California Tax Board Rant

Next up in the rant department is the California Franchise Tax Board which is in charge of collecting California's income tax.  Bottom line, if you have a problem with your California taxes call the taxpayer rights advocate number.  Apparently it exists because the regular process is often an ordeal.

While I live in New Jersey my employer has a location in California where I have worked several summers most recently in 2019.  This requires me to file a non-resident income tax form with California and pay the appropriate tax on my California wages.  I use TurboTax to do my income taxes.  However TurboTax only includes one state income tax return.  Additional states can be purchased but being cheap when doing my 2019 taxes I filled out the California non-residence forms myself.  Unfortunately I made a small error.

My California return included form 540NR and schedule CA.  540NR is the main form, the purpose of schedule CA is to reduce your allowed deduction based on the ratio of your California income to your total income.  After completing schedule CA you were suppose to copy two numbers back to form 540NR, your California income and your California taxable income after your allowed deduction.  Unfortunately I only copied the second number back which is the only number used going forward (and the only number schedule CA tells you to transfer back).  As a result I left line 32 of form 540NR blank but everything else including the tax owed was correct.

A few months later California sent me a refund check for my entire tax paid in 2019 and a notice that they had changed my return.  Apparently some computer program had seen the blank line 32 and ignoring everything else in the return had deduced I had no California income and therefore owed no California tax.  This was remarkably foolish as any human reviewing the return would have seen easily that it was line 32 that was wrong not everything else on the return.  And I think it would be a good idea for to have a human review computer changes rather than automatically send out a check for the entire tax paid.  I expect it is pretty rare for people to work in California, have substantial taxes withheld from their wages, submit a return with an additional payment but nevertheless actually owe no California taxes.

I didn't cash the refund check because I knew it was sent in error and starting calling the California tax help number.  This involved long periods (a hour or more) on hold.  California supposedly had a call back system but unlike Amtrak's it didn't work properly, my phone would ring once and then go to voice mail.  Eventually I got through to someone but they were not very helpful.  For some reason although what had happened should have been obvious they required I submit a written explanation.  I did this but made another error in that I didn't include an entire corrected return.

After hearing nothing for months I called again and when I eventually reached a representative they disclaimed all knowledge of my letter of explanation, apparently because I hadn't precisely followed their amended return process it had just been thrown away.  So I sent another written explanation this time including a formal amended return.       

After another long delay California sent me a letter changing my tax owed back to the amount I had originally calculated adding interest and fees and demanding payment.  After trying and failing to reach someone at the regular help number I eventually tried the taxpayer rights advocate number.   This quickly reached a representative who put a hold on my account and told me that I could resolve the situation by returning the refund check (which fortunately I still had).  I did this.

After a long vacation I tried calling back the person I had talked to.  This took several attempts (apparently they don't check their voice mail) but eventually I got through.  California had received the returned check and this had in fact resolved the situation. I requested (and eventually received) a statement showing a zero balance. 

The whole experience was infuriating.  Liberals claim to be the good government party but they often show little interest in the (no doubt boring) job of making government work well.  Democrats claim that Republicans have kept the federal IRS underfunded and perhaps that is true.  But there is no such excuse for California, the Democrats have had complete control for a long time.  Nevertheless the California Franchise Tax Board appears to be totally incompetent.  Apparently good service just isn't a liberal priority.  This is shortsighted as it creates antigovernment feelings which reduces the popularity of the overall liberal agenda.