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CDTFA Audits

A corporate tax meeting.When it comes to sales taxes in California, the California Department of Tax and Fee Administration (CDTFA), formerly known as the State Board of Equalization (SBOE), focuses on sales tax audits. The CDTFA generally reviews retailers who sell items at a retail price. The tax calculation is based on the gross receipts obtained from the retail sales.

The CDTFA is known for its distinctive audits. The CDTFA carries out its audit by employing a variety of tests and techniques, and the test is influenced by the type of business being audited. The initial test carried out by the CDTFA is an in-depth comparison of the sales recorded in the taxpayer’s records and the sales reported on the taxpayer’s sales tax return.

In addition, the CDTFA can perform a mark-up test, cash vs. credit test, use tax test, alcohol pour test, Amazon sales test, hot vs. cold, in-store and to-go test, etc. Each industry has its own set of standard tests. The CDTFA audits are very aggressive and clients are presented with a very detailed Excel summary that can be very difficult to understand. Reach out to an Orange County CDTFA audit lawyer to help you navigate a sales tax audit and advise you on your options if you obtain a large sales tax bill.

CDTFA Appeals

When a taxpayer wants to appeal their audit, the Office of Tax Appeals (OTA) now handles it as opposed to The Board, which formerly handled it.

The Notice of Determination is issued after the Sales Tax Audit is completed. In this situation, it is necessary to contact an Orange County CDTFA audit attorney for guidance in filing a petition as there is a 30-day deadline to appeal.

There are similarities between a sales tax and a payroll tax assessment. A sales tax liability can also be carried out against a responsible individual. The CDTFA is always on alert when it discovers the inability of a corporate taxpayer to pay off the sales tax it owes. In this situation, a “dual determination” will be issued and the CDTFA can enforce an assessment of unpaid sales tax against the individuals of the organization who are in charge of filing and/or payment of the sales tax. The individuals can be the officers and shareholders of the corporate taxpayer. Although the issuance of this “dual determination” is not dependent on the position of the official in the company, the dual determination can also apply to other corporate officials, employees, and owners. Knowing all this makes it more important to challenge an audit by the CDTFA if errors were noticed in its assessment. Contact an Orange County CDTFA appeals attorney to review your audit to help you avoid this personal liability.

CDTFA Collections

Avoidance of tax liens, levies, and garnishments should be of the utmost importance to you. The aggressiveness of tax collection used by these agencies makes it necessary for you to reach out to an experienced and well-educated Orange County CDTFA collections attorney who will help you out with these issues.

If you miss your filing deadline after the Notice of Determination is issued, you will be transferred to Collections and the full liability must be paid.

CDTFA Settlements and OICs

The only benefit to a CDTFA audit is the CDTFA Settlement program. The agency carefully reviews the audit and allows the taxpayer an option for settlement. You can settle your case with the agency’s settlement division once the petition has been filed. A lot of cases arising from sales tax have been amicably resolved at the CDTFA settlement division.  Other options for resolving a California Sales Tax Audit involves an informal hearing by a CDTFA hearing officer.

Let our experienced Orange County, San Francisco, and San Diego CDTFA audit attorney help you plan for success for your business. Allison Soares practices the following legal areas:

EDD audits, appeals, and collections
IRS tax matters and audits
CDTFA audits
FTB audits
Business law (business advisory services)
Business formation
Corporate law
and other business tax matters in California

Speak with a proven Orange County, San Francisco, and San Diego CDTFA audit lawyer today. Call us directly or contact us online. We look forward to helping you take your business to the next level.


"Allison was a pleasure to work with. Smart, professional and responsive to my calls and concerns, and often took extra time to educate me about my situation and options. Most importantly though, I was happy with the results and Allison was able to get me an arrangement that I found both fair and affordable."
- Jeffrey S

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