RECENT CALIFORNIA LLC FEE ISSUES AND WARNING FOR NONFILERS: HERE COMES THE NOTICE!!

Recent LLC Issues

I have been handling a number of California income tax issues lately, especially for limited liability companies, single member limited liability companies (SMLLC) and tiered structures.  Compliance issues such as when a LLC and SMLLC are subject to the $800 minimum tax and LLC fee; how do tiered structures mitigate the possibilty of double-taxation (LLC fee on same gross receipts); apportionment method options for determining California receipts for LLC fee calculation; and determining eligibility and utilizing a voluntary disclosure agreement, etc.

Non-Filers
Hence, when I saw this news release today by the California Franchise Tax Board (FTB), I thought I would mention it.

According to the news release, the FTB is contacting more than 90,000 California business entities that have not filed their 2011 state income tax returns.

Businesses contacted by FTB will have 30 days to file a tax return or show why there is no filing requirement. Taxpayers who do not file tax returns or demonstrate to FTB that they are not required to file will receive a tax assessment based on income and other information that was reported to FTB.

Each year FTB reviews more than 5 million income records received from the IRS, the State Employment Development Department, the State Board of Equalization, financial institutions, and other businesses. FTB matches this information against its tax records to identify noncompliance. Last year, FTB collected approximately $23 million from businesses that failed to file tax returns.

For more information go to California's website.

This blog

Brian Strahle is the owner of LEVERAGE SALT, LLC where he provides state and local tax technical services to accounting firms, law firms and tax research organizations across the United States.  He also writes a weekly column in Tax Analysts State Tax Notes entitled, "The SALT Effect."  For more info, visit his website: www.leveragestateandlocaltax.com

You can reach Brian at strahle@leveragesalt.com.

Connect with Brian on LinkedIn. Follow Brian on Twitter. Join the Leverage | SALT LinkedIn Group, connect and contribute with your colleagues!  

Because state and local taxes are deceptively simple and endlessly complicated.

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