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Your Legal Corner - Client Alert Blog

2009 Los Angeles City Tax Amnesty Program

Written By: Melissa C. Marsh, Esq., California Attorney, June 2009 Add to Favorites
The City of Los Angeles has instituted a tax penalty amnesty program effective May 1. 2009 through July 31, 2009. Under this program, taxpayers can avoid paying accrued penalties which can be as high as 40% for failing to report, or for underreporting, their business taxes. Businesses that have failed to comply will still have to pay the base tax, interest, and applicable fees owed, but will receive an automatic waiver of the usual penalty (which can be as high as 40%).

To qualify for the program, the taxpayer (individual or business entity) must:

  1. File the proper Application; and
  2. File completed tax statements, or returns, for all periods and taxes for which the taxpayer has not previously filed a tax statement or return and/or file completed amended tax statements or returns for all periods for which the taxpayer underreported the taxes due; and
  3. Pay in full all principal, interest, and any applicable fees (excluding penalty fees) due.
To take advantage of the tax amnesty program, please visit a Los Angeles City of Finance office, or call the L.A. Tax Amnesty Hotline at 213.978.1555 Monday through Friday from 8 a.m. to 5 p.m.

If you received a letter from a collection agency seeking to collect your past due L.A. City taxes, the Los Angeles Office of Finance recommends you pay the bill in full (all principal, interest and collection fees) and simultaneously complete, sign, and mail the The Tax Amnesty Penalty Waiver Application (for accounts in collection). It must be postmarked by July 31, 2009 for the penalty waiver to be valid.

For more information, read LA City’s Office of Finance Answers to Frequently Asked Questions (.PDF) or call the Tax Penalty Amnesty Hotline at 213.978.1555.

Individuals and businesses located in Los Angeles should know that if you receive a 1099-Misc. – any compensation other than a W-2 for work – you are required to report that income to the IRS on a Schedule C. The IRS will notify the State of California and the State of California will notify the city in which you are located that you filed a Schedule C. This is important because the city in which you are located will then send you a notification that you are delinquent on your local city business taxes. Yes…there is a city business tax. The good news is that if you are involved in the entertainment industry (e.g. performer, director, producer, etc..) you qualify for an exemption from L.A. City Business Tax up to the first $300,000 of your gross income if you file your business license and annual tax registration in a timely manner. If you are not involved in the entertainment industry you may still qualify for the Small Business Tax Exemption on your gross income up to $100,000, but again to qualify for the exemption you must file your business license and annual tax registration in a timely manner.

For more information on the City of Los Angeles' Business Tax, visit the City of Los Angeles Office of Finance.

If you would ike further assistance, please do not hesitate to contact me at my office at mmphone, or via our Contact Form.

IRS CIRCULAR 230 DISCLOSURE: To ensure compliance with requirements imposed by the Internal Revenue Service, we inform you that, to the extent this communication (or any attachment) concerns any tax matter, it was not written to be (and may not be) relied upon to (1) avoid tax-related penalties that may be imposed by the IRS, or any other agency; and it is not to be used to (2) promote, market or recommend to another party any transaction or matter addressed herein (or in any such attachment).

Tags: la business tax, la city business tax, tax
Posted In: Business Law Bulletin  Corporate Client Bulletin  Employment Law News 

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Disclaimer: The information presented on this web site was prepared by Melissa C. Marsh for general informational purposes only and does not constitute legal advice. The information provided in my articles and alerts should not be relied upon, or used as a substitute for professional legal advice from an attorney you retain to advise or represent you. Your use of this Internet site does not create an attorney- client relationship. Transmission of this article is not intended to create, and receipt of it does not constitute, an attorney-client relationship. All uses of the contents of this site, other than personal uses, are prohibited. You may print or email a copy of any information posted on this web site for your own personal, non-commercial, use, but you may not publish any of the articles or posts on this web site without the Express Written Permission of Melissa C. Marsh.

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Located in Los Angeles, California, the Law Office of Melissa C. Marsh handles business law and corporation law matters as a lawyer for clients throughout Los Angeles including Burbank, Sherman Oaks, Studio City, Valley Village, North Hollywood, Woodland Hills, Hollywood, West LA as well as Riverside County, San Fernando, Ventura County, and Santa Clarita. Attorney Melissa C. Marsh has considerable experience handling business matters both nationally and internationally. We routinely assist our clients with incorporation, forming a California corporation, forming a California llc, partnership, annual minutes, shareholder meetings, director meetings, getting a taxpayer ID number (EIN), buying a business, selling a business, commercial lease review, employee disputes, independent contractors, construction, and personal matters such as preparing a will, living trust, power of attorney, health care directive, and more.