Is it Possible to Settle With the Auditor?

Unfortunately playing let's make a deal with the Auditor is not really possible. It's not possible to just throw out a number, let's say $25,000, to make the auditor go away. However in the context of any sales tax audit, there's a certain amount of horse trading that happens in order to get to a result from the CDTFA's perspective. CDTFA would rather close the audit as agreed than have an audit going into appeals. The more cases they close out at the audit level,

the less likely they have to do any work and the less resources that they have to allocate. Those resources at CDTFA are precious. Now CDTFA isn't going to lie down for you in an audit but especially towards the close of the audit, if you can make a representation to the auditor that if they reduce X, Y and Z, the auditor may be more than likely to cut you a break in exchange for getting an agreed-upon audit. That's a key factor to have and it's a card that you should play only at an appropriate time. Again they're not just going to give you a flat discount, but if there's an issue that could go either way, the auditor may be more likely to bend to you in order to resolve the audit and bring it to a conclusion. Understanding where these issues are and how to present them strategically is a little bit of a term of art but by doing that you can significantly cut your liability and give the best result for yourself as possible.


Sam Brotman, JD, LLM, MBA

Owner and Director of Legal
Brotman Law