Franchise Tax Board "Practice and Procedures"
Want to know the California’s collection procedures are for delinquent taxes? Check out the “Collection Procedures Manual” here. Here is a list of topics in the Manual:
Introduction Section
Responsibility Section
Case Administration Section
Case Processing Section
Debtor Asset Location Section
Voluntary Case Resolution Section
Involuntary Case Resolution Section
Case Servicing Section
Special Processes Section
Glossary
Are you being audited by the California Franchise Tax Board? Here is the audit manual so you don’t have to be surprised by what happen.
Is your partnership being audited? Read the partnership manual.
S corporations are an easy target for revenue collection. What is the Franchise Tax Board’s approach to the audit? Here is the S corporation manual.
Want additional help from a tax attorney? Call Mitchell A. Port at (310) 559-5259.
Reforming the Mortgage Interest Deduction
The mortgage interest deduction (MID) is the largest single federal subsidy for owner-occupied housing, but the benefits are not evenly distributed among taxpayers. Only individuals who itemize deductions can benefit from the MID, and the value of the deduction increases with the marginal tax rate. If the government wishes to promote homeownership, a refundable tax credit available to all taxpayers would be more effective. This report presents new distributional estimates both of the current deduction’s benefits by income group, family type, and race/ethnicity and of proposals to eliminate, scale back, or replace the MID with more broad-based tax incentives.
Ask TaxMama Issue 554 – Memorial Day Weekend
May 28, 2010 by Tax Blog
Filed under Questions & Answers
Dear %$firstname$% It’s already Memorial Day Weekend! Remember to remember the folks who make our way of life possible. And offer more than just the obligatoru barbeque – offer thanks to all those who serve, or have served!
You may have noticed yesterday that the TaxMama.com website was down. This has been a week of external, and odd, maintence issues with key tools around the web. Redundancy is nice. Technology ompanies should provide alternatives when servers go down.
We had a bit of a panic in the beginning of the week with the class conference system going down on Saturday. Fortunately, I DO believe in redundancy. We moved all the students into another company’s online conference system. Wouldn’t you know it, right after we finished the first two-hour lesson, it went down, too. Two more hours to go! So, this Pied Taxer lead my merry band of tax acolytes off to a telephone conference line – where we did manage to finish up another whole two hours of lecture. Whew! That was harrowing. I felt like Joan of Arc hoisting my standard for all my followers to trudge after me in the mud and muck, starving (for information), getting weary of the journey. Actually, I must say, everyone was such a good sport about it. (Only a few people cussed me out – and I was in total agreement with them. I felt the same way!)
The week went quickly. Have I said that before? When you have about 40 hours worth of things to do in a day, it’s amazing how time passes. Everyone at Team TaxMama has just been working intensely – to ship out a mountain of materials; resolve the odd Homebuyers Credit rejections (though we do have one return that has not yet been rejected, but we just learned has an error in a Social Security Number); reviewing articles and e-books… which reminds me!
We just posted a rather raw edition of The 100% Home-Based Business Tax Solution in TaxMama’s Even More Quick Look-Ups. Though it still needs a bit of prettifying, I wanted you to have the updated data soonest. It will take us several weeks yet to make the ebook look snazzy! http://taxmama.com/family-member-resources/
In our last episode, I was trying to pin IRS down on some specifics in time to file last week’s MarketWatch.com article wrapping up the Homebuyers Credits. As you realize, we didn’t get answers by press time. However, a few hours after the article was published, IRS answered most of my questions. Sigh. Expect to see that information in a follow-up piece in June’s Equifax blog.
Meanwhile, at Equifax this week, we talk about what Kid-Friendly Tax Credits.
http://www.equifax.com/blog/tax/ The next Marketwatch column will have more to do with what steps you should take to do some planning and review in June.
http://www.marketwatch.com/Journalists/Eva_Rosenberg
You will also find lots more useful tax information in the MarketWatch.com Tax Guide.
http://www.marketwatch.com/taxes
In Thursday’s EA Exam Review Class, we started talking about the IRA to R
oth conversions people are doing this year. If you have questions about when it makes sense to roll your IRA over to a Roth – and pay the huge tax bill…join us at the next TaxMama’s Tax Round Table discussion on June 24, 2010 at 8:00 am PT.
