CALIFORNIA, USA —
AB 136
Summary: Prohibits people found guilty in the recent college admissions scandal from benefiting from scheme-related payments claimed as charitable contributions or business expense deductions by retroactively disallowing these deductions on their state income tax returns.
Current Law: The law on the books currently allows taxpayers to deduct charitable contributions of either money or property made to qualified charitable organizations under the existing Personal Income Tax Law. It also allows taxpayers to deduct ordinary and necessary trade or business expenses under the existing Personal Income Tax Law.
What's New: AB 136 aims to crack down on the defendants that are involved in the college admissions scandal. Taxpayers who were found guilty in specific criminal complaints that were filed in the U.S District Court for the District of Massachusetts will have their charitable contributions disallowed. Deductions of business expenses made by the specified taxpayers to the Edge College and Career Network, LLC will also be disallowed. The bill will also state the Legislature’s intent to alert the Franchise Tax Board to certain potentially unlawful deductions.
Why it's needed: AB 136 is needed because it protects the State and California taxpayers against the abuse of the tax law on charitable giving and business expenses. It also puts appropriate safeguards in place that encourages a culture of fairness and equity on college campuses across the state.
