SALES TAX MATTERS
The CDTFA is the state taxing agency that handles sales tax audits and sales tax collection efforts. A sales tax attorney can guide you through a tax audit or collection matter.
Sales Tax Audits
The CDTFA is very active in conducting audits and has a variety of methods to conduct audits and assess taxes to businesses. One method that the CDTFA often uses is the mark up test. The CDTFA auditor will obtain the cost of goods sold and then attempt to formulate an average mark up of those goods. Moreover, the auditor will obtain the current mark up by inspecting the sales price of goods at the current rate. Then the CDTFA auditor will apply that mark up rate to the cost of goods sold reported on the businesses tax return for the last several years.
In addition, the CDTFA has a variety of other mathematical methods to propose an increased tax assessment. The CDTFA can also attempt to personally assess the business owners with the tax liability of a business. If the CDTFA does attempt this personal assessment, you have appeal rights. Accordingly, if you or your business has a tax liability, you don’t have to pay the entire amount in one lump sum. You can pay the tax liability in monthly payments based on your ability to pay. A sales tax attorney can negotiate an affordable payment plan for you.
In a sales and use tax audit, for example, the auditor wants to determine the following about the returns you have filed:
- Did you report all gross receipts from sales of tangible personal property and taxable labor and services?
- Did you report the cost of all business equipment and supplies that you purchased without tax either from out-of-state vendors or for resale that would be subject to use tax?
- Did you properly claim deductions?
- Did you properly allocate local tax?
- Did you use the correct rate of tax when reporting sales in special tax districts?
- Did you properly apply tax to your sales and uses of tangible personal property?
We can help you navigate these questions to obtain the best results. For a helpful reference, you can review the sales tax audit procedures manual.
Sales Tax Liability Collection Matters
If you receive a notice of tax liability from the CDTFA, they can attempt to issue levies against your bank account, issue liens, and issue wage garnishment orders. However, if you cannot pay the entire amount in one lump sum, you are entitled to request a monthly payment plan. We can help you obtain an affordable payment plan that works for you. We are skilled in a plethora of tax collection matters, including successor liability, installment agreements, and lien and levy defense. If the CDTFA has issued a levy against you, we can help you get it released. Whatever you matter may be, we can fight on your behalf. You can review the sales tax collection procedures manual.
Contact a Tax Attorney Today
We have extensive experience in sales tax audits and collection matters. Contact a sales tax attorney at Disparte Tax Law today for a free consultation.