FTB Withholding Mismatch Notices

Posted on August 3, 2016 · Posted in Industry News, Latest Updates

7/6/16 – The FTB has provided updated information regarding the increased number of withholding adjustments this year. Every filing season, the FTB processes more than 15 million taxpayer returns and relies upon a variety of information sources to verify refund amounts before they are issued. When an error or discrepancy is identified, the FTB issues a notice to explain that the refund or tax liability was adjusted above or below the expected amount.

The FTB made several enhancements this year to rely more heavily on real-time information, and as a result, a larger-than-usual number of adjustments occurred due to problems related to wage withholdings. The procedural changes were installed to not only catch reporting errors, but also to prevent tax fraud and refund theft schemes. These changes, combined with late and sometimes inaccurate reports from employers, caused some taxpayers to receive a reduced refund or an increase to their tax liability. This generated an enormous wave of calls to FTB’s customer service center from taxpayers and tax professionals with questions.

The FTB took immediate action to review the situation, and promptly issued apology letters to approximately 30,000 taxpayers whose returns should not have been adjusted, letting them know that any refunds would be mailed within 7 to 10 days. Call center staff levels were also increased to provide immediate assistance to taxpayers with questions and concerns.

The FTB is currently reviewing the procedures used in the 2015 filing season to identify improvements which can reduce the number of adjustments in future years and provide quick feedback and resolution to taxpayers who need assistance.

Click here to read the article by FTB Taxpayers’ Rights Advocate Susan Maples, CPA in the July 2016 TaxNews.