How do I appeal and FTB Audit?
Upon completion of the FTB audit, the Franchise Tax Board will mail a Notice of Proposed Assessment (NPA) to you if you owe additional:
The Notice of Proposed Assessment is not a bill. This proposed assessment will become a bill if you take no action by the protest by date. If you agree with the proposed amount, pay the tax outlined in your NPA.
If you disagree with the audit findings, you can file a protest by the protest by date shown on the front of the NPA. You typically have 60 days to submit an FTB appeal protest letter.
How to File a Written FTB Appeal Protest Letter
You can file a written protest by mail or fax. The FTB appeal protest letter should include the following:
- A copy of your NPA
- Your name or business name, address and phone number
- Your identification number
- Amounts and tax years you wish to protest and any amounts you accept
- What you disagree with and why
- Any supporting documents
- Your signature, officer’s or authorized representative’s signature
- Business entities should include the name, title, and phone number of the contact person handling the protest
You have the right to have a representative at any time during a protest, such as an accountant or tax attorney. The FTB will send you a letter or notification stating they have received your protest. Thereafter, the Franchise Tax Board will review your protest and may ask you to provide additional facts pursuant to an information document request. Moreover, if requested, we will hold an oral hearing so you can: Present your position on the protest with supporting evidence and provide additional documentation to establish facts or support tax law.
What Happens During an FTB Appeal?
The protest process is informal. Moreover, it is the first step in the administrative and judicial review process where you can dispute proposed audit adjustments. It provides an opportunity for you to discuss your concerns with an FTB staff member assigned to resolve your protest, known as a hearing officer, and provide any additional documents or information to substantiate your position. The hearing officer reviews your position and information to ensure the changes made during the audit were correct and in compliance with the law.
What Happens After my Appeal?
After the FTB audit is over and the FTB auditor makes a decision regarding any potential adjustments, you will receive a Notice of Action (NOA) which will either affirm, revise, or withdraw the audit decision.
You may also receive one or more of the following notices:
- Reissued Notice of Proposed Overassessment
- Notice of Action on an Notice of Proposed Adjusted Carryover Amount
- Notice of Action on an Overassessment, Credit, or Refund
- A letter that indicates we have fully or partially denied your claim for refund
You can file an appeal with the Office of Tax Appeals. However, you must do this within 30 days of the date printed on your NOA. If you do not file an appeal within the prescribed time frame, the tax, penalties, and interest become due and payable. On the other hand, you may pay the balance due and file a claim for refund within the applicable statute of limitations. Typically, the deadline for filing a claim for refund is one year from the date of payment. If you appealed FTB’s denial of your claim for refund and do not agree with the OTA’s decision, you can file an action against the FTB in the California Superior Court within 90 days. Additionally, a Suit for Refund on a Residency case must be filed within 60 days.
How Can I Appeal an FTB Audit?
If you have received a notice of proposed assessment from the Franchise Tax Board, you may need to appeal the proposed adjustments. Tax attorneys frequently are asked about the appeals process. Contact a tax attorney to discuss how to appeal a decision by the FTB.