California Tax Attorney Blog

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.

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.

If you believe an individual or company is not complying with California's personal income tax or corporate income and franchise tax laws, you can report that information to Franchise Tax Board (FTB). No rewards are offered for reporting this information.

Income tax fraud is intentionally paying less tax than you owe.

Examples of income tax fraud are:

Not filing state income tax returns.

Preparing documents, books, and records that understate the true income or overstate the expenses of a business.

Making false or fraudulent claims for refunds.

Questionable tax practitioner practices.

Failing to report all income received.

Opening and closing of new businesses to evade taxes.

Claiming to be a resident of another state while residing in California.

Reporting Income Tax Fraud

1. What type of information should I provide when reporting a possible fraudulent activity?
Please include the following details if available:

Individual/business name

Individual/business address

Marital status

Spouse's name

Alleged tax violation

How you became aware of the alleged violation

Availability of supporting documents

Asset information (vehicles, property, etc.)

Your contact information (optional)

2. If FTB uses the information I provide to collect more taxes, will I receive a reward?
No. FTB does not pay rewards for informant information.

3. After I provide information to FTB, can I receive updates on the investigation?
No. Privacy and disclosure laws prohibit FTB from sharing information whether action is taken or not.

4. How do I modify information on a report I previously submitted?
If you need to provide additional information or wish to correct previous information, submit another report. On the second report, select the "Additional Information" box at the beginning of the report, and enter your referral number or the name of the person or business you reported.

5. Can the person I am reporting find out my identity?
No. We treat any information you provide as confidential unless compelled by law to do otherwise.

6. How do I know if you received my online referral report?
If your submission is successful, you will receive a confirmation window with a reference number. Keep the number or print the confirmation page.

7. Where do I send supporting documents?

Mail:
FRANCHISE TAX BOARD
PO BOX 1565
RANCHO CORDOVA CA 95741

Fax: 916.843.2060

The following discusses how title to your California assets should be transferred into your living trust and any differences in the way title should be taken for specific types of assets. The purpose of transferring property into your living trust is to avoid probate in California, the probate fees, the delays in transferring property to your rightful heirs because of probate and the public nature of the California probate proceeding.

TITLE TRANSFERS (FUNDING THE TRUST).

For my own estate, the Mitchell A. Port Family Living Trust is intended eventually to hold title to substantially all of my assets.

Generally, I should transfer title to my assets from my individual name to:

"Mitchell A. Port, Trustee, Mitchell A. Port Family Living Trust dated May ____, 2010"

Here is a list of the property to consider putting into a living trust:

1. Automobiles

2. Bank, Savings and Other Cash Accounts

3. Bonds, T-Bills, Commodities

4. Club Memberships

5. Life Insurance; Pension, Profit Sharing, Retirement
Plans

6. Notes:

a. Secured by Real Property

b. Secured by Personal Property

c. Unsecured

7. Partnerships and LLCs: Limited (or General) Partnerships and LLCs

8. Real Property

a. Reassessment

b. Loan Acceleration

c. Title Insurance

d. Homeowner's Exemption

e. Homeowner's Insurance

f. Purchases of Real Property

g. Sales of Real Property

9. Stock

a. Marketable Securities

b. Mutual Funds; Margin and Ready Asset Accounts

c. Closely Held Corporations

10. Prepare a list of information that would be useful in case of death or a health emergency and add it to this book or some place easily locatable:

a. Bank Accounts and Safe-Deposit Boxes

All bank names - account numbers - personal contact, if available - location of safe-deposit box - contents of box - location of box key;

b. Credit Cards

Issuers - account numbers - expiration dates - special information (airline mileage points, balances owed);

c. Insurance

Home, car, life, health, long-term care: issuers - account numbers - agents - premium due dates;

d. Health Care

Contact information for physicians - current medications and dosages - Medicare claim number - Medigap policy number;

e. Taxes

Accountant information - location of past filings;

f. Investment And Retirement Accounts

Names of brokerage or plan administrators - account numbers - PIN numbers - Names of bankers or brokers;

g. House

Amount of mortgage payment or rent - due date - location of deeds and property titles - contact information for service people;

h. Miscellaneous

(i) Driver’s license number and expiration date; (ii) vehicle registration information; (iii) any items in storage and storage company phone number; (iv) contact information for neighbors and friends; (v) e-mail accounts, websites, and passwords; (vi) the combination to any safe in your home; and (vii) a list of the automatic payments from and deposits to bank accounts.

