video-blog Archives - Page 22 of 24

What Is a Managed Audit? Is it a Good Idea?

April 23, 2026July 13, 2020 by Brotman Law

Key Takeaways

Topic: What Is a Managed Audit? Is it a Good Idea?
A managed Audit is when you sit down with the auditor and agree to basically perform a self audit.
A managed audit formulates a plan that’s kind of a contract.

A managed Audit is when you sit down with the auditor and agree to basically perform a self audit. A managed audit formulates a plan that’s kind of a contract. A managed audit can be a good idea in certain situations because what you’re doing is essentially filling out the auditor’s work papers for them. You submit the work papers to the auditor along with some documentation for them to verify and if everything turns out okay, then the auditor will bless the audit. In doing a managed audit you have the potential to cut your interest rate in half. That can be pretty good savings depending on how much your liability is. However the savings in terms of the interest can be outweighed by the length of time and the resources it takes to complete the audit. Managed audits take a lot of work and if a client lacks the internal resources to do the audit for the auditor, it can be a huge waste of time, cost and energy. The management decisions should only be made with a tax representative in terms of discussing the strategy for the audit. Agreeing to a managed audit is a significant burden and can be a huge amount of work. That decision shouldn’t be made lightly but if you do the managed audit properly and you fill it out and turn it in and it reduces the amount of time that the auditor takes to look at the audit, you can set yourself up for success in certain situations.

What Are the Types of Penalties That I Could Face in a CDTFA Sales Tax Audit?

April 23, 2026July 13, 2020 by Brotman Law

Key Takeaways

Topic: What Are the Types of Penalties That I Could Face in a CDTFA Sales Tax Audit?
Sales tax audits have different types of penalties.
Some penalties are more severe and some penalties are less severe.

Sales tax audits have different types of penalties. Some penalties are more severe and some penalties are less severe. Generally penalties will range anywhere from 10 to 50 percent but the biggest kicker with sales tax penalties is that sales tax penalties can stack on top of one another. So let’s say for example that the client didn’t turn over all the sales tax that they collected and they failed to file a return. Well this client could be looking at a 40% penalty for the failure to turn over sales tax and a 10% penalty for each return that wasn’t filed. As you can see this can stack up pretty quickly and it leads to a lot of problems in the context of the audit. Usually CDTFA will reduce the penalties down to a manageable level. So for example, if you have 12 quarters of sales tax returns that you didn’t turn in, they’re not going to hit you with a hundred and twenty percent penalty but at the same point, sales tax penalties are pretty severe and the CDTFA often leans towards the stronger end of the penalties at least at the district level. One of the biggest areas for negotiation when we handle a sales tax audit is what the ultimate penalty structure is going to be for the client and we push on behalf of our clients for zero or very low penalties. This is contrary to a lot of the behavior that you see in a sales tax audit but if you play your cards right you can mitigate penalties or avoid them entirely during the course of the offer.

What Happens After the Audit? What Happens If I Disagree With the Result?

April 23, 2026July 13, 2020 by Brotman Law

Key Takeaways

Topic: What Happens After the Audit? What Happens If I Disagree With the Result?
There are a couple possible outcomes.
Number one is that the auditor’s report is sufficient and that you agree with it.

There are a couple possible outcomes. Number one is that the auditor’s report is sufficient and that you agree with it. If you agree with it, there will be a short exit conference between you, the auditor and the manager so the auditor can explain what they did in the report. If you don’t agree with the audit then this conference happens anyway but at least that will give you the opportunity to express your disagreements in front of the manager and have the auditor potentially make changes. Now the problem with this is is the auditor at this point has usually already run the audit report by the manager and anticipated any disagreements that you might have with it so the manager is less likely to stand up for you than you would think but there are opportunities there to present any additional documentation or any other fact-finding before the close of the audit. If you’re not successful with resolving things with the manager, then the auditor will issue you a bill. They will turn in the audit and a bill will be generated about two to three months later and then when you receive that bill, you can file a petition for redetermination. Upon filing your petition for redetermination, you will proceed to a 10-day conference. We will have the opportunity to speak with the head of the audit unit for that particular.

What Does the CDTFA Appeals Process Look Like?

April 23, 2026July 13, 2020 by Brotman Law

After you get a bill from the Auditor based on a disagreement, you file a petition for redetermination. Unfortunately CDTFA is often backed up with Appeals so petitions for redetermination can take a while to go through the system before you actually get to an appeals conference. Prior to the Appeals conference you have the option of going to CDTFA settlement. CDTFA settlement is a group of settlement officers that are designed to resolve cases before they reach CDTFA appeals. If there’s an opportunity for settlement it’s suggested that you go to see CDTFA settlement to try and resolve the case. CDTFA settlement process is much less time-consuming, much less expensive and particularly if you’re not looking for them to resolve

Key Takeaways

After you get a bill from the Auditor based on a disagreement, you file a petition for redetermination.
the case entirely, meaning wipe your liability up to zero, it can be a good opportunity to get some small gains and settlement or concessions.

