Multistate Audit Procedures Manual
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CALIFORNIA FRANCHISE TAX BOARD Internal Procedures Manual Page 1 of 23Multistate Audit Procedures Manual 18000 AUDIT TOOLS MAPM 18010 Telephone Calls MAPM 18020 Facsimile Usage (Fax) MAPM 18025 Power of Attorney MAPM 18030 Taxpayer Requests Copy Of Corporation Return MAPM 18040 Taxes Administered - Franchise Tax Non-Qualified Corporations MAPM 18050 Corporation Identification Number MAPM 18060 Common FTB Addresses MAPM 18070 Express Mail MAPM 18080 Research Procedures MAPM 18090 Outsearch MAPM 18100 Research And Reference Guide The information provided in the Franchise Tax Board's internal procedure manuals does not reflect changes in law, regulations, notices, decisions, or administrative procedures that may have been adopted since the manual was last updated. CALIFORNIA FRANCHISE TAX BOARD Internal Procedures Manual Page 2 of 23Multistate Audit Procedures Manual 18010 TELEPHONE CALLS Auditors are required to answer telephone calls. The calls may be either a general question concerning the application of the California Revenue and Taxation Code or inquiries concerning a problem involving a specific taxpayer. NOTE: WE DO NOT ACCEPT COLLECT CALLS. In the case of general questions, the auditor will normally be able to answer the question that is being asked; however, if not certain of the correct answer, refer the call to the appropriate unit. If the caller's question cannot be referred to a specific unit, refer the ...
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| Publié par | Choud |
| Nombre de lectures | 16 |
| Langue | English |
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CALIFORNIA FRANCHISE TAX BOARD Internal Procedures Manual Multistate Audit Procedures Manual
18000 AUDIT TOOLS MAPM 18010 MAPM 18020 MAPM 18025 MAPM 18030 MAPM 18040 MAPM 18050 MAPM 18060 MAPM 18070 MAPM 18080 MAPM 18090 MAPM 18100
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Telephone Calls Facsimile Usage (Fax) Power of Attorney Taxpayer Requests Copy Of Corporation Return Taxes Administered - Franchise Tax Non-Qualified Corporations Corporation Identification Number Common FTB Addresses Express Mail Research Procedures Outsearch Research And Reference Guide
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CALIFORNIA FRANCHISE TAX BOARD Internal Procedures Manual Multistate Audit Procedures Manual 18010 TELEPHONE CALLS Auditors are required to answer telephone calls. The calls may be either a general question concerning the application of the California Revenue and Taxation Code or inquiries concerning a problem involving a specific taxpayer. NOTE: WE DO NOT ACCEPT COLLECT CALLS. In the case of general questions, the auditor will normally be able to answer the question that is being asked; however, if not certain of the correct answer, refer the call to the appropriate unit. If the caller's question cannot be referred to a specific unit, refer the call to your lead or supervisor, or obtain the caller's telephone number and call back with the answer. In the case of inquiries involving an audit problem with respect to a specific taxpayer, it is seldom possible to give an adequate answer without first reviewing the taxpayer's file to determine the particular data that has been requested. Obtain the caller's telephone number and tell the caller that you will review the case and call them back. When discussing a case under audit, an Audit Public Contact Memo must be recorded showing the caller's name, telephone number, the exact corporate name, the corporate number (if known), and a brief summary of the information that is requested or discussed. If the corporation has been suspended and the question involves the payment of back taxes in order to revive the corporation, the call should be transferred to or referred to the Revivor Unit. Requests for information concerning the taxpayer address, the names and addresses of any of the corporate officers or similar information may be referred to Data Services. For information on what can be disclosed during a telephone conversation, see MAPM 2020 .
