So now I'd like to talk to you about some issues with regarding that the states have specifically. In California, we have a number of challenges in dealing with the state taxis that are either less of an issue or non-existent at federal level. The first as I've kind of touched down earlier is overside. There is usually less overside on cases than there is at the federal level. And I mean by that, is the auditor or the collection agent is given a lot more latitude in most cases to handle the cases as they see fit as long as it falls within the administrative guidelines. This particularly has an impact on the examinations process so a lot of the times the auditors are kind of given free rein to define the scope of what the audit is in sales tax or in particular they can do a really detail investigation and go through a number steps that you may not find in the federal process. As a result of this and as a result of the states having fewer resources, there is often times administrative delay when dealing with the state cases. For example, the time frame in California right now is if I were to represent a client in a sales tax audit and me and the auditor just agreed on the result and I filed and appeal, it would take anywhere from 8 to 12 months under the current structure to hear that appeal.
Those types of delays are common at the federal level although they do exist but they are fairly common at the state level and the reason for that is because the state only has a limited number of people at that higher level who could handle those types of cases. So, it is a lot easier for those people to get flooded with a backload of work than it is the federal employees who are nationwide and when there's a backload in one office they can just transfer to another facility. In addition, as I mentioned earlier, there's less case law. There's a high cost of litigation associated with mitigating tax cases in state court. There are few judges in the state court system that understand tax issues and or who want to deal with them and there is a usually a significant backlog in the state court system versus the federal court system. Any litigators out there or anybody who has ever gone through the several court processes knows that it can be challenging to get through it in a reasonable amount of time. As I mentioned earlier, that there's a higher priority on revenue enforcement and revenue collection at the state level. So, a lot of the times you will see enforcement priorities dictated in California by Sacramento or dictated in those states by their local legislators and those enforcement priorities will kind of pick up more the flavor of the month. For example, in California we've seen a recent uptick in the state going after businesses who are out of state but do business in California. As a result, there's been kind of uptick in case of tax payers who may be located outside of the state and who are not paying their fair share of California taxes for business they may be conducting in the state.
That's a really good example of an enforcement priority because an enforcement priority is to find a case issued to the franchise tax porter which is our state income tax port here and the Board of Equalization, which is our sales tax port, and then those agencies will direct enforcement priorities to their auditors and collectors to go after those types of individuals and businesses. For example, in California, one of the things that they did is that they setup field offices in different states. There's field offices for the Board of Equalization in Texas, in New York and in Illinois. California uses those field offices as jumping of points for doing regional collection activity. The practice is not uncommon with states, New York state and a few other states are considering similar measures or have put them already into place. As a result of all of these things, there is a greater level of difficulty with dealing with state tax issues. A lot of times we're really thankful to be dealing with the IRS when encountering state collection agents and state examination agents and the reason for that is the IRS is a more well-defined system and has a better process for dealing with things. At the state level, because of administrative delay, because of the kind of autonomy of collection agents and examination agents sometimes you get a lot more challenge in matters and the matters are often times dictated in large part by the person that you're working with. So, the relationship between you and the state examination or collection representative is really, really important. Like most occupations, many of the people in the state are actually good people and who do their job accordingly. There are some jerks out there but for the most part your relationship with the person that you're dealing with is really, really important.
One of the biggest tips I would give to anybody watching this, is that you need to approach these relationships from a collaborative standpoint rather than a confrontational standpoint. If you approach it from a confrontational standpoint because of the discretion that the collection agents are given or the examination agents, you're going to encounter a lot of difficulty in navigating through your state matter. The old expression, "You win more flied with honey than with vinegar" is completely applicable here. So, you want to make sure that dealing with the state level, you keep a really good eye out for nurturing those relationships and working with those people. In particular, if you do this area of law or if you practice in state collections frequently, you'll often run into the same people over and over again because in a lot of cases there's a lot of homogeny between the different units of the state collection agencies. So, for example, with the complex account or recovery unit here in California and the Offer in Compromise unit here in California, you get a lot more interaction with them. If you have a good working relationship with collection agent or with the offer specialist, a lot of times they will help communicate within the units and can help move things along quicker. So, these relationships are really, really critically important to having a successful outcome in whatever matter that you're dealing with.