What If I Owe Money at the End of a CDTFA Sales Tax Audit?

If you owe money at the end of the CDTFA sales tax audit process, you have a decision to make. Can you pay the liability in full, do you want to pay the liability in full, do you want to go into collections or is it better to file petition and pay the liability over time? This is a strategic decision that we make depending on the taxpayer's facts, circumstances and how much they owe. However if you don't appeal the liability, you will proceed into CDTFA collections and then collections will start to negotiate with you. In our experience for taxpayers that don't have immediate flexibility to pay

the liability or who can't pay the liability within the course of a year, we recommend to file a petition and proceed through the appeals process. During the appeals process if a timely petition is filed it's a good way to delay collections and/or go in a settlement. Oftentimes we can negotiate a de facto two or three year payment plan just by working the case through the appeals process and settlement and resolving the case. That way the taxpayer is not in danger of any levies any liens or any adverse collection action from the CDTFA. It's recommended that clients avoid collections whenever possible and navigate themselves on the best playing field they can for resolving their liabilities.


Sam Brotman, JD, LLM, MBA

Owner and Director of Legal
Brotman Law