http://taxmama.com/category/tax-roundtables/ In IRS News, we learn that IRS is giving away a lot of money. Learn how you can get your hands on this – and help a lot of people!
http://taxmama.com/category/asktaxmama/irs-news/
In Money Funnies this week, we get introduced to the next edition of the Survivor series. This is the toughest challenge yet! Will the contestants survive?http://taxmama.com/category/asktaxmama/money-funnies/
Remember, for all unlicensed tax preparers around the country, IRS is holding a phonr forum on June 9th at 2:00 pm ET to explain what you will have to do to comply. Don’t miss this!
http://taxmama.com/education/tax-education/federal-tax-return-preparers-forum/
This week’s AccountingWeb.com blog, resulted from an email from Sharon Kreider and Karen Brosi. It’s about an IRS Private Letter Ruling related to Registered Domestic Partners in Community Property states. If you are an RDP in such a state, you want to read this week’s blog.
http://www.accountingweb.com/blogs/accountingweb/talk-taxmama
In TaxQuips this week we learn what happens to an LLC in a divorce; what to do when your life sucks and IRS or your state is garnishing your wages; how to determine how much tax to pay on the stock you received when your life insurance company demutualized (huh?); and if you can take an energy credit for your own labor when you install high efficiency equipment.
http://taxmama.com/category/tax-quips/
As always, we love your feedback, opinions and ideas.
You are what makes all this fun – and interesting!
Please use the Comments link online.
http://taxmama.com/asktaxmama/ask-taxmama-issue-554/
TaxNerd gear makes a bold statement year-round.
It helps attract the opposite sex!
Shop at www.taxnerd.net or http://www.zazzle.com/taxmama*
Hugs from your favorite TaxNerd,
http://www.zazzle.com/taxmama*
Eva Rosenberg, EA
Your TaxMama® is watching…out for you.
www.TaxMama.com
www.snurl.com/homebiz-tax
www.TaxMama.com/TaxQuips
www.IRSExams.com
www.TaxNerd.net
==========================————————————————————-
TAX CALENDAR
http://taxmama.com/tax-calendar-2010/————————————————————-
06/15/2010 Individuals, Farmers & Fishermen Pay 2nd Quarter Estimated Tax Payment
06/15/2010 Corporations – 2nd Quarter Estimate Tax payment Due
06/15/2010 Estates & Trusts 2nd Estimated Tax Payment
06/15/2010 Employers Make Monthly Payroll tax deposit on the 15th of each month
06/15/2010 US Taxpayers Overseas Individual Personal Returns due
06/15/2010 US Taxpayers Overseas Claim Foreign Earned Income
06/15/2010 US Individuals Overseas Personal Return Extensions due ————————————————————-
From TaxMama® to You!————————————————————-
Follow TaxMama®’s Tweets – http://twitter.com/TaxMama
You are invited to put a TaxQuips Widget on your phone, social networking page, website, or… You’ll get the TaxQuips as soon as they published – long before they are distributed in by e-mail. It’s a nifty gadget. Just pick up the code and paste into your site or application.
http://www.widgetbox.com/widget/taxmamas-taxquips-daily-tax-podcasts
Download TaxMama’s 2010 iphone Tax Calendar. My gift to you.
http://snurl.com/taxcalendar
Never miss a tax deadline again!
The customizable tax calendar is here.
Add or Remove dates. Add your own reminders – get alerts.
http://snurl.com/itaxmamapro
- Ask TaxMama :: Where taxes are fun and answers are free
- www.TaxQuips.com :: The number ONE free tax podcast online
- Ask TaxMama :: Where you can comment on this
Get Money from IRS – Lots of Money!
IRS Seeking Applications for Volunteer Tax Assistance Program Grants
WASHINGTON – The Internal Revenue Service will soon begin accepting applications for the Tax Counseling for the Elderly (TCE) and Volunteer Income Tax Assistance (VITA) grant programs, which will allow some organizations to apply for annual funding for up to three years.
Applications will be accepted June 1, 2010, through July 9, 2010. Previous grant recipients will have the option to apply for up to three years of annual funding, which would reduce the amount of paperwork they must complete over a three-year period. This annual funding will also help recipients with budget planning.
The 2011 application packages and guidelines will be available on the IRS website by June 1, 2010. More information about the TCE and VITA grants is available in Publication 4680, TCE & VITA Grant Programs.
