Personal income taxes: return filing extension.
The primary implications of AB1171 focus on the challenges faced by partnerships in meeting the accelerated filing deadlines imposed by previous legislative changes. The bill is designed to provide a relief measure, especially for the 2016 taxable year, presuming reasonable cause in instances where partnerships fail to file by the standard due date. This intent is to minimize penalties associated with non-compliance during a transitional period that has been notably complex for tax filers.
Assembly Bill 1171, introduced by Assembly Members Obernolte and Ridley-Thomas, aims to amend the California Revenue and Taxation Code concerning personal income tax return filing extensions. The bill modifies the existing law by allowing the Franchise Tax Board (FTB) to grant extensions for filing returns, increasing the maximum allowable extension period from six to seven months for those partnerships who file returns. This adjustment is significant for ensuring that partnerships can comply with tax filing requirements without incurring penalties for late submissions, particularly in the context of complex partnership returns.
Discussions surrounding AB1171 reflect a general sentiment of support towards providing tax relief and easing compliance burdens on partnerships. Legislative supporters argue that the bill addresses the legitimate challenges historical due dates pose. However, there may be some contention from parties who believe further scrutiny is necessary to avoid abuse of extended filing privileges, thus presenting a balance between ensuring compliance while still providing necessary support to taxpayers.
Notable points of contention in the debates surrounding AB1171 include concerns over the potential for excessive leniency being granted to partnerships, possibly leading to reduced tax compliance. Critics may argue that while the intention to provide extensions is commendable, it is essential to maintain robust accountability measures. The bill includes provisions to preempt penalties for partnerships meeting specific criteria, which may lead to varying interpretations of what constitutes 'reasonable cause' among the FTB and filers alike.