California FTB Not Interested in Simplification

So who cares about simplification, says California’s Franchise Tax Board.  In fact, why not make things more complicated?

That seems to be the attitude, as demonstrated in FTB’s latest volley, this week, in the form of a proposal to request yet additional information relative to real estate taxes deducted by California filers.

Seems FTB thinks they need to know the address of the property in question, and the assessor’s parcel number. “Who cares?” you ask.

We guess FTB doesn’t have to give you any reasons – doggone it, they just must have this information – but only for residences or other property held for investment or personal purposes.  Properties accounted for on Schedules C, E, and F of your tax return have been exonerated for some reason.

And while we’re beating up on the Franchise Tax Board, let’s give ’em a little credit for the largesse they’ve recently shown to folks forced into a “short sale” of their real estate.

Generally, people in this situation have more debts than they can handle – perhaps even to the Great State of California for unpaid income taxes.  And generally, such unpaid taxes lead to the filing of a lien against the property by FTB – which obviously can be a significant complication in transferring title in a “short” or any other form of sale.

But thank goodness for small blessings – FTB has actually expressed its position that it will play ball, and execute a partial lien release so as not to impede the sale.  If this is you, contact the “Lien Resolution Unit” and provide the documentation they want, which will include, among other things:

  1. A letter of explanation outlining the reasons for your request;
  2. Copy of estimated closing statement,
  3. Appraisal of the property, and
  4. Evidence of the lender’s short sale approval

And finally this week, from our “we’ve never seen a tax we didn’t like” department,

comes that flamboyant former Obama crony, Rahm Emanuel, presently mayor of Chicago, whose “Rahm Tax” would apply to certain “luxuries,” including limo rides, pet grooming and other services.  And in typical liberal smart-alec fashion, Emanuel noted, recently, in defending this proposition, that “Even the dog knows it’s wrong to give tax preferences for mango-scented doggy facials but not for single moms struggling to buy school supplies.”

Could Warren Buffett have said it better?

CONSULT YOUR TAX ADVISOR – This article contains general information about various tax matters.  You should consult your CPA regarding the implications to your own particular situation.

Jeff Quinn, the author of this article, is a shareholder in Ashley Quinn, CPAs and Consultants, Ltd., with offices in Incline Village and Reno.  He can be reached at 831-7288, welcomes comments at jquinn@ashleyquinncpas.com, and invites readers to consider his other commentaries at http://blog.nolo.com/taxes/.

Leave comment