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CROS: Is your business struggling with the new tax filing system?

"That's a distinction without a difference." You likely have heard that phrase before. What it aims to point out is a fault in someone's logic. Typically, it is evoked when a speaker tries to propose that two things are different when no difference actually exists.

Such a rebuttal does not appear appropriate applied to California's new tax management system. In development since 2010 and finally launched in May, the system is touted by officials as one that simplifies business sales tax reporting, increasing revenue. What they appear to have not anticipated was that it is so different from what came before that filers areĀ stymied by it

Taxpayers need not endure late-filing penalties

"Nothing. No Training. No education." That's the complaint one experienced tax attorney expressed recently about the Centralized Revenue Opportunity System (CROS). Another observer says the complex system confuses even professionals. The task of filing a return used to take 30 minutes. Now it takes 90. The old system performed calculations automatically. CROS does not, requiring manual entry of information.

What many see as the first real test of the system came July 31. That's the date by which businesses across the state were to have submitted second quarter sales tax filings. Considering the apparent glitches and clear complaints, it is expected that many found it impossible to complete the process on time, increasing the risk of incurring late filing penalties.

At the time of this writing, there are no reports about how things went. But ahead of the date, government officials said they are ready to waive any penalties if someone complains. That's prompted objections from critics who question why the onus should be on taxpayers to file complaint paperwork to absolve penalties resulting from bureaucratic failure.

While at least one top tax official says she's "incredibly happy" with CROS performance, it's clear that many do not share that view. And if you are a business operator already struggling, the last thing you need is the frustration of dealing with unwarranted tax penalties.

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Law Offices of Robert T. Leonard, APC

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