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FTB requests tax returns on real estate withholding cases

Tuesday, May 13, 2008

FTB requests tax returns on real estate withholding cases

The FTB has completed mailing more than 9,000 Request for Tax Return notices to nonfilers who have real estate withholding credits for the 2004 and 2005 taxable years.

Real estate sellers must file a California tax return to claim the real estate withholding credit. Failure to file the tax return and report the sale within three months and 15 days (two months and 15 days for corporations) after the close of the taxable year may result in penalties. If you have clients who receive a Request for Tax Return, they must either:

File the returns; or
Prove to the FTB that they do not have a filing requirement.

The FTB will issue a Notice of Proposed Assessment to nonfilers who do not respond to Request for Tax Return within 45 days.

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