If the CDTFA auditor finds that you or your business owe taxes, penalties, and/or interest, they will prepare a Report of Field Audit or a Report of Investigation. If you agree with their conclusion, that report will be sent to the Sacramento Headquarters for collection action, to which you will receive a Notice of Determination (aka a tax bill). However, what should you do if you disagree with the CDTFA auditor’s finding?
Explain Why You Disagree With the Auditor
If you express to the Auditor why you disagree with the CDTFA audit results, the auditor may defer the preparation of their final report and afford you reasonable time to provide additional information and documentation to support your position.
Once you have supplied your documentation and reasoning for your position, the auditor may take the following actions:
Discussion with the Audit Supervisor
You may receive communication from the Audit supervisor to schedule a meeting during which you can explain your position and present supporting documentation. Following the meeting, the supervisor will determine whether to adjust the audit and prepare the Report of Field Audit or Report of Investigation. If that report indicates that you disagree with the findings, you may be given the opportunity to meet with a CDTFA representative to discuss your position.
Discussion with a CDTFA Representative
Following the Supervisor’s report which notes that you disagree with the audit results, you may receive a letter that gives you 10 days to make an appointment with the CDTFA representative identified in the letter. (Don’t miss that deadline). This discussion with the CDTFA representative will be similar to the one with the Audit Supervisor in that it’s a second chance to explain your position and present supporting evidence.
You can secure legal representation at any stage in this process. Whether the CDTFA is auditing you for sales taxes, use tax, or other California taxes, a tax attorney can express your legal position to the CDTFA auditor. Moreover, a CDTFA tax defense attorney can ensure that you do not miss appeal deadlines that can be fatal to your tax resolution case.