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Franchise Tax Board warns IRS staffing cuts could erode California revenue
Summary
At an Assembly Budget Subcommittee hearing, the Franchise Tax Board described how reductions in IRS enforcement and federal delays could reduce state tax collections, and urged legislative follow-up on data and partnerships to protect California revenue.
At a hearing of the California State Assembly Budget Subcommittee on Accountability and Transparency, the Franchise Tax Board described how reductions in Internal Revenue Service staffing and related federal delays could dent state tax collections and complicate return processing.
Roger Lackey, representing the Franchise Tax Board, told the panel the state’s tax filing system depends heavily on federal forms, information reporting and timely IRS data. "95% of taxpayers actually file electronically," Lackey said, describing how state returns depend on software schemas and federal information reporting that the Franchise Tax Board and the IRS share. He noted most California returns are prepared through tax software and by professionals, and that delays or changes at the federal level cascade into state processing.
The s…
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