A Jewish couple, acting as trustors/settlors of their living trust, were "free to distribute their bounty as they saw fit and to favor those grandchildren whose life choices they approved of". So held the Illinois Supreme Court.

A Jewish couple's decision to disinherit any of their grandchildren that married outside their faith was decided by the court to be lawful. The couple’s will provided that upon the death of the surviving trustor, if any grandchild had married outside the Jewish faith, their non-Jewish spouse had a year to convert to Judaism. If they did not, the gift would lapse.

The state Supreme Court decided that the clause was valid as long as divorce was not encouraged by the method of disinheritance.

Restraints on marriage are generally held by the Courts to be void as against public policy when such provisions are contained in wills or trusts. California Civil Code section 710 provides that conditions imposing restraints upon marriage, except upon the marriage of a minor, are void; but this does not affect limitations where the intent was not to forbid marriage.

Consult an experienced estate planning lawyer if you want to create provisions to disinherit a particular beneficiary on grounds of substance abuse or because of religion. Call Mitchell A. Port at (310) 559-5259 to discuss your will, living trust and other estate planning options.

The "self service" center of the California probate court has a handy diagram illustrating the probate process.

The California probate process diagram is not intended to cover all situations. For your particular probate questions, consult Mitchell A. Port by calling (310) 559-5259.

A recent poll described in Forbes.com found that many of those who had done no estate planning (in California and elsewhere) were deterred by the legal cost and mistakenly believed that those without large assets didn't need to plan. Half of Americans don't have any of the most basic estate planning documents, including a will, a living trust and financial and medical powers of attorney, needed to protect them (and their assets) if they're incapacitated.

Why do so many people lack estate planning documents? One reason might be because of the recession: 44% of those without any documents said the reason was because they were more focused on "essentials" like paying bills and buying groceries. Contributing to this oversight, however, were misconceptions about the primary purpose of estate documents or what might happen if someone hasn't planned.

For example, 19% of those with no documents said they didn't have sufficient assets to warrant estate planning. Yet wealth and the estate tax have little to do with the need for basic legal documents should you become disabled.

Speak with a qualified estate planning attorney soon about how a California living trust, pour over will, durable power of attorney for property management and advance health care directive might help you. Call Mitchell A. Port at 310.559.5259.

The IRS provides information on recent tax changes as they impact the following areas:

Businesses
Disaster Areas
Estates and Trusts
Exempt Organizations
Foreign Issues
Individuals
IRAs and Other Retirement Plans

Other tax topics are below.

The IRS provides information broken down by most popular categories. Those categories are at: Frequently Asked Question Categories

IRS Procedures
Filing Requirements/Status/Dependents/Exemptions
Itemized Deductions/Standard Deductions
Interest/Dividends/Other Types of Income
Pensions/Annuities/Retirement Plans (i.e., 401(k), etc.)
Social Security Income
Child Care Credit/Other Credits
Earned Income Tax Credit
Estimated Tax
Capital Gains, Losses/Sale of Home
Sale or Trade of Business, Depreciation, Rentals
Small Business/Self-Employed/Other Business
Aliens and U.S. Citizens Living Abroad
Electronic Filing (e-file)
Magnetic Media Filers
Other (Alternative Minimum Tax, Estates, Trusts, Tax Shelters, State Tax Inquiries)
Individual Retirement Arrangements (IRAs)

Finally, the IRS assembled its most frequently asked tax questions in one easy location. Top Frequently Asked Questions

What are the tax changes for this year?
Is there an age limit on claiming my children as dependents?
How much does an unmarried dependent student have to make before he or she has to file an income tax return?
If I claim my daughter as a dependent because she is a full-time college student, can she claim herself as a dependent when she files her return?
Can I receive a tax refund if I am currently in a payment plan for prior year's federal taxes?
For head of household filing status, do you have to claim a child as a dependent to qualify?
What is the American Recovery and Reinvestment Act (ARRA) of 2009?
What should I do if I made a mistake on my federal return that I have already filed?
What is a split refund?
How do I know if I have to file quarterly individual estimated tax payments?