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CALIFORNIA FRANCHISE TAX BOARD Internal Procedures Manual Multistate Audit Procedures Manual 18020 FACSIMILE USAGE (FAX) The auditor may receive a FAX by two methods: as an Email FAX message via the PASS server or on the unit’s FAX machine. The PASS desktop provides the ability to electronically transmit documents between Audit staff and tax filers using a facsimile system (FAX) for the transmission and reception of document images. The PASS Desktop provides FAX capability in two ways 1) when working on a laptop, auditors are able to send faxes using Microsoft FAX; and 2) when connected to the PASS Desktop network, auditors are able to send/receive faxes using the PASS FAX server. Auditors are able to send faxes from Microsoft Word or Excel using the “Send option and specifying a FAX number instead of a user as the destination. State law protects confidential taxpayer information including, but not limited to, social security numbers, telephone numbers, credit card number. When sending correspondence by facsimile, use a cover sheet to protect this information. Remember faxed or photocopies of waivers are evidence that a taxpayer agrees to extend the statute of limitations. However, unless the auditor receives the original document, a faxed copy is not accepted as anything other than evidence of intent. FAXES RECEIVED OR SENT VIA UNIT S FAX MACHINE ’ Hard copies of FAX material will be handled as regular correspondence. The Auditor will record the correspondence as received in the “Received Correspondence Window of PASS and cancel any ticklers, as applicable. Select the attachment option to create a WORD document that will act as a placeholder in the electronic file for the paper correspondence. This WORD document may contain any information the auditor determines to be necessary, but at the minimum should include 1) the date the correspondence is received by FTB and 2) a description of the correspondence. (i.e. a five-page letter from representative or a two-page letter from taxpayer and the following attachments.) NOTE: the event log will indicate the date the letter was recorded in PASS as received, not the actual date the auditor received the letter. Therefore, it is important that the auditor log correspondence as received in PASS as soon as the correspondence is received. FAX SENT OR RECEIVED THROUGH PASS
CALIFORNIA FRANCHISE TAX BOARD Internal Procedures Manual Page 4 of 23 Multistate Audit Procedures Manual Auditors, who have access to PASS, have an internal Fax # (916) 843-XXXX in their personal computer. This Fax number should be used so faxed information sent and received will become a permanent document within the taxpayer’s PASS audit file. SENDING A FAX * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * To fax a document that is created outside of PASS: 1. Go into your MS Outlook and create a New Message. Click the "To" button and Click on the "New Button." Highlight the "Fax Address" button and enter the requested information (Name, Fax Number, Office, et.) You do not have to use a "9" to get an outside line when using the fax. Also, select the radio button for "this message only" unless you want to add this fax number to your personal address list. 2. Next, click the "To" button and this will take you back to the New Message. Create your fax as you would any other document. Click the Send button. If your fax goes through correctly, you will receive a "thumbs up" confirmation from the recipient in MS Outlook. If your fax does not go through, you will also receive notification in MS Outlook. RECEIVING FAXES VIA MS OUTLOOK When receiving faxes, a "New Message" will appear in your MS Outlook inbox from "Faxination." Open this message and double click on the "picture" of the document. The document may be upside down and you will have to use the toolbar buttons with the opposing arrows to correct the angle. The toolbar also allows you to shrink or enlarge the document, view the layout of each page (although very small), and turn from page to page. These faxes should be input into the PASS file with the * * * * * * * * * * * * * feature. Copy and paste the faxed document by double clicking on the first page of the fax, then select "Copy Page" from the edit menu. Print an actual copy of the FAX and place it in your hard copy workpaper file. Open your inventory and open the primary case unit. To paste the fax in
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CALIFORNIA FRANCHISE TAX BOARD Internal Procedures Manual Multistate Audit Procedures Manual PASS, use the button "Receive Correspondence," and click the "attach document" button. Select the Correspondence Received template. Name the document according to cross-referencing workpaper sections and click OK. Paste the faxed document into the section <<Place bitmap correspondence here>>. Print the Word document template and place it on top of the printed copy of the FAX correspondence. Save and close the Word document and return to PASS. Complete the From, Subject and Comment fields and click "OK" to close the received correspondence window. It is now all right to delete the MS Outlook FAX mail message. . * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * NOTE: ((* * *)) = Indicates confidential and/or proprietary information that has been deleted.
