Form 588 and 590 Property Management 7% Withholding audits - Spidell

Form 588 and 590 Property Management 7% Withholding audits

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Message Board Form 588 and 590 Property Management 7% Withholding audits

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    • #314734
      Anonymous
      Participant

      Just curious who has seen these? I know a couple that just came out and the penalty is 100% of the amount that was to be withholding some pretty stiff penalties.

      Apparently the regs came out in 2014, anyone dealt with this?

    • #314753
      Lynn Freer
      Participant

      I wasn’t aware of FTB audits on these but the FTB has a nonresident withholding program in general. Yes, the penalty is fierce

      • #315043
        Anonymous

        Lynn Freer, they are also issing penalties for CA residents as well, the penalty is 100% of the 7% withhholding that was required I know of 2 current audits going on, notified by other preparers.

    • #315070
      Lynn Freer
      Participant

      There should be no penalty for failing to withhold if the owner is a CA resident with a CA address. I have asked the FTB for information about audits of property management companies and all they have told me is there is no penalty forgiveness even if the owner reported the income. I’ll post the reply when I get it. Can provide more information about the audit and what’s going on? If you want to send me redacted documents, send to my attention to lynn@spidell.com

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