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Cancellation of debt review by audit.

The FTB has found during its audit contacts

some recurring errors that most likely would have prevented the selection of the return for review. These were:

* Inaccurate Form 1099-C or 1099-A. More than 50 percent of the taxpayers had received an inaccurate Form 1099-C.

* Not Making Proper Election. Several taxpayers did not attach federal Form 982, Reduction of Tax Attributes Due to Discharge of indebtedness. Other taxpayers disclosed COD exclusions on various other statements within the return rather than completing federal Form 982.

* Insolvency. Taxpayers claiming insolvency did not include Form 982.

* No Disclosures. Taxpayers did not report COD income, gain or loss from foreclosed property on the return. Learn more at www.calcpa.org/DebtReview.

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Title Annotation:FTBNEWS
Publication:California CPA
Date:Nov 1, 2011
Words:116
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