The IRS in 2010 awarded 24 TCE grantees $6.1 million and 147 VITA grantees $7.44 million. Through mid May, the two grant programs filed more than 2.1 million returns at almost 9,000 sites nationwide.
The TCE program was established in 1978 to provide tax counseling and return preparation to persons age 60 or older and to give training and technical assistance to the volunteers who provide free federal income tax assistance within elderly communities across the nation.
The VITA Grant program was established in 2007 to supplement the VITA program, which was created in 1969. VITA provides underserved communities with free tax filing assistance. The grant program enables VITA to extend services to underserved populations in hardest-to-reach urban and non-urban areas, to increase the capacity of targeted taxpayers to file returns electronically, to enhance training of volunteers and to improve the accuracy rate of returns prepared at VITA sites.
[TaxMama note: The VITA grants require you to match the funding IRS provides. If you can’t afford to match the grant – up to $100,000, you may raise the funds. Someone just told me that the value of your time is taken into account towards the matching of funds. I am not certain about that. ]
- Ask TaxMama :: Where taxes are fun and answers are free
- www.TaxQuips.com :: The number ONE free tax podcast online
- IRS News at TaxMama.com :: Where you will find more up to date information about tax news
Get Money from IRS – Lots of Money!
May 28, 2010 by Tax Blog
Filed under Questions & Answers
IRS Seeking Applications for Volunteer Tax Assistance Program Grants
WASHINGTON – The Internal Revenue Service will soon begin accepting applications for the Tax Counseling for the Elderly (TCE) and Volunteer Income Tax Assistance (VITA) grant programs, which will allow some organizations to apply for annual funding for up to three years.
Applications will be accepted June 1, 2010, through July 9, 2010. Previous grant recipients will have the option to apply for up to three years of annual funding, which would reduce the amount of paperwork they must complete over a three-year period. This annual funding will also help recipients with budget planning.
The 2011 application packages and guidelines will be available on the IRS website by June 1, 2010. More information about the TCE and VITA grants is available in Publication 4680, TCE & VITA Grant Programs.
The IRS in 2010 awarded 24 TCE grantees $6.1 million and 147 VITA grantees $7.44 million. Through mid May, the two grant programs filed more than 2.1 million returns at almost 9,000 sites nationwide.
The TCE program was established in 1978 to provide tax counseling and return preparation to persons age 60 or older and to give training and technical assistance to the volunteers who provide free federal income tax assistance within elderly communities across the nation.
The VITA Grant program was established in 2007 to supplement the VITA program, which was created in 1969. VITA provides underserved communities with free tax filing assistance. The grant program enables VITA to extend services to underserved populations in hardest-to-reach urban and non-urban areas, to increase the capacity of targeted taxpayers to file returns electronically, to enhance training of volunteers and to improve the accuracy rate of returns prepared at VITA sites.
[TaxMama note: The VITA grants require you to match the funding IRS provides. If you can’t afford to match the grant – up to $100,000, you may raise the funds. Someone just told me that the value of your time is taken into account towards the matching of funds. I am not certain about that. ]
- Ask TaxMama :: Where taxes are fun and answers are free
- www.TaxQuips.com :: The number ONE free tax podcast online
- IRS News at TaxMama.com :: Where you will find more up to date information about tax news
Only the Strong Survive
May 28, 2010 by Tax Blog
Filed under Questions & Answers
The Next SURVIVOR Series
Six married men will be dropped on an island with one car and 3 kids each for six weeks.
Each kid will play two sports and take either music or dance classes.
There is no fast food.
Each man must take care of his 3 kids; keep his assigned house clean, correct all homework, complete science projects, cook, do laundry, and pay a list of ‘pretend’ bills with not enough money.
In addition, each man will have to budget enough money for groceries each week.
Each man must remember the birthdays of all their friends and relatives, and send cards out on time—no emailing.
Each man must also take each child to a doctor’s appointment, a dentist appointment and a haircut appointment.
He must make one unscheduled and inconvenient visit per child to the Emergency Room.
He must also make cookies or cupcakes for a school function.
Each man will be responsible for decorating his own assigned house, planting flowers outside, and keeping it presentable at all times.
The men will only have access to television when the kids are asleep and all chores are done.
The men must shave their legs, wear makeup daily, adorn themselves with jewelry, wear uncomfortable yet stylish shoes, keep fingernails polished, and eyebrows groomed.
