- quote -

I happen to run a tiny non-profit with a part-time California
employee, and the CFB writes me about once a year to garnish his
pay for some ancient tax liability or other.

In my case, my wife moved from Japan to California and was a part year
resident, but the problem was that her tax accountant wrote down the
wrong date on the California return. They grabbed money for the time
between when the return said she arrived and when she actually did
arrive. Good luck untangling that 15 years later.

R's,
John

--
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rdadams[at]panix.com (Dick Adams) wrote:
- quote -

My guess is they're just as bad to residents.

Stu

--
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John Levine <johnl[at]iecc.com> wrote:

- quote -

That is a gross understatement. Attempts of the
Franchise Board to tax non-residents are legendary.

Dick

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

- quote -

Nope. It was 15 years ago, we don't even know where to find the guy
who made the mistake, and it wasn't all that much money.

R's,
John

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

On Apr 28, 5:19*pm, PeterL <po.n...[at]gmail.com> wrote:
- quote -

As others have noted, California does not conform to the IRC Sec. 911
exclusion, so I doubt that he would owe no California tax if he were a
resident. However, it appears that he will meet the CRTC Sec.
17014(d) safe harbor. Therefore, he is a nonresident of California
regardless of where his domicile may be. He has no filing requirement
since he is a nonresident and has no California source income.
(Income from intangibles, such as bank and brokerage accounts, has its
source at the residence of the owner, not the location of the payer.)

Filing a California return would start the running of the statute of
limitations and forestall correspondence from the FTB generated by the
1099s from the bank and brokerage accounts. Note that in order to do
that you must disclose ALL of his 2007 income, from all sources, and
that there is no Sec. 911 exclusion. However, since his California
source income (Schedule CA-540NR, Col. (e) is zero, his tax liability
is zero.

Katie in San Diego

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

On Apr 28, 8:55 pm, John Levine <jo...[at]iecc.com> wrote:

- quote -

So did you manage it to get it back eventually?

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

On Apr 28, 7:30 pm, "removeps-gro...[at]yahoo.com" <removeps-
gro...[at]yahoo.com> wrote:

- quote -

BTW, I forget to add the the foreign earned income exclusion is not
recognized by California. So if he took 85,700 or 10,000 or any
amount, there would be a California adjustment of 87,500 or 10,000,
etc -- ie. the California AGI would be larger than the federal.

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

- quote -

The California Franchise Board is very aggressive and has a long
memory. A few years back, I gave a talk in California from which they
withheld tax, so since I live in New York, I filed a return to get it
back. Instead of a check, I got a form letter telling me that they'd
taken it because my wife had underpaid her 1992 California taxes
(before we got married), in a year when she moved from Tokyo to Palo
Alto, due to a mistake by her tax preparer writing down the date that
she moved.

If he has a California license and gets mail at a California address,
they're going to presume that he is a California resident, and you
should have incontrovertible documentation that he is not. This
suggests that filing a California return would be a bad idea unless
you are sure that he'll never ever owe California tax.

Not related to taxes, if he really spends all his time somewhere else,
the somewhere else doubtless has a time limit for getting a local
license that he's probably long past.

R's,
John

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

On Apr 28, 5:19 pm, PeterL <po.n...[at]gmail.com> wrote:
- quote -

Is the reason he does not owe any CA taxes because of the foreign
earned income exclusion -- IRS form 2555 which reduces your foreign
earned income (mostly wages, self employment income, but not interest,
dividends, capital gains) by about 85k? If so, there might be a time
when his foreign salary grows to over 85k, and interest, dividends,
capital gains may become sizeable too in the future. If he files a CA
tax return for 2007 and owes nothing, no problem. But in the future
he might owe something. If he suddently stops filing a CA return when
that happens, that might give them FTB reason to wonder what is going
on. If he has not filed a CA return in 9 years, keep it that way.

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

On Apr 28, 3:54*pm, Katie <katiej_1...[at]yahoo.com> wrote:
- quote -

Because he comes home for vacation every so often and it's easier to
have a CA DL instead of Texas, where he maintains no residence.

He was in CA for a couple of months before moving away, but has not
worked while in CA. He is employed in the foreign country, and
expects to be there for the foreseeable future. He has no plan to
return to the US at this time.

- quote -

Yeah that's his situation.

- quote -

Since he dosen't owe any CA taxes (I checked by filling out his CA tax
return). So would it be simpler just filling out his CA return, so
there won't be any question if California comes calling because his
1099 from his bank acct and investment acct all list a CA address?


