California OTA Partially Modifies Taxpayer’s Appeal Against FTB, Reduces Tax Liabilities

The California Office of Tax Appeals (OTA) has issued a decision partially modifying and reducing the additional proposed tax from the Franchise Tax Board (FTB). The taxpayer, a Florida S corporation, whose President and sole shareholder resided in California, had filed its 2020 federal tax return using a California address, but failed to file a California tax return, prompting the FTB to issue a demand for tax returns and a proposed assessment. On appeal, the OTA determined that despite being incorporated in Florida, the taxpayer was “doing business” in California during 2020, because its President performed managerial functions in the ...