During one of the six weeks, the men will have to endure severe abdominal cramps, backaches, headaches, have extreme, unexplained mood swings but may never once complain or slow down from other duties.
They must attend weekly school meetings and church, and find time at least once to spend the afternoon at the park or a similar setting with at least one child.
They will need to read a book to the kids each night and in the morning, feed them, dress them, brush their teeth and comb their hair by 7:30 am.
A test will be given at the end of the six weeks.
Each father will be required to know all of the following information about each child:
– birthday – Social Security Number – each teacher’s name – height – weight – shoe size – clothes size – doctor’s name – the child’s weight at birth – length – time of birth – and length of labor – each child’s favorite color – middle name – favorite snack – favorite song – favorite drink – favorite toy – biggest fear – and what they want to be when they grow up.
The kids vote them off the island based on performance.
The last man wins only if he still has enough energy to be intimate with his spouse at a moment’s notice.
If the last man does win, and that’s a big IF!
…he can play the game over and over and over again for the next 18-25 years, eventually earning the right to be called Mother!
After you get done laughing, send this to as many females as you think will get a kick out of it and as many men as you think can handle it. Just don’t send it back to me.
I’m wiped out. I’m going to bed.
Courtesy of Blakely Sanford EA in San Diego , CA
with a little twist…
Please remember to send us your humor.
Clean jokes preferred.
Courtesy of Floyd T. Greenman EA in Chatsworth , CA
Please remember to send us your humor.
Clean jokes preferred.
- Ask TaxMama :: Where taxes are fun and answers are free
- www.TaxQuips.com :: The number ONE free tax podcast online
- Money Funnies at TaxMama.com :: Where you can find more humor
Should We Dump the Home Mortgage Interest Deduction?
Do we want to use the tax code to subsidize home ownership? And, if we do, is the mortgage interest deduction the best way to do it? A new paper by my Tax Policy Center colleagues Eric Toder and Katherine Lim, along with Urban Institute researchers Margery Turner and Liza Getsinger, asks these provocative questions, and comes up with some surprising answers.
To even ask seems almost un-American—almost like suggesting we replace barbeque at the Memorial Day picnic with, oh, tofu. But a close look suggests there is much less to the hallowed deduction than meets the eye. Thus, we’d miss it much less than we think.
In 2012, the deduction will reduce federal revenues by $131 billion. In contrast, the entire budget for the Department of Housing and Urban Development is just $48 billion. The conventional wisdom says these tax breaks are important because A) they increase home ownership and B) homeowners are more engaged in their communities than renters.
It turns out that neither of these assumptions is necessarily true. For instance, for a half century–until the recent real estate boom and bust–home ownership rates in the U.S. have barely budged even though the value of the deduction has fluctuated widely. Similarly, there is no clear connection between home ownership and the availability of mortgage deductions in other countries.
The exact relationship between home ownership and other social benefits is just as uncertain. We know home owners are more connected to their communities than renters. But is that because they own a house, or is it merely that the same types of people who are engaged in their communities are also prone to home ownership? We don’t really know.
We do know, however, that the deduction is not a very efficient way to encourage home ownership. Most benefits go to high-income households that would probably buy a house with or without the deduction. Since non-itemizers get no benefit from the deduction, it is not surprising that most of the subsidy goes to upper-bracket taxpayers.
So is there a better way? The paper looks at a half-dozen alternatives, from eliminating the mortgage subsidy entirely to capping its value or turning it into a credit. Not surprisingly, each design has its own set of winners and losers.
To take one example: If the goal is to encourage homeownership among people who otherwise would not buy, what if we replaced the deduction with a credit? Remember that credits are usually a better deal for middle-income households. Simple example: A 20 percent credit on $1,000 of interest is worth $200 no matter what your tax bracket or whether you itemize. But a $1,000 deduction is worth $350 to someone in the 35 percent bracket but only $100 to an itemizer in the 10 percent bracket, and nothing to someone who takes the standard deduction ).
The paper looks at four different credits, each of which provides the same total subsidy amount as the current deduction. For instance, replacing the deduction with a non-refundable credit equal to 20 percent of interest payments would raise average after-tax incomes for households in the lowest 80 percent of the income distribution, with middle-income households getting the biggest average benefit. However, on average those in the top 20 percent would do less well with the credit than with today’s deduction. A non-refundable 100% credit capped at about $2,000 would benefit middle-income households even more but raise taxes more for people in the top 20 percent.
