Governor Signs Two Bills involving Domestic Corporations, LLCs and Partnerships
Governor signs two important tax bills (09-24-18)
Governor Brown has signed AB 2503, which makes a domestic corporation and a limited liability company subject to voluntary or involuntary administrative dissolution or administrative cancellation if:
- The entity either never did business or filed returns/paid tax when it was operating and has no remaining business assets; or
- The entity’s powers are, and have been, suspended by the FTB for a specified period of time.
This means that a taxpayer doesn’t need to wait for years for the FTB to try to come after them, and the shareholders/members won’t have to go through the Ralite process.
To view the full text of AB 2503, go to:
Governor Brown also signed SB 274, which generally conforms to the new federal centralized partnership audit regime. The new regime allows the IRS to conduct audits, make adjustments and assessments, and collect tax at the partnership level (rather than at the partner level), and generally applies to returns filed for partnership taxable years beginning after 2017.
Under SB 274, partnerships must report each partnership item change or correction to the FTB within six months of the date of each final federal determination if the partnership is issued an adjustment under IRC §6225 or makes a push-out election as part of an IRS partnership level audit.
To view the full text of SB 274, go to:
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