Monday, October 20, 2008

California's Gestapo

"California's Franchise Tax Board was after [Thomas] Kaschak for $138,000 in income taxes he allegedly owed between 2000 and 2004. ... If he was expecting accountants and tax lawyers, he says he got instead 20 FTB agents who raided the house, rousted him out of bed and refused to let him contact his attorney during a two-hour interrogation. ... Mad as hell, Kaschak, now 49, filed a federal civil rights suit in Fresno in June. More satisfying: in August a different taxpayer won a tort suit against the [FTB]. ... The jury decision is likely to give pause to tax collectors--from California especially--who make a habit of going after wealthy ex-residents who set up house in another state. ... They can almost make the [IRS], which is boxed in by taxpayer rights laws, seem like a softie. ... In 1995, following intense efforts by Nevada's delegation, Congress passed a law prohibiting state income taxation of nonresidents' pension income, including that from a 401(k). ... Still, Kaschak's attorney, James Rowe says that when it comes to playing bad cop, California's FTB is in a precinct all its own. "They've almost become, in some respects, a gestapo of sorts,' he says", Asher Hawkins at Forbes, 29 September 2008.

I agree, having lived in California and been exposed to the FTB. The IRS is a bunch of pussycats next to this mob. The FTB will take, in my experience, absurd positions to try to collect taxes. It particularly harasses retiree ex-residents, apparently figuring it can terrify them into paying taxes it is not due. On some occasions I have told clients to close their California bank accounts and sell their California property so the FTB will lose track of them when leaving the state.

1 comment:

Junior said...

I am a bit worried about even commenting on this, lest FTB swoop in and snatch up my shack in the city - oh wait, I rent! NM!

Seriously... how do they get away with this?

But I can't bash them too much. We work with them. -conflict-

So I'll keep my comments for private discussion only...