Incorrect FTB and IRS notices being sent to taxpayers


FTB

The FTB has confirmed that due to a software company’s error, approximately 13,000 returns did not properly subtract federal NOL adjustments from taxpayers’ California AGI. This has generated a number of notices to taxpayers, and many practitioners have reported contacting the Tax Practitioner Hotline to resolve these issues. The FTB is working directly with the software provider to resolve the issue, and the FTB is manually correcting the returns of all impacted taxpayers. The correction and updated information will be displayed on the taxpayers’ MyFTB accounts by the end of June. There is no further action required on the part of taxpayers or practitioners.

IRS

We’ve heard from numerous tax professionals that their clients are receiving erroneous CP14 notices for nonpayment of balance due for 2021 tax returns even though the payments were debited from their clients’ bank accounts. We have reached out to the IRS and confirmed that this appears to be a systemwide issue. The IRS is still investigating which taxpayers were impacted and has yet to determine what actions it will take to correct these notices. We will keep you posted as we learn more.

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