February 28, 2011

California Taxpayers' Bill Of Rights

The California Legislature enacted the Taxpayers’ Bill of Rights. For the first time, legislation spelled out your rights as California taxpayers as well as the State's obligations to you.

Here's a brief summary by topic of your rights:

Your Rights to Confidentiality

Your Tax

Bills You Receive From the Franchise Tax Board

Your Payment Responsibilities

Your Rights During a Tax Audit

Your Protest Rights

Protest Procedure

How FTB Handles Your Protest

Your Appeal Rights

Board of Equalization Appeal Procedure

Collection Actions

Tax Liens

Wage and Bank Levies

Property Seizure and Sales


Changing Your Filing Status

Information Reported from Third Parties

Bills You Receive From Us


Reimbursement of Costs

Levies and Liens

Outstanding Delinquent Accounts

Employee Relief/Unremitted Withholdings

Suspension of Interest/Fail to Notify

Procedures for Imposing Penalties

Notice of Interest Charges

Abatement of Interest/Disaster Areas

Waiver of Early Withdrawal Penalties

Notice Include Deadlines

Related Franchise Tax Board Publication

Taxpayers’ Rights Advocate

For help with enforcing your rights and resolving other tax disputes, call Mitchell A. Port at 310.559.5259.

February 14, 2011

Tax Solutions For The Self-Employed And Small Business Owner

IRS Small Business and Self-Employed Tax Center provides resources to help small businesses and self-employed persons. The IRS website provides important tax information available for all stages of owning a business. The site at www.irs.gov/smallbiz offers the following resources:

Small business educational events

Tax-related news that could affect your business

A-Z Index for Business – find information fast

Employment tax information – federal income tax, Social Security and Medicare taxes, FUTA and self-employment tax

Employer Identification Number online application

Small business forms and publications

IRS videos for small businesses

Other resources available on the IRS website include a tax calendar designed for small business taxpayers, a guide to IRS audits, a virtual small business tax workshop and video and audio presentations.

Tax Calendar for Small Business Taxpayers:

The Tax Calendar for Small Businesses and Self-Employed is a 12-month calendar is filled with information on general business taxes, IRS and Social Security Administration customer assistance, electronic filing and paying options, retirement plans, business publications and forms, and common tax filing dates. All of this is contained in Publication 1518. Each page highlights different tax issues and tips that may be relevant to small-business owners, with room on each month to add notes, state tax dates or business appointments. You can also download the tax events into your calendar or subscribe to the tax calendar events. The calendar provides the small business owner with a ready resource for meeting their tax obligations.

IRS Audit Guide:

"Your Guide to an IRS Audit” takes you through the steps of an audit from notification to closing and demonstrate the stages of each type of audit: correspondence, office and field. The videos address issues that are common to audits of small businesses.

Virtual Small Business Tax Workshop:

The IRS Virtual Small Business Tax Workshop is an interactive resource to help small business owners learn about their federal tax rights and responsibilities and consists of nine lessons that can be selected and viewed in any sequence.

The IRS Video Portal:

Tax questions? Tax topics are presented through video on the IRS Video Portal. The video portal contains archived versions of live panel discussions, archived webinars, video clips, and audio archives of national phone forums.

February 10, 2011

Federal Taxes: As A New Business Owner, What Do You Need To Know?

Here are a few links – which is not all-inclusive - to basic federal tax information for people who are starting a business, as well as information to assist in making basic business decisions. Other steps may be appropriate for your specific type of business.

Checklist for Starting a Business

Selecting a Business Structure (Sole Proprietorships, Partnerships, Corporations, S Corporations, Limited Liability Company (LLC))

Business Taxes

Selecting an Accounting Method


When Do I Start My Tax Year?

Employer Identification Number (EIN)

Establishing a Retirement Plan

Small Business Publications

Is it a Business or a Hobby?

February 7, 2011

As Taxpayers, We Have An Advocate At The IRS And California's Franchise Tax Board

The mission of the Taxpayer Advocate Service (TAS) is that as an independent organization within the IRS, it helps you resolve tax problems with the IRS and recommends changes that will prevent the problems from happening again.

The California Franchise Tax Board also has a Taxpayers' Rights Advocate for California tax problems.

Here are seven things you should know about the TAS:

1. The service is free and confidential.

2. TAS employees know the IRS and how to navigate it. It will listen to your problem, help you understand what needs to be done to resolve it, and stay with you throughout the tax resolution process until your problem is resolved.

3. TAS helps you when your tax problems are causing financial difficulty or significant cost, including the cost of professional representation. This includes businesses as well as individuals.

4. You may be eligible for TAS help if you believe an IRS procedure just isn't working as it should or you have tried to resolve your tax problem through normal IRS channels and have gotten nowhere.

5. TAS is your voice at the IRS.

6. TAS has at least one local taxpayer advocate in every state. You can call your local advocate, whose number is in your phone book, in Publication 1546, Taxpayer Advocate Service -- Your Voice at the IRS, and on its website at Contact Your Advocate. You can also call a toll-free case intake line at 1-877-777-4778.

7. You can learn about your rights and responsibilities as a taxpayer by visiting the TAS online tax toolkit at www.taxtoolkit.irs.gov.

February 3, 2011

Tax Penalties In California

California has almost 70 different types of penalties it can impose in the area of tax. The California Franchise Tax Board has a "penalty reference chart" which provides the name of the tax penalty, the California Revenue and Taxation Code Section on which the penalty is based, the equivalent Internal Revenue Code Section, the reason for imposition of the penalty and the penalty computation. The penalty reference chart is here.

Some of the FTB penalties are for the following types of things:

Limited Liability Company (LLC) Fee Estimate Penalty

Withholding Penalties

Unqualified or Suspended Corporation Doing Business in this State

Underpayment of Estimated Tax (Addition to Tax)

Failure to File Correct Information Return

Frivolous Proceedings; Failure to Exhaust Administrative Remedies

Noneconomic Substance Transaction Understatement

Failure of Exempt Organizations and Trusts to File Annual Information Return

There are plenty more listed in the FTB chart.