California Income Tax – Franchise Tax Board

California Franchise Tax Board Attorney

The California Franchise Tax Board (FTB) is the organization responsible for administering and enforcing the individual and corporate income tax laws in the state of California.

This includes individuals who are California residents (California taxes them on all of their income) and those who are not residents of California (they are taxed on their California State Income). The Franchise Tax Board uses a variety of policies and procedures, many modeled after the IRS, for the administration, examination, and collection efforts on taxpayer accounts.

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Frustrations with the Franchise Tax Board

Many taxpayers become frustrated when dealing with Franchise Tax Board for a variety of reasons.

  • There is a perception among some taxpayers that the Franchise Tax Board is even more aggressive than the IRS.
    • In truth, the Franchise Tax Board takes delinquent collection accounts very seriously and will use any and all legal means authorized to collect on an account. Generally in practice, we have found the Franchise Tax Board to be more difficult to deal with than IRS collections.
  • Franchise Tax Board collections representatives are generally more demanding in their deadlines and more aggressive in their collection methods.
  • Franchise Tax Board financial statements require more information and other disclosures than their IRS counterparts. Taxpayers must normally make a much greater disclosure of sensitive financial information than they would otherwise have to make with the IRS.
  • The Franchise Tax Board can be slower to resolve issues than the IRS with more levels of administrative review and more hurdles to clear. This is particularly true when attempting a California State tax settlement, which may up to or over a year to get approved.

Franchise Tax Board Nuances

The California Franchise Tax Board also has a few nuances when it comes to their examination division.

For example, since California does not have the same amount of resources to audit taxpayers, many times they will simply piggyback off the results of an IRS audit. Sometimes, however, the Franchise Tax Board will focus in on certain issues where there is a higher taxpayer margin for error.

Transactions are a frequent target of Franchise Tax Board audits, including capital gains/losses and 1031 exchanges.

In addition, California tends to lean on information that is found at the state level:

  • DMV records
  • Property tax records
  • Other state specific disclosures…

… when reviewing issues for audit.

Franchise Tax Board audits generally require a very detailed review of the taxpayer’s records and other sensitive financial information and can move very slowly, depending on the auditor.

Experienced Franchise Tax Board Representation

Brotman Law has a wide range of experience as an attorney dealing with the California Franchise Tax Board and a history of successful outcomes for clients. He is a familiar with the nuances of the Franchise Tax Board examination and collections divisions and has attorney specific knowledge in the areas of California Tax Procedure and California Tax Litigation.

We handle the following issues with respect to the Franchise Tax Board:



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