How to File an Appeal With the California California Department of Tax and Fee Administration
The California California Department of Tax and Fee Administration has audited you and found potential underpayment of taxes, fees or additional amounts the CDTFA determines you owe.
Your next step is to meet with the CDTFA supervisor and then the District Principal Auditor. If you do not convince them that the results are in error, you can file an appeal.
Step One: Petition for Redetermination
You receive a Notice of Determination, which is a notification that the CDTFA has determined you owe more taxes than you paid. If you want to file a Petition for Redetermination, the first step of the appeals process, you must wait until this notice is issued. You have 30 days from the mailing date.
If you file a petition before the Notice of Determination is issued or beyond 30 days after it is mailed, your petition will not be considered valid. The liability will be considered final, due, and payable.
The Filing Must:
- Be in writing
- Identify the amounts you wish to contest: all or part
- State specific grounds or reasons why you believe you do not owe taxes or fees
- Be signed by you or your authorized representative
- Be mailed to the correct address
If you wish you can include requests for:
- An appeals conference by the Appeals Division
- A hearing before the Members of the CDTFA (an appeals conference must be held first)
- Your case to be considered under the CDTFA’s Administrative Settlement Program, which is confidential and will not impact your appeal rights
What Happens Next?
The California Department of Tax and Fee Administration reviews your position. At this time, it may ask for additional records or documentation to support your position. You may amend the petition with additional grounds for disputing the original determination as long as it is before the date the CDTFA makes its final decision.
Once the California Department of Tax and Fee Administration notifies you of its conclusions, most petitions are resolved at this point. However, you may still wish to appeal if the CDTFA staff denies your petition in whole or in part. You must confirm, in writing, your previous request for an Appeals Conference or a Department hearing.
If you have not already requested an appeals conference or have missed the deadline for responding to the Department’s conclusions, a Notice of Redetermination will be issued to you with the staff’s conclusion.
Step Two: The Appeals Conference
If you are continuing with the appeals process, you will receive a Verification of Appeals Conference Form, which must be completed and returned within 15 days.
The Appeals Conference is typically held in the CDTFA field office that prepared your audit unless you request otherwise. Once you are there, you may record the conference at your own expense, either electronically or by a court reporter, but you must provide a copy to the Appeals Division at no cost if it requests one. The CDTFA does not record these proceedings.
Your conference will be with an Appeals Division attorney or auditor who has had no prior involvement in your case. You will receive a Notice of Appeals Conference from the Case Management Section with the date, time and location. You must return the Response to Notice of Conference Form within 15 days to confirm your attendance.
You may waive attendance if you wish, and submit written arguments and documentary evidence in support of your appeal before or during the conference. If you want to do so after the conference, you will need the permission of the Appeals Division.
After the conference, the Appeals Division mails you a Decision and Recommendation based on all relevant arguments and evidence. The document contains an analysis, conclusion and recommendation for the resolution of your case. A letter will be included explaining the status of your appeal and any options you may have for further action.
If you agree with the Decision and Recommendation, the appeal ends, and the CDTFA will issue a Notice of Redetermination or Statement of Account based on the decision and recommendation from the Appeals Division.
If, however, you do not agree, you may be granted a hearing if you request one in writing within 30 days of the Appeals Division’s letter.
Step Three: CDTFA Hearing
The CDTFA hearing is your opportunity to present oral arguments regarding the unresolved issues of fact or law remaining in your appeal. You can represent yourself, but unless you are accustomed to these types of proceedings, you may wish to retain an attorney, accountant or other experienced professional to represent you.
The CDTFA meets monthly in either Sacramento or Los Angeles, and you will receive a hearing notification from the CTFA Proceedings Division with the correct location. At least 75 days before the hearing date:
- Notice of CDTFA Hearing
- Response to Notice of CDTFA Hearing Form
- Copy of the CDTFA’s regulations governing hearings
- Other pertinent information
You must submit the Response to Notice of CDTFA Hearing Form within 15 days of the Notice date. If you need a postponement, the Notice of CDTFA Hearing specifies a date by which to make that request.
You must provide sufficient justification for a postponement before the deadline to receive one. If you miss the deadline or require further postponements, they will only be granted if you can prove extreme hardship.
You may file an opening brief with the Chief of CDTFA Proceedings no later than 55 days before the hearing date. It should contain:
- A statement of the facts and issues
- A discussion of applicable legal authorities
The other party may file a brief no later than 35 days before the hearing. While the CDTDA may request or require the filing of a post-hearing brief, a post-hearing submission is only permitted by the CDTFA.
The Appeals Division prepares a CDTFA Hearing Summary with the remaining unresolved issues, and you should receive a copy 30 days before your hearing.
The hearing is brief and concise. All proceedings are recorded by a certified court reporter, and you can request a copy from the Chief of CDTFA Proceedings.
You are typically the first party asked to present oral arguments, witnesses and documents; you are limited to 10 minutes. The other party has 10 minutes to respond, and you have an additional five minutes for rebuttal.
The CDTFA either makes an immediate decision and issues a Notice of Redetermination or the matter may be taken under submission of decision at a later CDTFA meeting.
You are sent the Notice of Redetermination once the CDTFA makes the decision on your appeal within 45 days of the decision date. It will indicate whether you owe taxes, fees, penalties, or interest and will become final 30 days after it is issued unless you file a petition for a rehearing.
Even if you petition for a rehearing, you must pay what you owe, otherwise, an extra 10 percent penalty will be charged for nonpayment.
As you can see, this can be a long, drawn-out process. An experienced attorney can help you through it by handling the paperwork and the calendaring, so you do not have to worry about missing a date or lacking appropriate documentation.