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CALIFORNIA FRANCHISE TAX BOARD Internal Procedures Manual Multistate Audit Procedures Manual 18025 POWER OF ATTORNEY The disclosure of confidential information is authorized only to the taxpayer to whom the information pertains, and the taxpayer's authorized representative. The designation of a representative can be established through the execution of a Power of Attorney. The Power of Attorney Form 3520 is the general form for obtaining powers of attorney for individuals, corporations, partnerships, LLCs and others. The Power of Attorney authorizes, subject to revocation, the taxpayer's representative to receive confidential information and to act on behalf of the taxpayer in tax matters. For corporations, a principal officer of the corporation must sign the Power of Attorney. A principal officer is the president, vice-president, secretary, treasurer, and secretary-treasurer. A tax manager is not necessarily a principal officer, so it should be verified who is signing for the corporation. An individual who was a principal officer of the corporation for the tax years under examination, but who is not currently a principal officer may not sign the power of attorney. The Power of Attorney (Power of Attorney) has been revised several times over the years. An older version of this form contains language that may cause confusion. Side 2 of the Power of Attorney Form 3520 provides a place for the taxpayer to limit the time the POA remains in effect. Generally, if no time limit is indicated, the POA remains in effect until the taxpayer revokes it or until final resolution of all tax matters stated on the form. However, the 11/93 revision of the form also contained the following language n the time limit section: "If no time limit is specified, this Power of Attorney will be effective for one year from the signature date." It is important to pay close attention to the language and version of any POA forms used in case files. The Problematic language appears to be only on the 11/03 version and was removed as of the 9/94 revision date. If the older version of the form was used in a file, verify the correct statute date and obtain another POA , if necessary. Processing Procedures As of August 1, 1999, the Franchise Tax Board established a centralized POA database and a POA Unit to handle all the processing and maintenance of POA documents. The unit acts as the department's primary point of contact for handling and tracking POA documents, and maintains paper copies of the documents for an appropriate retention period. When reviewing a POA document, please keep in mind: The Department's Taxpayer Signature and Authentication Policy does NOT require an original signature on the Power of Attorney if there is no reason to suspect that the form has been
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CALIFORNIA FRANCHISE TAX BOARD Internal Procedures Manual Multistate Audit Procedures Manual forged or is otherwise invalid (FTB Policy File 9140, October 1994. <http://ftbnet/policy/9140.htm>). The internet version of the Power of Attorney form (FTB 3520) shows the address of the Power of Attorney Unit. If your taxpayer or representative uses this form, remind them to send the Power of Attorney directly to you, instead of the address on the form. Do not forget to send a copy to the POA Unit within 24 hours of receiving the POA. 1. Additional addresses for the POA Unit: If you received a Power of Attorney through the network fax (Outlook), you can forward this directly to the POA Unit using this email address: "POAFX". POA Unit's network fax: (916) 845-9511 . o Do not forget to include your contact information in case the POA Unit needs to reach you. If the POA form is received via the Post Office boxes that are routed through Receiving, they will be date stamped with the received date and forwarded to the POA Unit on daily basis. Note: Receiving does not make copies of the POA . The POA Unit will key the information to the database within five working days. Faxed POA forms will be keyed within 24 hours. Anytime an auditor receives a signed POA, they should forward a copy to the POA Unit at MS C-2 or FAX a copy to (916) 845-0523. The copy should be sent WITHIN 24 hours of receipt. The original should be retained for the audit file. If you receive a POA form directly from a taxpayer or their representative, follow the procedures listed below:
Power of Attorney received is COMPLETE It must include: • authorization for use by FTB, specific tax years, • • representative acts authorized, and
Form is Acceptable: • FTB POA Form 3520 • BOE POA Form 392 • IRS POA Form 2848 • Durable POA • Handwritten POA
• Write or stamp the received date on the POA • Route a copy to POA Unit - (MS C-2) Or
CALIFORNIA FRANCHISE TAX BOARD Internal Procedures Manual Page 8 of 23 Multistate Audit Procedures Manual taxpayer signature. •
Power of Attorney received is INCOMPLETE The missing information must be obtained from the taxpayer before the Power of Attorney can be effective.
