Brotman Law

What Is the IRS Appeals Process Like?

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So, the IRS appeals process is actually reasonably friendly to taxpayers and let me explain why. First of all the function of Appeals technically is to be an independent body of the IRS away from examinations and collections. The sole function of appeals is to resolve disputes between the taxpayers and the government and to do so in a mutually beneficial way. The most common time we run into appeals is usually with respect to when we’re filing a Tax Court petition and trying to work things out. Most of our audits that we do at the firm we will file a tax court petition for and then we’ll try and negotiate with appeals. The benefit of dealing with Appeals is most of the Appeals officers are either former collection agents or they’re formal auditors so they understand what you’re talking about. You’re dealing with professional people who know the same playing field as you and that are a representative that we can communicate with on a high level and get a lot done. Number two is with Appeals you’re dealing with a very high volume of cases, so Appeals is trying to screen cases out prior to litigation. Because it’s trying to resolve disputes, it has a lot more flexibility. They’re dealing with so many cases that if, for example, you’re taking an audit into appeals, appeals isn’t going to go through bank statements. They’re not going to go through receipts but appeals will take a look at the presentation of information and they will make an objective decision independently of the author.

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What Is the EDD Appeals Process Like?

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So if you can’t reach a resolution in a payroll tax audit you have essentially three options. The first option is to deal with the auditor and their manager. Oftentimes this can be problematic. Obviously this depends on the two people that are involved and people are people. Like any other organization, you get good people and you get bad people so depending on the relationship with the auditor that’s been developed during the course of the audit and depending on the relationship of the manager, it’s going to change the dynamic on how things are resolved at that level. Going to the manager is always an option. Generally speaking, the audit manager is going to back their auditor’s determination. It’s not like the manager is going to sit there and throw the auditor under the bus. The purpose of bringing in the manager is you get somebody more senior. You get somebody who usually is a former auditor but who has exposure to dealing with these issues and can often resolve tensions if they popped up in the audit process by being kind of a third party representative for the government to come in and resolve the situation. The managers don’t really like dealing with these issues. They would rather their auditor deal with these issues and not go to the manager but there is a possibility. Above the manager of the EDD level, you also have the head of the audit division.

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What Is the CDFTA Appeals Process Like?

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When you have a sales tax audit and you can’t agree on the audit, the very first step in the process is that you have an exit conference with the auditor and the manager, and if that doesn’t bear fruit, the auditor is going to submit the sales tax audit report. It’s going to go up through technical review. They have a review department review the audit report to make sure it’s technically correct and then it goes to a final billing. Once it goes to a final billing and I notice the determination is issued, that is your ticket to file your petition of redetermination to go into Appeals. So you file your petition and redetermination, the case moves from Sacramento, it goes back down to the district level and then the district level will try one more time to get it resolved before going through Appeals. What this usually means is as follows. Number one you get a chance to do a 10-day conference with the district principal auditor so CDTFA will schedule you to talk with the head of the audit unit for the particular district that you’re working in and the manager and the auditor will both be there and then you can kind of negotiate. If there’s an opportunity to get the case settled with the person who is making the final decision on the issue (for the district number two, this is just your principal auditor) and you don’t agree for whatever reason and the case can’t be resolved in the district, then you go through the formal CDTFA appeals process. The way it usually works out is you’ll get a hearing officer at CDTFA, you’ll go in for an appeals conference which is much like a mediation, so you’ll sit there, the auditor sits there, the manager sits there and the Appeals officer sits there. Usually the appeals officer is either an attorney or their former auditor, and then there’s a discussion between the parties on what the issues are and how to resolve. So what usually happens is there’s a conference and then there’s a follow-up document submission for the petitioner, usually the taxpayer, to prove their point and so on and so forth. What ends up happening after that is an exchange of information back and forth between you and the auditor and the manager of “here’s our documents that prove our point,” “here’s our counter response” and you kind of go back and forth. Eventually you read through to the point where you can’t submit any more documents, you can’t make any more arguments and the parties just kind of wear themselves out and at that point

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What Is the CDFTA Settlement Process Like?

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What Is the CDFTA Settlement Process Like? So CDTFA settlement process when dealing with the sales tax audit it used to be a very good Avenue to resolve cases unfortunately nowadays it’s been late a little bit more difficult and here’s why so the problem is is if you go through settlement you can’t resolve things and then you go through Appeals cases will naturally progress to something called the office of tax appeals which is California’s version of a Tax Court and recently cbt fa has been so good at disposing of taxpayer cases and Tax Court but the issued guidance to their own settlement division which basically states don’t settle cases let them go forward to Appeals now it will still give some measure of reduction through the settlement division usually about 10% sometimes as much as fifteen but settlement is no longer as reliable as an option as it once was so unless you have new documents or new evidence and we’ve actually had some pretty good victories in settlement in light of the changes but it’s very difficult to get things pushed through and get your tax payer in a position where they’re gonna be happy so the important thing.

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What Are Common Problems in a Sales Tax Audit?

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So we’ve done a lot of sales tax audits on our firm and I can speak very generally about some of the problems that we see most often that our clients encounter or that we’ve encountered through the course of dealings. So problem number one is the majority of people who are under reporting on sales tax for whatever reason or another don’t do enough to cover their bases. While that seems fairly silly, it’s really true. The biggest way that people get nailed for sales tax audits is by data that doesn’t match. So what happens is when you file a sales tax return that gets reported to CDTFA and then in the evaluation process to determine whether they’re going to audit you, CDTFA is looking not only at your taxable sales and your total sales due looking at your federal income tax returns, but they’re looking at the information that was reported on your 1099 Ks and any other publicly available information that they could find. So the biggest problem that people have right off the bat is sales tax returns and federal income tax returns not matching. You’re reporting a lower or higher amount of sales than you are on your federal

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