - November, p. 3.
FTB Notice Addresses Settlement Authority - Taxpayer Suggestions Aired at Bill of Rights
September, p. 5. Hearing - January, p. 2.
Small Business Tax Policy Conference
How to Succeed in (Small) Business - Sign Up Now for November Tax Policy
September, p. 7. Conference - July, p. 12.
Small Business Tax Day Set for Long Beach - Tax Policy Conference Upcoming -
January, p. 5. September, p. 8.
Small Business Expenses: State/Federal Taxpayer Service Centers
Differences - March, p. 6. FTB, BOE, Offer Taxpayer Service Days -
“Striking Gold,” A Video Bonanza for Small November, p. 2.
Businesses - September, p. 6. Long Beach Office Relocates - March, p. 6.
“Striking Gold” for Small Businesses - New Taxpayer Service Centers Open -
January, p. 5. January, p. 3.
“Striking Gold” Wins Award - March, p. 14. New Taxpayer Service Center Opens: Andal
Where to Find Free Small Business Seminar - to Headline Ceremonies -
July, p. 4. September, p. 2.
Social Security Taxpayer Service Center Debuts in Oakland –
November, p. 3.
Omit Social Security Number From Return
Postcard - March, p. 14. Tax Talk
When is SSN Required? - March, p. 16. Need Continuing Education Credits? Listen
to Some Tax Talk - September, p. 9.
State Board of Equalization
Order Tax Talk Videos - January, p. 14.
News From the State Board of Equalization -
January, p. 15, July, p. 11, Order Tax Talk Video Course - July, p. 4.
September, p. 1, November, p. 12. Tax Talk: Four Hours = Four Credits -
SBE Opinions - January, p. 2, May, p. 4. May, p. 20.
BOE Offers New Way to Pay Sales and Use Tax Talk Seminar End - September, p. 7.
Taxes - November, p. 12. TeleFile
State Disability Insurance More Expected to Ring in Tax Returns -
Excess State Disability Credit Refunded - March, p. 14.
March, p. 4. More Invited to Phone in Tax Returns -
Tax Education January, p. 7.
Free Seminar Looks at “Taxing Perceptions” - Trusts
July, p. 5. A Matter of Trust - January, p. 9.
Satisfy Educational Needs With Video Vouchers
Courses - November, p. 7. Voucher Developed for Personal Income Tax
Where to Find Tax Education Information - Payments - January, p. 8.
March, p. 10. Taxpayers Using New Payment Voucher -
“Taxing Perceptions” Has New Sacramento March, p. 2.
Location - September, p. 8.
Tax Practitioner Institute Coming Up - Wage Garnishments
September, p. 11.
Tax Practitioners’ Institute Offers Training - Wage Garnishments set for Electronic Data
November, p. 11. Exchange - January, p. 16.

CONTINUED ON PAGE 15

January 1999
Page 15

FTB Helps Taxpayers Report Changes


Agency to Provide Forms, Guidance Needed For Compliance
The Internal Revenue Service routinely The letter asks the taxpayer to:
notifies Franchise Tax Board of changes 1. Complete a form FTB 540X for
made to taxpayers’ federal income tax each year that was adjusted.
returns as a result of an IRS examination.
After changes are made, the taxpayer is 2. Include a copy of the IRS’ final
required by law to report the changes to federal determination along with all
FTB within six months.
FTB is trying a new approach to assist
underlying data and schedules. This
could include copies of any 1998
preliminary notices issued by the
taxpayers in meeting this reporting
requirement.
IRS, any settlement and closing
agreements and any applicable tax
Tax News
The new pilot project involves sending
taxpayers a notification letter informing
court decisions. (If the federal
adjustments are lengthy or Index
them of the requirement as well as forms complicated, see FTB Pub. 1008.)
and instructions to assist with reporting CONTINUED FROM PAGE 14
3. Use the self-addressed stamped
the federal changes. Besides the envelope to mail a copy of the Water’s-Edge
notification letter, the taxpayer will also notification letter, the amended Water’s Edge Election Problems
receive: Move to Resolution -
return, the IRS federal May, p. 13.
• A form FTB 540X, “Amended determination(s) and any applicable Water’s-Edge Election
Individual Income Tax Return” and payment to FTB. Symposium is March 11 -
the instructions for filling it out. March, p. 9.
FTB’s objective is to protect taxpayers Withholding
• An FTB Pub. 1008, “Federal Tax rights regarding any refunds, reduce the In 1999 Missing “Wages” Entry
Adjustments and Your Notification accrual of interest, and to encourage self Will Delay Refund -
Responsibilities.” compliance. March, p. 16.
• A self-addressed, stamped envelope. For more information about the pilot New Name for Withhold-at-
Source - January, p. 13.
The notification letter will outline several project, call Lisa Close with FTB’s
methods available for reporting the Federal and State Special Audit Section at
federal changes and will describe the (916) 845-6296.
most expedient way to meet the reporting
requirements.

Free Seminars for Businesses and Taxpayers


Several federal, state and local Thursday, March 18, in Stockton at the
government agencies have joined University of Pacific.
together to sponsor a series of free (209) 932-2338
seminars in 1999. Tuesday, March 23, in Inland Empire at
The seminars, entitled “Taxpayer Service California State University,
Days and Small Business Fairs,” are San Bernardino.
educational conferences featuring (909) 680-6705
representatives from the State Board of Wednesday, March 24, in Chico at
Equalization, Franchise Tax Board, California State University, Chico.
Internal Revenue Service, Employment (916) 227-1883
Development Department, County
Assessor's Office and several other local, Saturday, March 27, in Sacramento at
state, and federal agencies. American River College.
(916) 227-1883
The following seminars have been
scheduled: Tuesday, March 30, in Ventura at
Ventura Community College.
Friday, March 12, in Long Beach at the (805) 677-2771
Long Beach Convention Center.
(310) 516-4330 CONTINUED ON PAGE 16
Page 16

CONTINUED FROM PAGE 15 To attend a seminar, call the telephone


Agencies Wednesday, March 31, in Bakersfield at
Bakersfield College.
number provided for the location of your
choice. For-up-to-date information about
Offer (805) 334-3929
Thursday, April 1, in Fresno at California
these and other taxpayer education
opportunities, visit the BOE Web site at
State University, Fresno. (209) www.boe.ca.gov and click on
Free 248-4209 “Taxpayer Education.”
Saturday, May 1, in Hayward at For more information about FTB’s
Seminars California State University, Hayward. participation in the seminars, contact
Alvaro Hernandez, FTB Small Business
(510) 637-2473
Tax Education Coordinator, at
(916) 845-5257.
(CONTINUED FROM PAGE 11)
(Telephone number not available)
U S Tax Systems, Inc.
(800) 966-8787

Presorted
First-Class Mail
U.S. Postage Paid
P.O. Box 520 Sacramento, CA
Rancho Cordova, CA 95741-0520 Permit No. 312

Address Service Requested