EDITOR: On Feb. 19, the California Legislative Analyst’s Office
(LAO) recommended changes in the way the state handles requests for
tax information and the administration of E-filing.
EDITOR:
On Feb. 19, the California Legislative Analyst’s Office (LAO) recommended changes in the way the state handles requests for tax information and the administration of E-filing. These proposals have left many tax professionals seething, and could cost taxpayers time, money and patience.
Gov. Gray Davis has already proposed slashing funding for the Franchise Tax Board (FTB) by $17 million from current levels, to $445 million. The FTB administers California’s tax laws and other programs, including Homeowners and Renters Assistance Program (HRA), and oversees collection of child support and other court-ordered payments.
The FTB also maintains a telephone hotline for tax practitioners to call regarding clients’ accounts. These hotlines handle about 200,000 calls each year, and are helpful for determining income information, liens and other information necessary for the preparation of state tax forms. The LAO has asked the FTB to consider assessing an annual fee against tax professionals for use of the hotlines.
We’re trying to collect the correct amount of tax for the state, and the state wants to charge us for providing that service. I’ll tell my clients with questions to call the governor instead.”
Many tax professionals will have no choice but to pass the added cost on to taxpayers even though, given the current state of the economy, adding fees for services that are intended to hasten collection of tax revenues seems ludicrous.
The only way the Legislature will listen to reason is if the public gets wind that they’ll be forced to pay increased costs to have their tax returns correctly prepared and submitted.
The LAO also recommends that all tax practitioners who file 50 or more tax returns be required to E-file or face fines of $50 per return, which alarms many practitioners.
Many of my clients are generally suspicious of putting all their personal information on the Internet. How can we be guaranteed that a hacker or cyberterrorist could not succeed in getting information, or stealing identities.
Even those tax pros who do not object to filing returns electronically point out that sometimes, E-filing can be a nuisance, or impossible. I believe in E-filing and file every return possible via the Internet. But there are returns that cannot be E-filed, such as for deceased taxpayers. If you fill out Form 1310 (Statement of a Person Claiming Refund Due a Deceased Taxpayer) so that the state return can be E-filed, the federal return won’t go through.
Taxpayers should contact their local legislators and urge them to vote against any mandatory E-filing proposals and to oppose charging tax professionals to pay for FTB hotlines.
Enrolled agents are tax professionals licensed by the federal government to represent taxpayers and assist them with tax planning and tax return preparation.
Clifford Weimer,
California Society of Enrolled Agents
