California Sales, Use,
and Excise Tax (CDTFA)
It is easy for a business to err with regard to sales tax compliance. Regrettably, when that happens, the repercussions are possibly the harshest of any tax. Let the attorneys at Brotman Law investigate the specifics of your case and develop a tax action plan that will protect your business.
SALES TAX AUDITS & COMPLIANCE
When you get a letter of a pending audit, our attorneys can protect your rights throughout the investigation process. We also help ensure you observe all sales tax laws, thus avoiding audits and penalties in the future.
ASSESSMENT APPEALS
If you want to dispute the state auditor’s findings, we can challenge and protest the assessment on your behalf.
SALES TAX LITIGATION
If you want to file a lawsuit against the State taxing agency, our attorneys can litigate your case and help attain the best possible settlement even without a final court verdict.
Overview
Navigating the California Department of Tax and Fee Administration (CDTFA) can prove to be frustrating, costly, and disruptive to your business, particularly when tackling a sales tax audit independently. Regrettably, the CDTFA auditor is tasked with seeking additional tax revenue for the state, employing various strategies to maximize the collection of funds from your business.
Sometimes, they even rely on statistical sampling and other methods to determine your amount of liability. Yes, California auditors can assess you a liability based on nothing more than guesswork.
The fundamental problem in a California sales tax audit is that the sales of a business over the standard three-year audit period are often too many transactions for one person to reasonably verify.
But worry not, with an experienced sales tax audit attorney on your side, you can safeguard your business and your rightfully earned assets.
Sales Tax Audit Risks
What Else Should I Know?
California sales tax audits are not random. Auditors go after certain types of businesses and industries that are viewed as low hanging fruit and isolate issues specific to those industries.
California sales tax audits are not random. Auditors go after certain types of businesses and industries that are viewed as low hanging fruit and isolate issues specific to those industries.
There is no straightforward answer to this question. But, several factors can raise your risk of a CDTFA sales tax audit.
- Failure to report sales tax
- Your vendor or supplier getting audited
- Constant late filing of taxes
- Presence of past tax issues
- Claiming hefty exemptions in your taxes
- Noncompliance is prevalent in your industry (for instance, the liquor stores and cannabis industry may underreport cash transactions, hence triggering an audit).
Very few attorneys practice sales and use tax law because it is incredibly complex and they lack the requisite background in statistics. You have come to the right place for smart and strategic solutions. Let our legal team dig into the particulars of your situation and work to build a tax action plan that will protect your business.
Very few attorneys practice sales and use tax law because it is incredibly complex and they lack the requisite background in statistics. You have come to the right place for smart and strategic solutions. Let our legal team dig into the particulars of your situation and work to build a tax action plan that will protect your business.
When the audit concludes that your business has not been paying the required sales taxes, you might be subject to significant penalties and interests, as outlined by state policy. You may even face criminal charges.
As you can see, the stakes are very high, and you cannot afford to fail a CDTFA audit. You need a tax team that understands the ins and outs of how sales tax audits work in order to maximize your success and minimize your risk during the process. Our experienced attorneys at Brotman Law will work with you to advise you through the sales tax audit process, interact professionally with the auditors, and negotiate a favorable outcome on your behalf.
KNOWLEDGE OF SALES TAX LAW
Our attorneys have a thorough understanding of sales tax law and CDTFA procedures. They understand the many nuances of the law and are able to decipher complex sales tax information with a clear eye.
A DILIGENT ADVOCATE
Our attorneys are always and without exception on your side. They will negotiate for you in board appearances and meetings, help towards a settlement, and represent you in court, if needed.
CONFIDENTIALITY
Unlike discussions with your accountant, everything you discuss with us is protected by attorney/client privilege. Thus, you can be frank in our meetings, allowing us to advise you better.
Our Clients Will Tell You: We Get Results.
Tax Strategies, Case Studies, and Thought Leadership
CDTFA
What Triggers a Sales Tax Audit in California?
A sales tax audit occurs when the CDTFA suspects a business’s reported sales have been understated. Most commonly, this occurs in situations where there is a “mismatch” or an incongruency between the sales tax returns filed with CDTFA and what was reported to other agencies (like the IRS).
Read MoreGuide
Sales Tax Requirements for Retailers Outside of California
An out-of-state retailer “engaged in business in this state” (California) is required to register, collect use tax on taxable sales made to consumers in California, and remit this tax to the California Department of Tax and Fee Administration.
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Hundreds of $1,000,000s
Saved in Tax Penalties
100+
Appeal Victories
$1B+
Saved in Taxes
150+
Multimillion and billion-dollar corporate transactions
11+
Tax Services
400+
Clients represented in an audit
$160M+
in ERC Tax Credits
Our Thought Leadership Has Appeared In
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Book a Free 15-Minute Assessment Call
Set up a quick call with our firm’s concierge to see if we’ll be able to help you. The whole process will take 15 minutes or less.
STILL HAVE QUESTIONS?
Tax law can be complex, confusing, frustrating, and even scary. We’re here to help!
Typically, it might take 1-6 months to conduct. However, the duration also depends on several factors, including the size of the business, activity in the local jurisdiction, audit schedules, the complexity of issues and data involved, etc.