Spidell's Tax Season Tribune

Do you speak “client”?

Mike Giangrande, J.D., LL.M.

Federal Tax Editor

Client-speak is a language unto itself, which means that no matter how long you’ve been in practice, you may not yet have achieved full fluency. Here’s a handy guide of common phrases clients use, and what they really mean:

I don’t have crypto currency = I do have cryptocurrency
I am very organized = I have a shoebox full of crap for you
I didn’t receive a 1099 = I received the income, but don’t want to tell you about it
What do I need here? = How many fake expenses do I need to come up with?
I want to refinance my home, but I’m not showing enough income = I have been lying to you about my level of income for years, and it only now benefits me to start reporting all of it
I paid all my estimates = I probably paid them all, but I’m too lazy to review my bank statements to be sure
I do my own bookkeeping, I have QuickBooks = I leave QuickBooks to do my thinking for me and none of it can be trusted

Pick a number, any number... but not that number

Sandy Weiner, J.D.

California Editor

If you thought this filing season had to be better than last season, think again. Last year’s IRS backlog is wreaking havoc on this year’s tax season, and unfortunately, new initiatives by the state of California (e.g., the passthrough entity elective tax), the IRS (think K-2/K-3s), the FTB (tax basis capital accounts), and the failure of software companies to keep up with any of this has now pushed most tax professionals over the edge.

But for many of us, the crowning glory was the FTB’s latest game that I call “pick a number.” And if you play the game long enough you will soon discover that the number you pick will likely be the wrong one.

Can an S corporation use its FEIN to make a Web Pay payment? If you answered yes, because that’s what you’ve done for years: Gong, you’re wrong! Now you must use the SOS seven-digit number. [Note: Remember that starting in 2022, the SOS is now issuing 12-digit numbers to newly formed corporations.]

Can a partnership use its FEIN to make a Web Pay payment? If you answered yes because you could have sworn that’s what the FTB said earlier this year: Gong, you’re wrong! While a partnership can use its FEIN to make an Electronic Funds Withdrawal, it must use either its SOS ID number (if they have one) or the FTB-issued ID number. For Web Pay the partnership must use its California SOS identification number (12 digits) or the FTB ID number (seven digits). Why can you use the FEIN for one payment system, but not the other? Good question, but the “Why” is not part of the game.

Practice Pointer

If your client no longer has the FTB-issued ID number, they can obtain it by emailing the FTB at: FTBPTSPNoticeInquiry@ftb.ca.gov. They must supply their FEIN to obtain the new number (don’t even get me started). And it will take two to three business days to get the number.

Note to self: Make sure your clients schedule to make the payment at least one week before the due date to work through all these quirks.

Leaf blowers and lawn mowers: ear SOREs

Kathryn Zdan, EA

Editorial Director

In October of 2021, Governor Newsom signed AB 1346 (Ch. 21-753) which will task the State Air Resources Board with adopting regulations that will prohibit engine exhaust and evaporative emissions from newly sold “small off-road engines,” or SOREs.¹ For anyone woken up early by a leaf blower on a weekend morning, the acronym is appropriate.

The noise pollution is only part of the reason for the bill; for as small as these tools are, they emit an enormous amount of pollution. According to a report by the California Air Resources Board: “Today, operating the best-selling commercial lawn mower for one hour emits as much smog-forming pollution as driving the best-selling 2017 passenger car, a Toyota Camry, about 300 miles — approximately the distance from Los Angeles to Las Vegas.”²

Certain cities already ban the use of leaf blowers, including Belvedere, Berkeley, Beverly Hills, Carmel, Claremont, Indian Wells, Los Altos, Los Gatos, Malibu, Mill Valley, Mountain View, Newport Beach, Oakland, Ojai, Palo Alto, Pasadena, Piedmont, Santa Barbara, Solana Beach, Sunnyvale, Tiburon, and West Hollywood.

But for the purposes of AB 1346, SOREs also include chain saws, weed trimmers, and golf carts. These lawn tools and toys will need to be zero-emission — either battery-operated or plug-in — by 2024. The state has set aside $30 million to help professional landscapers and gardeners make the transition from gas-powered equipment to zero-emission equipment.³

¹ www.yahoo.com/news/gas-powered-leaf-blowers-face-a-moment-of-reckoning-205028611.html² https://ww3.arb.ca.gov/msprog/offroad/sm_en_fs.pdf
³ www.latimes.com/california/story/2021-10-09/california-moves-toward-ban-on-gas-lawnmowers-and-leaf-blowers

A few fun facts about this week’s writers:

Sandy Weiner, J.D., as California editor, loves all things California. Whether it's hiking at Big Sur or playing at the beach in San Diego where she lives, Sandy takes full advantage of all that California has to offer as a way to clear her head after trying to comprehend and explain California's Revenue & Taxation Code.

Kathryn Zdan, EA, spends her non-Spidell hours on photography and watching horror films (and then sleeping with the light on). She also enjoys hiking, biking, and watching foreign films.

Mike Giangrande, J.D., LL.M., is an Orange County native, and you can find him around his backyard smoker, working in his garage, or sipping lemonade at either a baseball or soccer game for this three children.

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