New FTB Notice May Alarm Clients

This Week's News

January 19, 2018


Recently, Members have been reporting that their clients have received a notice from the FTB regarding itemized deductions for medical expenses, charitable contributions, employee business, and/or miscellaneous expenses. FTB has confirmed that they are sending these notices out and they can be addressed to only one spouse of a joint return. You can see an example of one of these letters
here. The practitioner who submitted this example also told CSEA that the taxpayer’s deductions fell within the normal range for their AGI, and were not out of line for "what would be expected” as the letter stated.

When asked about these notices, FTB directed us to the December 2017 edition of FTB Tax News, where you can read about the purpose of these notices and FTB’s explanation for their distribution under the second heading, “Information Letters.”

 

These letters do not require any action on the part of your client but are intended to “nudge” your client to adjust their withholding, curtail certain deductions, and/or change estimated tax payments. According to FTB, their intention in sending these letters is to “provide information about how to prepare returns in accordance with our mission to help taxpayers file timely and accurate tax returns, and pay the correct amount of tax and nothing more to fund services important to Californians."

 

CSEA will continue to monitor the distribution of these “Information Letters,” and if you have any additional questions please reach out to either Advocacy & Governance Coordinator Brian Pedersen at bpedersen@csea.org or the FTB’s Taxpayers Right’s Advocate office.