- quote -

========================================= MODERATOR'S COMMENT:
- please trim the post to which you are responding

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

On Apr 28, 11:17*am, PeterL <po.n...[at]gmail.com> wrote:
- quote -


Why did he obtain a California driver's license? How long was he in
California before he left for the foreign country? Why is he in the
foreign country? How long does he expect to be there? What are his
plans after he returns to the US?

If he did change his domicile (his primary home) from Texas to
California before he left the country, he would still be a nonresident
of California if he is absent on an employment-related contract for
an uninterrupted period of at least 18 months. Such an absence is
"uninterrupted" as long as he is not in California for more than 45
days of any taxable year. Calif. Rev. & Tax. Code Sec. 17014(d).

If his absence is not employment-related, or for some other reason he
does not meet the safe harbor, then the question is whether his
domicile changed from Texas to California before he left the country,
and if it did, whether his absence from California is temporary or
transitory. In order to change domicile, generally a person must meet
all of three requirements: (1) abandon the previous domicile (move
away from it); (2) move to and reside in a new location (i.e., light
somewhere); and (3) intend to remain in the new location permanently
or indefinitely. Whether the OP's son met all three of those tests
depends on all of the facts and circumstances. Moving his bank and
investment accounts to California and obtaining a California driver's
license could be interpreted to reflect an intention to return to live
in California after his foreign activites are over and indicate a
change of domicile. If he lives in California after he returns to the
U.S., questions may be asked, and depending on all of the facts and
circumstances, he could be considered a California resident during his
absence. However, even if he is domiciled in California, he is a
nonresident if his absence is not for a temporary or transitory
purpose. Also, unless he came to California from Texas with the
intention of making a permanent home here, his domicile probably
remains in Texas even if he left no physical ties there.

There is no simple yes or no answer; it depends on all of the facts
and circumstances. However, it is unlikely that the question will
ever arise unless he lives in California after he returns to the US.

Katie in San Diego

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

On Apr 28, 7:44*am, se...[at]panix.com (Seth) wrote:
- quote -


Well that's the deal. He moved back home to CA for just a little bit
after Texas, then he went overseas. He did not live or work in Texas
for all of 2007. He has never worked in CA. But all his mail and his
driver license is CA. He does not own a car nor real estate. His
only connection to CA now is his DL and the addresses of his US bank
acct. and investment acct.

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

In article <4761eae6-707a-414b-a8b4-8d58489bbaab[at]q1g2000prf.googlegroups.com> ,
PeterL <po.ning[at]gmail.com> wrote:

- quote -

Wouldn't that make him a Texas resident then?

- quote -

He was a Texas resident after he was a California resident, and he has
never resided in California since becoming a Texas resident, right?

Which state is his driver's license from?

Seth

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

On Apr 27, 5:22*pm, "removeps-gro...[at]yahoo.com" <removeps-
gro...[at]yahoo.com> wrote:
- quote -


Well, he lived in Texas for 3 yrs prior to moving overseas. Before
that he was again overseas. So we are only a convenient place for him
to send his mail, including his US bank acct., investment acct, and
driver's license. So he actually has not lived in Ca for the last 9
yrs.

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

On Apr 27, 2:20 pm, PeterL <po.n...[at]gmail.com> wrote:

- quote -


http://www.ftb.ca.gov/forms/misc/1031.pdf

Focus on page 2 to 3.

If he intends to return to California, then his stay abroad is
considered temporary absence and he is still considered to be a
California resident. There is a safe harbor rule whereby you can be
considered a non-resident if out of state for over 1.5 years on an
employment related contract (see page 2).

What are the answers to the questions in part D of page 2?

<QuoteFactors to consider:
• Amount of time you spend in California versus amount
of time you spend outside California;
• Location of your spouse and children;
• Location of your principal residence;
• Where your driver’s license was issued;
• Where your vehicles are registered;
• Where you maintain your professional licenses;
• Where you are registered to vote;
• Location of the banks where you maintain accounts;
• Location of your doctors, dentists, accountants, and
attorneys;
• Location of the church, temple or mosque, professional
associations, or social and country clubs of
which you are a member;
• Location of your real property and investments;
• Permanence of your work assignments in California;
and
• Location of your social ties.
</Quote
--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

Our son is a full year resident of a foreign country. He gets his
mail sent to our house in California, including his investment account
and bank account. Does he need to file a CA state tax return?

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >