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ABCast Episode 10 – California Tax Reporting and Controversy

Transcript Podcast Episode 4 – Transactional Planning

In our new ABCast Podcast Episode 10 – California Tax Reporting and Controversy Janathan Allen discusses 3 of the primary California tax agencies: Franchise Tax Board (FTB), the Employment Development Department (EDD) and the California Department of Tax and Fee Administration (CDTFA).

In this overview of California taxation, Episode 10 – California Tax Reporting and Controversy discusses all forms of tax including personal and business tax returns, payroll audits as well as sales and use taxes.  The discussion centers in on the process of an audit, the efforts of the EDD to identify employee misclassification and the impact of California taxation on internet transactions in the state.

The conversation begins with the Franchise Tax Board or FTB and that it is actually often more aggressive than even the IRS.  “In terms of compliance (the FTB) is far more aggressive than even the IRS.  This is especially true when you consider the length and breadth of the tax regulations in California is probably equal to, or more excessive than the federal tax regulations.  Jan goes on to explain the key to managing an FTB audit is in the way our firm carefully manages the information presented and an understanding of why the auditor is requesting specific information.  This allows us to influence the scope of an audit to prevent things from expanding forward (into the current tax year) or on a look-back basis.  It’s also important to understand that federal and state tax agencies communicate so an outcome in an FTB audit will inevitably lead to inquiries from the IRS and vice versa.

Episode 10 – California Tax Reporting and Controversy next turns to the Employment Development Department or EDD which primarily focuses upon payroll audits among other duties.  Payroll audits are quite common for California businesses and most companies will undergo an EDD payroll audit every three years.  The EDD is not only looking for compliance with state withholding requirements, but also into issues associated with the misclassification of employees as independent contractors or 1099 workers.

Finally, the podcast discusses the analysis of sales and use taxes by the California Department of Tax and Fee Administration (CDTFA).  Many operational businesses may overlook the impact of use tax on products employed during a given service.  Jan offers the example of use tax on the shampoo a salon may use in the process of an overall visit to their establishment.  The discussion also encompasses internet tax exposures generated by any company who transacts with California businesses or residents online.  Jan discusses the tactics of liens, levies and garnishments as a tool for tax agencies to collect unpaid taxes.

We invite you to listen to ABCast Episode 10 – California Tax Reporting and Controversy and hope you enjoy learning more about the tax services provided by Janathan L. Allen, APC as a part of the integrated offerings of Allen Barron, Inc. We invite you to meet with experienced San Diego tax attorney Janathan Allen by contacting Allen Barron, or call 866-631-3470 to schedule a free consultation.

ABCast Episode 10 - California Tax Reporting and Controversy