California counties will not automatically reassess homes due to the recent fires, because the law requires that the counties first receive an application from the homeowner. Those who lost property will need to file the appropriate county casualty abatement form for the 2016-2017 year.
No one is beyond the certainty of taxes, as a priest for the Roman Catholic Diocese of San Jose, California, discovered last week. Hien Minh Nguyen was sentenced to 36 months in prison for taking cash and checks donated to the Diocese by parishioners and depositing them into his personal bank account to pay for personal expenses. The court found that the priest embezzled a total of $1.4 million from the Catholic Church and, by concealing the embezzlement from his return preparer, evaded over $500,000 in income taxes owed to the IRS.
On September 25, 2017, Governor Brown signed S.B. 813 into law, which, effective January 1, 2018, expands the existing California state voluntary disclosure program to include out-of-state trusts with California beneficiaries and non-resident partners. Such taxpayers will now be eligible to use the voluntary disclosure program to bring non-California trusts into compliance with California state tax laws. In addition, the Franchise Tax Board (FTB) may waive late-filing penalties for certain types of entities and returns under the program.
On October 2, 2017, California Governor Jerry Brown signed SB 36, the fee bill for the State Bar of California, into law. This year's annual attorney licensing fee bill includes major reforms for the agency, including the separation of voluntary sections into a new, private non-profit entity. The Board of Trustees will transition to being composed entirely of trustees appointed by the California Supreme Court, Legislature, and Governor. Attorneys will no longer elect any of the trustees. The Supreme Court will appoint the Board's Chair and Vice Chair.
According to the October 2017 newsletter of the California Franchise Tax Board, beginning in January 2018, California taxpayers will be able to e-file amended individual returns for tax year 2017 and later on a new Schedule X, California Explanation of Amended Return Changes. The Form 540X will be eliminated going forward, but you will still need to paper file Forms 540X to amend returns for prior tax years.
As we inch closer to the January 1, 2018 official changeover of many responsibilities from the Board of Equalization to California's two new tax agencies (the Department of Tax and Fee Administration [TFA], and the Office of Tax Appeals [OTA]), legislators are refining and narrowing the details of future responsibilities and processes for taxpayers to avail themselves of these administrative bodies.
The California Supreme Court issued a ruling on August 28, 2017 in California Cannabis Coalition v. City of Upland that may have created a loophole for special interests to get around the limitations on tax increases established by Propositions 13 and 218. In the instant case, an initiative was proposed in Upland, California to repeal an ordinance banning medical marijuana dispensaries and instead allow up to three dispensaries to obtain permits, subject to an "annual Licensing and Inspection fee" totaling $75,000. Since this fee exceeds the costs incurred by the government for issuing the license, it is considered a general tax. Normally, such taxes can only be heard at general elections, but an exception was made and the initiative was voted on in a special election.
The Financial Crimes Enforcement Network (FinCEN) announced on August 22, 2017 that it will be targeting shell companies purchasing luxury properties for $2 million or more in the California counties of San Diego, Los Angeles, San Francisco, San Mateo, or Santa Clara. Luxury property purchases in certain counties in Texas, Florida, New York, and Hawaii will also be under scrutiny per FinCEN's recent Geographic Targeting Order.
The California Franchise Tax Board (FTB) recently released an update on the current state tax filing season. The number of personal returns that were e-filed in 2017 increased by one percentage point as compared to 2016 (88% in 2017, and 87% in 2016). Some 133,400 people used CalFile to file returns this year, and 95% of CalFile users found that the program was easy to use and understand.
The Franchise Tax Board has updated its cost recovery fees, which are assessed against individuals and business entities when they fail to file tax returns upon demand or fail to pay their delinquent taxes. The filing enforcement fee for individuals and most entities will be $84, and the collection fee will be $287. For corporations and LLC's treated as corporations, the filing enforcement fee will be $85 and the collection fee $374.