Sadly, the study also explains why the deduction is likely to stay right where it is. The big winners under the current system are upper-middle-class suburbanites who disproportionately own homes, itemize deductions, and spend a relatively large share of their income on mortgage interest. And nobody wants to get them mad, either by cutting their housing subsidies or feeding them tofu.
LLC After Divorce
May 27, 2010 by Tax Blog
Filed under Questions & Answers
Today TaxMama hears from Marina in Washington DC in the TaxQuips Forum with an interesting set of questions. She says. “A husband and wife are divorced. They owned an LLC. The wife wants out. Can the husband keep the same EIN? Can he elect to treat the single member LLC as a S Corp.?” http://taxmama.com/forum/taxquips/llc-for-hw-after-divorce/
Hi Marina,
Excellent questions. I am glad you asked.
1) Yes, he may keep the same TIN for the LLC. If it had been purely a partnership, it would have dissolved when 50% of the ownership changed hands. That’s one of the advantages of the LLC. It doesn’t dissolve.
2) If it was being filed on a Form 1065, he will automatically have to switch to a Schedule C, if the LLC has only one member.
3) However, yes, he may make the election to be an S Corporation.
4) How? Form 2553 allows him to make the S Corp election.
5) When, as soon as there is only one owner, he must make the election immediately. I am not sure how much time he has after the change. Read the instructions to the Form 2553 and Form 8832.
6) As to the Form 8832, do you ALSO have to file it? No. Once you have made the election on Form 2553 – the S Corporation election form, you don’t also need to use Form 8832. They changed that procedure in 2008, I believe.
And remember, you can find answers to all kinds of questions about divorce and split businesses, and other tax issues, free. Where? Where else? At www.TaxMama.com.
[Note: If you were subscribed to the e-mailed TaxQuips, you’d be getting other exciting news and tips by e-mail, that never appear on the site. Please click on the join TaxMama.com link – it’s free!]
Please post all Comments and Replies in the new TaxQuips Forum
- Ask TaxMama :: Where taxes are fun and answers are free
- www.TaxQuips.com :: The number ONE free tax podcast online
File Download (0:00 min / 1 MB)
Business Programs Through The California Secretary Of State
The Business Entities Section of the California Secretary of State’s office processes filings, maintains records and provides information to the public relating to business entities (corporations, limited liability companies, limited partnerships, general partnerships, limited liability partnerships and other business filings).
Filing Tips: Tips for filing most corporation, limited liability company and limited partnership documents
Forms, Samples & Fees: Forms, document samples and associated fees
FAQs: Answers to the most frequently asked business entity questions
Name Availability: Corporation, limited liability company and limited partnership name availability inquiries and reservations
Annual/Biennial Statements: Corporation and limited liability company statements of information, common interest development association statements and publicly traded disclosure statements
Information Requests: Orders for certificates, copies and status reports
Service Options: Options for online searches and filings, document processing and information requests (for certificates, copies and status reports)
Service of Process: Substituted service of process
Victims of Corporate Fraud Compensation Fund: Restitution to victims of corporate fraud
The Secretary of State’s office is often asked what other agencies a business entity may need to contact to ensure proper compliance. This link is a list of the agencies most often referenced.
Need access to California domestic stock, domestic nonprofit and qualified foreign corporations, limited liability company and limited partnership information of record with the California Secretary of State? Click here.
There are several agencies in the State of California that administer a variety of taxes. While other state and local agencies may issue licenses and permits and assess fees or taxes, this link is a list mostly of state agencies that can help determine your tax obligations and provide you with information about tax reporting and taxpayer rights.
Need additional help? Call a business attorney, call Mitchell A. Port at 310.559.5259.
Preliminary Revenue Estimates and Distributional Analysis of the Tax Provisions in the Bipartisan Tax Fairness and Simplification Act of 2010
The Bipartisan Tax Fairness and Simplification Act of 2010 (“Wyden-Gregg,” introduced as S. 3018) is a broad reform of the federal income tax system. Some provisions would also expand the Social Security payroll tax base. This paper presents the Tax Policy Center’s estimates of the revenue and distributional effects of the income and payroll tax provisions in Wyden-Gregg.