Continue reading "Get Help To Solve Your Tax Problems" »

The California Franchise Tax Board offers free webinars and the one on Wednesday, May 5, 2010, at 10 a.m. (PST) is designed for those who must withhold on California source income payments to resident and nonresident independent contractors. The FTB webinar will take a look at:

• The basics of resident and nonresident independent contractor withholding, including backup withholding.

• A summary of the three phases of withholding and what to do before payment (FTB Forms 587, 588, 589, 590), at the time of payment, and after payment of California source income to independent contractors (FTB Forms 592, 592-V, 592-B).

• How the FTB is preparing for process changes that will occur when it implements its new, automated withholding system in late 2010.

• Withholding resources and contact information you can use at any time.

Each webinar is approximately 40 minutes.

The American Bar Association Guide to Wills and Estates

TABLE OF CONTENTS
Part One - First Steps

Ch 1. Why You Should Plan Your Estate How You Can Save Money and Be Sure You've Done It Right
Ch 2. Getting Started Don't Procrastinate (This Means You)

Part Two - Transferring Property Without a Will
You Have Many Ways of Getting Money to People Without Fuss or Delay

Ch 3. Lots of Little "Wills" Your Guide to Will Substitutes
Ch 4. Life Insurance An Old Standby Has Lots of Uses
Ch 5. Joint Tenancy They're Easy and Cheap—But Watch Out for Pitfalls

Part Three - Wills
What Should be in Yours?

Ch 6. Wills 101 The Basics
Ch 7. What Goes in the Will What to Put in and What to Leave Out
Ch 8. After the Will Is Written Follow These Steps to Be Sure Your Will Does the Job

Part Four - Trusts and Living Trusts
They Can Do a Lot--but They're Not for Everyone

Ch 9. How Trusts Work A Quick Look at a Misunderstood Tool
Ch 10. Do You Need a Trust? As Usual in the Law, It Depends
Ch 11. Living Trusts 101 The Basics
Ch 12. Setting up a Living Trust Your Guide to Doing it Right

Part Five - Putting the Tools to Work
Some Tips for People with Particular Needs

Ch 13. Providing for the Kids Tips for Every Age of Offspring
Ch 14. Married...with or Without Children Most of Us Want to See That Our Spouse Is Taken Care of, but How?
Ch 15. Splitting Up Divorce and Remarriage
Ch 16. Beyond Ozzie & Harriett Straight Talk and Otherwise
Ch 17. Estate Planning for Business Owners The Law Gives You Lots of Options--but You Have to Use Them Well
Ch 18. Providing Income for Your Final Years Estate Planning and Retirement
Ch 19. Controlling Costs in Your Final Years Paying for Long-Term Care

Part Six - Death and Taxes
Strategies for Holding On to as Much as You Can

Ch 20. Death and Taxes Trying to Make Sense Out of Rules That Keep Changing
Ch 21. Tax Planning 101 Trusts
Ch 22. Tax Planning 102 The Benefits of Living Gifts and Life Insurance

Part Seven - When You Can't Make the Decision
Confronting Your Biggest Fear Now Can Make a Big Difference Later

Ch 23. Changing Your Mind Changing, Adding to, or Revoking Your Will or Trust
Ch 24. Delegating Decisions Advance Directives
Ch 25. Planning for End of Life Decisions Living Wills and Organ Donation

Part Eight - Putting the Plan into Action After Your Death
Steps You Can Take Now to Help Your Survivors

Ch 26. Easing the Burden on Your Family There's a Lot You Can Do to Help--Now
Ch 27. Choosing the Executor Some Tips on Getting the Right Person
Ch 28. Trustees You Can Choose a Person or a Company to Get the Job Done
Ch 29. Probate A Quick Primer on How it's Done

Resources

Appendix A. Estate-Planning Checklist
Appendix B. Sample Basic Will (Annotated)
Appendix C. Health-Care Advance Directive