What Does the CDTFA Sales Tax Audit Process Look Like?

What is DTF a Sales Tax Auditors Look for in a Sales Tax Audit? CDTFA auditors are looking for mistakes they're looking at your data they're looking at how that data relates to each other they're looking at the returns that were filed and they're looking for any errors that exist the most common errors are discrepancies between primary source data and the sales tax returns that were filed so. for example the sales on your federal income tax returns don't match the sales that were filed on the sales tax returns.

The auditor will find that error and figure out a way to calculate what the true percentage of sales were or at least true from the auditors perspective. The auditor is then going to look at different things they're going to look at purchases to make sure that the appropriate amounts of tax were charged and paid they're going to look for exemption certificates with any resales that were made they're going to look to make sure that shipping charges were appropriately taxed and they're going to go through and look at various different issues that are related specific to your industry CDTFA is didn't audit you by accident you got selected for audit, because they're looking for something they believe that the effort that they put into the audit is going to yield some air in the amount of tax that you paid so they ought the auditors job to go through your data and try and find mistakes the way you mitigate. The auditor going through and looking for a fishing expedition is to present something that's very tight very concise and to control the scope of information to that you give to the auditor the more tightly controlled the data you're providing to the auditor. The more that you're going to be able to limit mistakes in your presentation and the less likely that the auditor is going to make adjustments during the course of your sales tax on you.


Sam Brotman, JD, LLM, MBA

Owner and Director of Legal
Brotman Law