On Monday, September 9, 2024, the California FTB approved proposed amendments to California’s personal income tax code. This proposed rule would impose California income tax on non-resident/non-employee corporate...more
The California State Legislature overturned Microsoft’s recent win at the Office of Tax Appeals, which held that the gross amount of dividends received from foreign affiliates outside its water’s-edge group should be included...more
The May Revision of California’s 2024-2025 state budget seeks to block refund claims, worth approximately $1.3 billion for historical tax years, and $200 million per year going forward, by codifying informal guidance recently...more
The California Franchise Tax Board (FTB), California Department of Tax and Fee Administration (CDTFA) and California Employment Development Department (EDD) announced tax relief for certain California counties affected by...more
The Office of Tax Appeals (OTA) handed Microsoft an enormous win in its controversy with the California Franchise Tax Board (FTB) over the inclusion of qualifying dividends in the sales factor denominator for which it also...more
What does the recent OTA ruling tell you about a California tax audit? What can we learn from the results of an investigation by the Office of Tax Appeals (OTA) into the practices of a California tax agency? Why do you need...more
A California trial court granted summary adjudication in the American Catalog Mailers Association’s (ACMA) action against the Franchise Tax Board (FTB), invalidating FTB guidance that says certain online activities exceed the...more
What are the statute of limitations on an IRS audit and a California tax audit? There is a time limit, known as the “statute of limitations“, when the IRS and/or California must complete an audit of your tax returns. It is...more
Clients frequently come to us while in the process of selling interests in California-based businesses. Clients who are not residents of California typically expect that they will not be subject to California income tax on...more
As practitioners predicted, the California Franchise Tax Board has adopted the federal November 16, 2023 extensions for similar state returns and payments. To those CPAs and taxpayers who pulled all-nighters to get returns...more
A California trial court denied summary judgment in the American Catalog Mailers Association’s (ACMA) action that seeks to invalidate Franchise Tax Board (FTB) guidance that says certain online activities exceed the...more
On July 10, 2023, California Governor Gavin Newsom signed into law S.B. 131, which included a provision targeting the California state income tax treatment of incomplete gift non-grantor trusts ("INGs"). Under the prior law,...more
The California Office of Tax Appeals (OTA) recently held that a California resident’s income tax paid to Massachusetts from the sale of his membership interest in a limited liability company (LLC) doing business in...more
In addition to the tax relief announced in January, the California Franchise Tax Board (FTB) has automatically extended the income tax filing and payment deadlines for businesses and individuals affected by severe winter...more
March Update - As another deluge of storms ravages California and the Southeast, the Internal Revenue Service (IRS) on February 24, 2023 announced a further extension of the May 15 tax deadline to October 16, 2023 for...more
Under California Governor Gavin Newsom's proposed 2023-2024 state budget, released on January 10, 2023, the income of an incomplete gift non-grantor trust (ING Trust) may now be subject to California income tax, effective on...more
In the Appeal of Sheward, 2022-OTA-228P (May 25, 2022), the California Office of Tax Appeals (OTA) held the California Franchise Tax Board (FTB) failed to follow its own market-based sourcing apportionment regulation by...more
The California Court of Appeal held a nonresident S corporation shareholder’s pro rata share of gain on the sale of goodwill classified as business income by the S corporation has a California source and is subject to tax for...more
A California state appellate court recently upheld the trial court's decision in The 2009 Metropoulos Family Trust v. Franchise Tax Board that nonresident shareholders of an S corporation source gain on the S corporation's...more
In IRS Notice 2020-75, the IRS invited the states to circumvent the $10,000 limit on the deduction of state taxes by individuals, trusts, and estates for purposes of calculating federal income tax by permitting the states to...more
This week, the Ninth Circuit takes a close look at a sizable antitrust jury award, and explains what constitutes a tax “return” for purposes of bankruptcy law. OPTRONIC TECHNOLOGIES, INC v. NINGBO SUNNY ELECTRONIC CO....more
During the week of March 15, both the Internal Revenue Service and the California Franchise Tax Board extended the deadlines for individual taxpayers to file their 2020 income tax returns and pay their 2020 taxes from April...more
Shortly after I moved to Texas from Washington, D.C., a federal judge called me about a potential conflict with a party in a lawsuit I just filed. Once the conflict was resolved, and recognizing I didn’t have a Texas accent,...more
Since 2017, the California Franchise Tax Board has been working on revisions to its regulations for market-based sourcing regulation for income from services and intangibles and for petitioning for alternative apportionment....more