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FTB/CSEA Liaison Meeting

FTB/CSEA Liaison Meeting. September 17, 2004. e-Programs Update. Franchise Tax Board. Overview. Mandatory e-file Update Pro Forma Filing Pilot All the details. e-file Program - Growth. Mandatory e-file Update. Effective January 1, 2004

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FTB/CSEA Liaison Meeting

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  1. FTB/CSEA Liaison Meeting September 17, 2004

  2. e-ProgramsUpdate Franchise Tax Board

  3. Overview • Mandatory e-file • Update • Pro Forma Filing Pilot • All the details

  4. e-file Program - Growth

  5. Mandatory e-file Update • Effective January 1, 2004 • Mandates practitioners who prepared more than 100 returns, at least one of which was prepared using computer software, to e-file

  6. New Tax Practitioner Increase 12,689 16,112 23,882 38,682Number of Accepted Practitioners

  7. Mandatory e-file Nationwide

  8. Recent FTB survey shows: • Majority of tax practitioners are satisfied or very satisfied with e-file • 67% agree that e-file is easy • Majority indicate that clients benefit from e-file • Many indicate handling rejects can be difficult • Some indicate that e-file should not be mandated

  9. Approach to Enforcement: • Focus on willfully noncomplying practitioners • Sending reminder letters to noncomplying practitioners in late October • Visiting noncomplying practitioners • Publishing articles regarding the mandate

  10. Mandatory e-file Resources • Dedicated Web page for mandatory e-file • FAQs (updated regularly) • Legislative actions • Copies of notices in Spanish • Letter from FTB to give to your clients

  11. Pro Forma Filing Pilot

  12. What Is Pro Forma Filing? • Pro Forma return filing is a tax concept designed to reduce taxpayer burden for taxpayers filing the simplest California returns. • Current concept applies to: • Wage earners only • Single • No dependents

  13. Benefits of Pro Forma • Reduce taxpayer burden • Provide taxpayers online, secure and private access to their tax data

  14. Benefits of Pro Forma • Reach taxpayers who qualify for refunds who are not otherwise claiming them • Reach certain non-filers and get them into the routine filing process

  15. Other Pro Forma Experiences • Successful variations of pro forma filing in several countries including: • Germany • Japan • Denmark • Sweden

  16. Other Pro Forma Experiences • The IRS has studied pro forma filing and found: • Surveys indicate taxpayer support, however • IRS information systems cannot provide the data needed on a timely basis

  17. EDD Information • FTB routinely receives and processes EDD wage information, which makes us perfectly suited for a pro forma filing program

  18. How Will Pro Forma Work? • FTB will select a group of taxpayers to participate in the program, who must be: • Single • Have no dependents, and • Have one employer

  19. FTB Will: • Provide selected taxpayers with an invitation to participate • Two versions of the invitation: • Letter and completed return • Letter only

  20. The Taxpayer: • May choose to: - accept the return, as presented - make minor modifications - come to FTB’s Website to file or modify the return and file it - ignore FTB’s invitation

  21. The Taxpayer: • Will enter SSN* and signature (on the the paper return or online) • Indicating that all their tax data is true and correct under penalty of perjury • *In compliance with SB 25, SSN will not be preprinted on the letter or return. • SB 25 mandates that state agencies will not publicly post or display an individual’s SSN or compromise the security of an individual’s SSN.

  22. Why a Pro Forma Pilot? • Ability to deploy and test pro forma filing concept by February 2005 • Test taxpayer response to our new program • Make recommendation to our Board after studying pilot results

  23. Future Benefits • Provide more taxpayers and their authorized representatives with online, secure access to wage and withholding data

  24. Pro Forma Volumes • FTB would like about 10,000 participants, resulting in a statistically valid study • To achieve this, FTB may invite up to 50,000 taxpayers to participate who qualify to file a simple return

  25. Cost • The cost to deploy the Pilot is about $200,000 • No requests for new funding • Leverage existing FTB systems to accommodate pro forma filing

  26. Thank you!Cathy CleekChief, Filing Division916.845.6396cathy.cleek@ftb.ca.gov

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