The California Supreme Court has scheduled oral arguments in the case of Dicon Fiberoptics v. Franchise Tax Board (“FTB”) for March 6, 2012.   The case will address the issue of burden of proof for employees that are issued a voucher under the California Enterprise Zone program.

The Court of Appeal previously ruled that vouchers are prima facie evidence a worker is a “qualified employee” and thereby qualifies the employer to claim the tax credit.  The court concluded that the Franchise Tax Board may audit vouchers, but that the burden of proving a worker did not meet the criteria of a “qualified employee” would be with the state.   Additionally the Court of Appeal ruled that an employer’s inability to provide documentation requested by the Franchise Tax Board during an audit does not result in the FTB satisfying its burden of proof.  The FTB appealed to the California Supreme Court asking for the court to hold that the burden remains with the taxpayer to demonstrate eligibility and that the voucher does not support that burden.