12/20/2022
The Franchise Tax Board is sending out letters suggesting that some individuals review their tax returns for 2019 because their expenses may be too high. They are using a "national standard" to determine these suggestions and as long as any expenses provided on your bookkeeping can be substantiated and fall within the regulations, there will be no issues.
This is not an audit, only a suggestion, though they may wish to perform an audit on the return. The statute of limitations applies in this instance to three years after either:
1. The due date of the timely filed return (April 15th)
2. The new due date of an extended return (October 15th)
3. The filing date of a return that was not properly extended.
The statute of limitations does not apply if the change to expenses is 25% or greater underreporting of income or fraud.
If you receive one of these letters, please drop it off or email it to the office and we will review your return to verify any discrepancies or potential issues. If not, we look forward to seeing you in 2023!
Andy
Nelson Miller & White CPAs
