BILL ANALYSIS
AB 2177
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 2177 (Beall)
As Amended May 26, 2010
Majority vote
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|ASSEMBLY: |74-0 |(May 6, 2010) |SENATE: |34-0 |(July 1, 2010) |
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Original Committee Reference: REV. & TAX.
SUMMARY : Authorizes the Franchise Tax Board (FTB) to implement
an alternative communication method that, at the request of a
taxpayer, would allow FTB to communicate with the taxpayer
electronically.
The Senate amendments make a technical, nonsubstantive change to
the legislative findings and declarations in this bill.
AS PASSED BY THE ASSEMBLY , this bill:
1)Authorized FTB, by regulation, to develop an alternative
communication method with taxpayers that would do all of the
following:
a) Allow FTB, at the request of a taxpayer, to provide an
electronic notification (e.g., an e-mail) to the
taxpayer stating that a notice, statement, bill, or other
communication, which is required or authorized under
Revenue and Taxation Code (R&TC) Part 10 (commencing with
Section 17001), Part 10.2 (commencing with Section 18401),
or Part 11 (commencing with Section 23001), has been posted
to, or updated on, the taxpayer's online account;
b) Allow taxpayers to file electronically a protest,
notification, and other communication to the FTB in a
secure manner, using the FTB's Web site; and,
c) Specify that a taxpayer must designate a preferred
electronic communication method if the taxpayer wishes to
communicate with the FTB electronically.
2)Provided that sending electronic notification to a taxpayer
pursuant to his/her request does not constitute a violation of
R&TC Sections 19542 and 19542.1.
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3)Prohibited the usage of the alternative communication method
for any notice, statement, bill, protest, or other
communication between the FTB and a taxpayer prior to January
1, 2013, or prior to the successful implementation of the
Taxpayer Folder as a component of the FTB's Enterprise Data to
Revenue (EDR) project, whichever was later.
4)Stated that any notice, statement, bill, protest, or other
communication between FTB and a taxpayer pursuant to the
alternative communication method shall be treated as if it
were mailed by United States (U.S.) mail, postage prepaid.
5)Takes effect on January 1, 2011.
FISCAL EFFECT : According to FTB, this bill will not impact
state income revenue.
COMMENTS : Author's statement: The author states that, "AB
2177 would allow the FTB, at a taxpayer's request, to send a
message to the taxpayer (or their authorized representative)
that a bill, notice, or statement can be retrieved by the
taxpayer through the secure FTB website in lieu of mailing the
notice by U.S. postal mail.
"Using secure authentication procedures, taxpayers would have
the option of accessing electronic communications through FTB's
website. The notice would be considered received by the
taxpayer when the communication is transmitted in the manner as
previously designated. No confidential information would be
transmitted electronically within the communication.
"The bill would allow the FTB to reduce postage costs, go
"green" by cutting down on paper mail, and improve efficiencies
in tax administration workloads, all while providing the same
level of services. The option for electronic notification also
ensures that taxpayers who move frequently will be given a
timely receipt of FTB notices.
"Should AB 2177 pass this legislative session, the operative
date for the provisions would begin on January 1, 2013."
The purpose of this bill: According to FTB, the sponsor of this
bill, existing state law prohibits FTB from providing electronic
correspondence to taxpayers who, otherwise, would prefer to
AB 2177
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communicate with FTB electronically. This bill resolves this
problem by authorizing FTB to offer taxpayers the option of
communicating electronically and to send an electronic
notification to taxpayers when information has been posted to,
or updated on, their secure online accounts. The notification
would provide information guiding the taxpayer to log into the
secure folder on the FTB Internet Web site. This bill would
also allow a taxpayer to file a protest, notification, or other
communication with FTB in an electronically secure manner. This
bill would reduce FTB's postage, paper, and processing time,
would permit taxpayers to address any tax issue quickly and
conveniently, and would, therefore, improve efficiency in tax
administration.
According to the FTB, it issues approximately 17 million bills
and notices each year to taxpayers that include notices in
response to returns filed, collection notices for unpaid
liabilities, filing enforcement notices when returns are not
filed, and notices related to audit activities of taxpayer
returns. Some notices are merely correspondence regarding a
pending matter, but many have legal significance. Under
existing law, FTB is not able to mail these notices
electronically, even if the taxpayers receiving the notices
would have preferred electronic communication. In addition, a
Notice of Proposed Assessment and final deficiency notice issued
after January 1, 2008, require a postmark, and thus, cannot be
mailed electronically.
The EDR Project: Currently, a taxpayer or his/her
representative may obtain from the FTB the taxpayer's limited
confidential information by accessing "MY FTB ACCOUNT" on the
FTB's Web site. The taxpayer must use his/her social security
number and the customer service number to log into the account,
which contains certain information about the taxpayer, including
the taxpayer's estimated tax payments, extension payments,
recent payments, a summary of the last 10 tax years, California
wage and withholding information, and FTB-issued 1099-G and
1099-INT information.
According to the FTB's analysis of this bill, under the EDR
project, the FTB plans "to reconfigure its existing computer
systems to implement service-oriented architecture and improve
the efficiency of existing processes." The "Taxpayer Folder" is
one of the components of the EDR project; it will contain all of
the relevant information regarding a particular taxpayer.
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Specifically, it will contain the account data, address data,
and account history data for each taxpayer and will include an
historical record of every notice or bill issued to the
taxpayer. The "Taxpayer Folder," which will be accessible
online by all taxpayers and their authorized representatives, is
expected to be completed by January 1, 2013. The EDR project is
scheduled to be fully implemented by December 31, 2016.
Is Electronic Mail Secure? It is well known that one's most
private message can be read by others as it travels through the
Internet. It appears that the "Taxpayer Folder" would allow
taxpayers, who would like to communicate with the FTB
electronically, to file a protest, notification, or submit other
information to the FTB in a secure manner. It is unlikely,
however, that taxpayers would have access to a secure channel
that would allow them to receive confidential information
safely. This bill provides, therefore, that electronic
notification sent to the taxpayer will contain no confidential
information and will only inform the taxpayer that a notice,
statement, bill, or other communication is available for viewing
in his/her online secure account on the FTB's Web site.
Analysis Prepared by : Oksana Jaffe / REV. & TAX. / (916)
319-2098
FN: 0005190