California FTB allows oral hearings for FTB-initiated proposed variances from standard apportionment
Multistate Tax alert | June 5, 2018
This Multistate Tax Alert briefly discusses FTB Notice 2018-02, as well as the related administrative process.
On May 24, 2018, the California FTB issued FTB Notice 2018-02, permitting a taxpayer or its representative to request an oral hearing before FTB staff in connection with an FTB staff-initiated proposed variance from the standard apportionment formula under California Revenue and Taxation Code (CRTC) Section 25137.
CRTC Section 25137 allows a taxpayer to petition for, or the FTB to require, use of an alternative apportionment formula where an application of the standard apportionment formula does not fairly represent the extent of the taxpayer’s business activities in California. On October 19, 2017, the FTB issued Notice 2017-05, which permitted a taxpayer or its representative to request an oral hearing when the taxpayer or its representative initiates a CRTC Section 25137 petition. FTB Notice 2018-02 supplements Notice 2017-05, such that a taxpayer or its representative may request an oral hearing before FTB staff regardless of which party initiates a variance from the standard apportionment formula under CRTC Section 25137.
To make an oral hearing before FTB staff, FTB Notice 2018-02 provides that the taxpayer or its representative should notify FTB staff as early as possible in the proceedings. Once notified, the assigned FTB staff will contact the taxpayer or its representative to arrange for a date and time for the requested oral hearing. The FTB recommends that, prior to the oral hearing, the taxpayer or its representative provide to the FTB staff its position in writing and fully explain all pertinent facts as well as supporting legal authorities and analysis.
If you have any questions regarding the FTB Notice 2018-02 or other California tax matters, please contact any of the following Deloitte Tax professionals:
Valerie C. Dickerson, partner, Deloitte Tax LLP, Washington, DC, +1 202 220 2693
Christopher Campbell, principal, Deloitte Tax LLP, Los Angeles, CA, +1 213 553 3072
Steve West, managing director, Deloitte Tax LLP, Los Angeles, CA, +1 213 688 5339
Shirley J. Wei, senior manager, Deloitte Tax LLP, Los Angeles, CA, +1 213 553 1715
Brian Toman, Tax specialist leader, Deloitte Tax LLP, San Francisco, +1 415 783 6137
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