Spidell's Tax Season Tribune

Tax complexity started in 1952 — blast from the past

By Lynn Freer, EA
President

Remember when kids rolled around the back seat of the Pontiac without car seats, or when we only had black and white TV? Those were the simple days ... but not for taxes. In 1952, the FTB attempted to allay confusion when filing a joint tax return.

I'm not sure, but I think to file a joint return you divide everything in half and then multiply it by two. Take a look at this 1952 FTB instruction slip brought to us during seminar season by one of our attendees. (He didn't want his name mentioned because his friends don't know he's that old!)

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Our legislators at work: interesting legislation introduced this year

By Sandy Weiner, J.D.
California Editor

To date there have been over 2,500 bills introduced in the California Assembly (none of these have yet been enacted). Below are the "Top 5" most interesting bills in our book:

SB 328: A bill that every teenager and their parents will love, SB 328 would mandate that middle school and high school start times begin no earlier than 8:30 a.m.

AB 831: A bill that every small business could get behind, AB 831 would allow small businesses a deduction equal to $25 per each man-hour spent on compliance with state laws and regulations.

AB 1540: This bill would declare the Augustynolophus morrisi as the Official State Dinosaur. Believe it or not, eight other states have an official state dinosaur: www.mentalfloss.com/article/49144/8-official-state-dinosaurs

SB 73: Not to leave "The Californian," California's Official State Tall Ship, all by its lonesome, SB 73 would declare the "San Salvador" to be California's Official State Ship of Discovery.

AB 389: This bill would require the California Bureau of Marijuana to develop a Marijuana Consumer Guide. Maybe the bureau should look at some that have already been developed, like Cannabiz's "The Little Green Book."

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My office is the size of a closet! Wait ... it is a closet. Wait ... I don't have an office. Why am I in this closet?

By Kathryn Zdan, EA
Editorial Director

A BART janitor made over $270,000 in salary and benefits in 2015, including $162,050 earned by working overtime, sometimes working for 17 hours straight cleaning one of San Francisco's dirtier BART stations.¹ Noble, right? Except for the fact that large chunks of those work days were spent inside a supply closet.

Under closer investigation following the discovery of his whopping salary, the janitor, Mr. Zhang, was tracked via surveillance video, which showed him entering the closet and staying in there for up to 90 minutes, multiple times each day.

BART supervisors have been blasé about these revelations, saying that there are systems in place to make sure work shifts and assignments are completed, and that they don't track employee breaks. They appear unbothered, and believe an audit is not necessary. They also wouldn't let KTVU Fox 2 Investigates see inside the closet.

We can only speculate what Mr. Zhang does while he's in the storage closet. He very well may have been taking a break or repairing equipment, as his supervisors noted. But given the pictures of the filthy BART station, we do know what he's not doing.

¹ www.ktvu.com/news/2-investigates/234011066-story

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In real news: Swart wins — FTB won't appeal

On February 21, the time period for the FTB to appeal the Swart decision passed. According to the FTB, they did not seek further review of the decision. The FTB is working on providing information to taxpayers in light of the decision. That information is expected to be released soon.

In the meantime, we recommend you plan to file 2016 California tax returns for out-of-state LLCs and corporations that own an interest in a California LLC. After filing the 2016 return, you should file another protective claim for refund if the conditions of the Swart case apply.

In its ruling, the court rejected the FTB's expansive interpretation of "doing business" adopted in Legal Ruling 2014-01. The court found that Swart could not be "deemed" to be doing business in California on the sole basis that it was a member of an LLC doing business in California and that such an expansive interpretation "defies a commonsense understanding of what it means to be 'doing business.'"

We will alert you when further guidance is provided.

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A few fun facts about this week's writers:

Lynn Freer, EA, is a French literature major, so of course her favorite vacation destination is France. Here she is dining on mussels and fish stew near Nice.
Pets: Lady the Cocker Spaniel

Kathryn Zdan, EA, is not only director of the editorial department, she also "rocks the house" as a regular in curling bonspiels around the country. She also enjoys foreign and avant-garde film, baking, and the Investigation Discovery channel.
Pets: Mango the Jindo

Sandy Weiner, J.D., as California editor, loves all things California. Whether it's hiking at Big Sur or playing at the beach in San Diego where she lives, Sandy takes full advantage of all that California has to offer as a way to clear her head after trying to comprehend and explain California's Revenue & Taxation Code.
Pets: 2 dogs named Cookie and Rio

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Tax Season Tribune (2/5/17)