LLCs, LPs, and LLPs: Beware of California!
California has released a Public Service Bulletin (10-24), stating beginning August 2010, the Filing Enforcement Section will start mailing Demand for Tax Returns to Limited Liability Companies, Limited Partnerships, and Limited Liability Partnerships.
According to the Bulletin, this is the third and final phase of California's business entity nonfiler expansion, which was part of the 2007 and 2008 tax gap augmentation. The two previous phases included using Federal Forms 1098, 1099, and K-1 data as new income sources for business entity nonfilers.
Notices of Proposed Assessments will be sent to taxpayers that do not file or provide information showing they do not have a filing requirement.
California is planning on mailing the first notices between October and December 2010.
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 firstname.lastname@example.org.
Because state and local taxes are deceptively simple and endlessly complicated.