Requesting Original POA Document
• Correspondence
• Taxpayer signature is missing, • Specific tax years are missing, • Representative "Acts Authorized" are missing.
9511 Note: Retain the original POA, photocopy the POA and mark as "Copy". Once complete: • Note corrected information on POA form in GREEN and initial in top right corner • Route to POA Unit with "RUSH" handling - MS C-2 or fax document to POA Unit at ext. 0523 with cover note. POA unit will enter the POA into the database. Contact the POA Unit.
CALIFORNIA FRANCHISE TAX BOARD Internal Procedures Manual Page 9 of 23 Multistate Audit Procedures Manual 18030 TAXPAYER REQUESTS COPY OF CORPORATION RETURN Taxpayer Requests Copy Of Corporation Return Effective July 1, 2003, the Franchise Tax Board raised the fee it charges for providing copies of business entities income tax returns. The fee is to cover our costs of handling requests, copying documents, and postage. (R&TC Section 19561.) The new fee for business entities is a flat $20 per tax return. The new fee is based on the average actual cost of providing this service to taxpayers. To obtain a copy of a tax return, the taxpayer must: • Submit a Request for Copy of Tax Return form (FTB 3516). This form is available on our Website at: www.ftb.ca.gov . If the auditor receives a request for a copy of a tax return under audit, the auditor should: o Send the fee and the form FTB 3516 to RID Unit Corp MS C-2. o Make a copy of the return and provide it to the taxpayer. • Submit a fee of $20 for each tax return being requested. We will no longer waive the fee for tax returns requested during or after an audit. The only exception for waiving the fee is if the taxpayer is a victim of a designated California State or Federal disaster. The mailing address for requesting business entity return copies is: RID Unit Corp MS C-2 Franchise Tax Board PO Box 1468 Sacramento CA 95812-1468 Requests for copies of audit reports should be referred to the Disclosure Office. See MAPM 2030.
CALIFORNIA FRANCHISE TAX BOARD Internal Procedures Manual Multistate Audit Procedures Manual
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18040 TAXES ADMINISTERED - FRANCHISE TAX NON-QUALIFIED CORPORATIONS Corporations which are "doing business" in California and are not incorporated in the state or are not qualified by the Secretary of State are subject to the Franchise Tax. These corporations are identified as "NQFT." These corporations file returns on a voluntary basis and the Business Entity Section, Inventory Control Unit, assigns them a 95 identification number. Corporations which are not incorporated in California and are not "doing business" in California, but are deriving income from California sources are identified as "NQIT." These corporations file returns on a voluntary basis and the Business Entity Section, Inventory Control Unit, assigns them a 97 identification number.
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18050 CORPORATION IDENTIFICATION NUMBER The 90, 91, 92, 93, or 94 identification numbers assigned by the filing enforcement program do not signify whether a corporation is doing business or deriving income in California. The corporation will be classified as an NQFT or NQIT. The filing enforcement number is not changed unless the corporation is later qualified by the Secretary of State. The corporate number remains unchanged in order to identify the corporation as being part of the filing enforcement program. If it is determined that the corporation is doing business in California, the commencing tax should be assessed without changing the identification number and the classification should be NQFT. These cases may be referred to the filing enforcement auditor or may be examined upon a general audit of the return. For information on Non-Qualified Corporations, see MAPM 18040.
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