If you receive a CDTFA Notice of Determination indicating that you owe additional taxes or fees, take careful note of the issue date. Through the CDTFA appeals process, you can submit a settlement and appeal.
CDTFA Appeals Process
If a CDTFA audit finds that you have underpaid taxes or fees, the CDTFA will send you a billing called a Notice of Determination. The notice will state the amount of tax or fee and penalty due, plus the amount of interest that has accrued on the tax or fee due. However, if you do not agree with the amounts shown, you may appeal by filing a petition for redetermination. On the other hand, you may pay the amount due and file a claim for refund.
A taxpayer may challenge an assessment for a tax or fee by submitting an appeal within the time limits proscribed by law. You do not lose this right even if you initially agreed that the tax or fee is due, as long as you timely file your appeal. If you pay a tax or fee without appealing the assessment, you may still dispute the tax or fee by filing a claim for refund within the time limits set forth by law.
You typically have 30 days from the date of the notice of determination to file an appeal. Furthermore, you file can request an appeal by filing a petition for redetermination. If you do not pay the proposed tax liability or file an appeal by the 30-day deadline, you will be assessed a penalty equal to ten percent of the unpaid taxes or fees due. There are several steps involved in the appeals process. In some cases, an appeal can be referred back to a prior step. Thus, you may go through some of the steps in the appeals process more than once.
Sales Tax Settlement
After you file your petition for redetermination, your case can go to the settlement division. In the settlement division, the settlement officer typically will review your arguments for why and how the auditor made mistakes at arriving the proposed tax assessment. Consequently, the settlement officer will review your arguments and any documentation you have provided. After reviewing the matter, the CDTFA settlement officer will propose a percentage reduction to the proposed liability. If you accepted this proposal, you generally must pay a 25% down payment toward the tax assessment and then pay the remaining amount within two years.
Sales Tax Appeals
If you ask to skip the settlement process or fail to reach an agreement with the settlement division, you appeal will be referred back to the appeals division. Eventually an appeals officer will review your case, including your arguments and any documents provided to substantiate your position. An appeals officer has a wider degree of authority to settle issues and can even remove entire portions or all of the assessment. If you fail to reach an agreement with the appeals officer, your case will be transferred back to settlement. Furthermore, a taxpayer can appeal the decision of a successor liability or a dual determination, personal liability assessment.
Contact a Sales Tax Attorney
If you have received a notice from the CDTFA, contact a sales tax attorney at Disparte Tax Law for a free consultation. After the CDTFA audit and notice of determination, which could include CDTFA penalties, taxpayers may use the CDTFA appeals process to submit a settlement or conduct an appeal hearing. Our attorneys also represent taxpayers in EDD appeals.