BOE uses short tests to come up with a decision as to whether to proceed or to accept as correct that item being tested. In fact, BOE encourages its auditors to use short tests when taxpayer’s records are in order. Any time short test can be expanded into full examination.
Brotman Law
Board of Equalization Audits – Accounting Techniques
An audit made on a taxable measure basis generally places emphasis on the verification or accumulation of taxable differences as compared to an audit performed on a total sales and claimed deduction basis using individual lead schedules. Auditor will verify that all sources of revenue and deductions have been examined.
California Sales Tax Audit Procedures and Techniques
The purpose of a California sales tax audit is to correctly measure the tax. The Board of Equalization (BOE) auditor conducts preliminary probing and testing in order to see if there is a potential area of misplaced tax. Sometimes preliminary testing reveals that California sales tax audit of business is not warranted. When deciding whether to waive or perform an audit, the auditors consider the following points:
Multistate Tax Commission Multijurisdiction Resale Certificates
Multistate Tax Commission Multijurisdiction Resale Certificates
Board of Equalization Audit
Use of Form BOE-504 – Proving That a Sale Was Not a Resale
In a Board of Equalization audit, taxpayers should keep in mind that any of the evidence other than actual resale certificate, by itself is not the equivalent of a resale certificate timely taken in good faith, and may not relieve the seller of the liability for the tax.
CDTFA Audit of Sales for Resale
A Claimed Sale for Resale is Allowed if Supported by Valid Resale Certificate
A claimed sale for resale will be allowed in a CDTFA audit if it is supported by a resale certificate that is proper in form and is timely taken in good faith from a person who is engaged in the business of selling tangible personal property and who holds a California seller’s permit. If the purchaser is not required to hold a permit because the purchaser sells only property of a kind the retail sale of which is not taxable, e.g., food products for human consumption, or because the purchaser makes no sales in California, an appropriate notation to that effect will be entered in lieu of a seller’s permit number on the resale certificate under Regulation 1667 governing exemption certificate requirements. A certificate will be considered timely if it is taken at any time before the seller bills the purchaser for the property, or any time within the seller’s normal billing and payment cycle, or any time at or prior to delivery of the property to the purchaser. CDTFA auditors can be stringent when enforcing the resale certificate requirement.
California Sales Tax Audits
One of the most common targets in a California sales tax audit is sales for resale. Sales for resale is the most common deduction claimed by California taxpayers and one of the most common targets of the Board of Equalization (BOE).
Board of Equalization sales tax auditors are especially careful in examining accounting methods used by taxpayer and use various procedures to verify amounts. Often, California taxpayers will estimate this deduction and will get tripped up in a sales tax audit when the Board of Equalization auditor uses their verification procedures.
Franchise Tax Board Settlements – Part Two
A taxpayer who wants to settle must submit a written request, which must include the following information:
Franchise Tax Board Settlements – Part One
Franchise Tax Board Settlements
California Employment Development Tax Settlements
California EDD offers taxpayers tax settlement program, where EDD and taxpayer can settle a claim for less than the amount owed. EDD can settle if it evaluates costs and risks associated with the litigation of the case and determines that it is better and less expensive for EDD to settle for lower amount than to litigate in court. The Settlements Program allows an employer the opportunity to enter into a settlement agreement to also avoid the cost of prolonged litigation associated with resolving a disputed employment tax matter.