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

April 23, 2026July 13, 2020 by Brotman Law

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

Key Takeaways

If you owe money at the end of the CDTFA sales tax audit process, you have a decision to make.
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.

What Is Brotman Law’s Strategy in a Sales Tax Audit?

April 23, 2026July 13, 2020 by Brotman Law

Sales tax audits are notoriously tricky they consume a lot of resources both in time and energy, and money so the goal with us and with our clients is to get out of the process as quickly as possible for the least amount of damage. When we look at a CDTFA audit, we’re looking at the cost-benefit of the situation. What’s the cost to the client, what’s the benefit of a certain action and how best can we get out of the audit with minimizing our expenditure and being as efficient as possible with our resources? One of the best ways that we do this is prior to creating the audit plan will try and pre-audit.

Key Takeaways

Sales tax audits are notoriously tricky they consume a lot of resources both in time and energy, and money so the goal with us and with our clients is to get out of the process as quickly as possible for the least amount of damage.
Pre-auditing the client is very important because it gives us a roadmap for how the sales tax audit’s going to go and what the areas of risk are for the client.

Why Should I Hire Brotman Law to Defend Me in My Sales Tax Audit?

April 23, 2026July 13, 2020 by Brotman Law

Key Takeaways

Topic: Why Should I Hire Brotman Law to Defend Me in My Sales Tax Audit?
We’ve dealt with some very difficult cases and gotten some really phenomenal results.
I credit that to the hard work and diligence of our team.

We’ve dealt with some very difficult cases and gotten some really phenomenal results. I credit that to the hard work and diligence of our team. Brotman Law really understands sales tax audits. We understand the tax law surrounding why sales are taxable and why they’re not taxable. We understand the tax procedure in terms of understanding the interactions with the auditor and their manager and the district principal auditor and then through the appeals process and up through the office of tax appeals and finally we understand statistical sampling which is a very rare quality in attorneys. Most attorneys don’t get a good knowledge of statistics. It’s not something that they teach you in law school but statistical sampling and being able to sustain a data fight in the context of a sales tax audit is a very admirable quality. We want to be on not only equal footing with the auditor, but we want to have the superior advantage during the entire audit because in our experience that’s the way you get results for the client. We use a very measured approach: we measure twice and we cut once. But our methods are strategic – they’re designed to make the problem and the process as less burdensome for our clients as possible and they’re designed to move them through the sales tax audit process quickly with as little exposure as possible. We are very good at what we do in the course of sales tax audits. We fight, we have a strategic tenacity and we do the best we can to leverage our efforts to get you the best result. I encourage you to sit down with us, give us the facts, let us look at your documents and let us start formulating a strategic plan.

How Are Individuals/Companies Selected for Audit? Why Am I Being Audited by the IRS?

April 23, 2026July 13, 2020 by Brotman Law

The IRS audits people for many different reasons but generally speaking when the IRS audits an individual or business it’s expecting to yield additional tax due to owing on a return.

Key Takeaways

The IRS audits people for many different reasons but generally speaking when the IRS audits an individual or business it’s expecting to yield additional tax due to owing on a return.
The IRS tends to measure the propensity for error that is likely to occur. If the IRS audits the return and the potential for unreported income that may be associated with the return, the short version is the IRS has limited resources.
the return it means that they’re looking to get something back.

What Do I Do If I Have an IRS Collection Agent (Revenue Officer) Come to My Home/Place of Business?

April 23, 2026July 11, 2020 by Brotman Law

So IRS revenue officers are field collection agents and they spend about fifty percent of the time in the field going after taxpayers and/or chasing their assets. So if a revenue officer shows up your home or place of business, understand you’re not obligated to talk to the revenue officer.

Key Takeaways

So IRS revenue officers are field collection agents and they spend about fifty percent of the time in the field going after taxpayers and/or chasing their assets.
The best thing you can do in that case is to get the revenue officer’s card and any paperwork that they have to hand to you, and then go see an attorney as soon as possible so that you can deal with the situation.
The IRS views you as a serious collection risk. That’s why they’ve signed and sent an individual field agent to come see you.

What Are the First Steps I Should Take in an IRS Audit?

April 23, 2026July 10, 2020 by Brotman Law

The first steps you should take in the audit are to gather your documents and to understand your risk. The first thing that we look at when we have a prospective client come into the firm is why we think the returner got audited. Every return tells a story and it’s only a matter of time before we go through the return and learn what that story is. In speaking with taxpayers what we often find is that people either lack

Key Takeaways

The first steps you should take in the audit are to gather your documents and to understand your risk. The first thing that we look at when we have a prospective client come into the firm is why we think the returner got audited.
the records to support their return or the story that their return tells doesn’t make a lot of sense or at least poses some additional questions that somebody would want to ask.