CDTFA Responsible Person Liability: The Dual Determination Letter and How Owners Fight It

A dual determination from the California Department of Tax and Fee Administration (CDTFA) is a Notice of Determination that assesses a closed business’s unpaid sales tax against you personally under section 6829 of the Revenue and Taxation Code, and it gives you 30 days from the date it was mailed to file a petition for redetermination. The business has stopped operating, and the letter says that as an officer, member, manager or other responsible person you willfully failed to pay the tax it collected. If you know the federal trust fund recovery penalty, this is the sales tax version, with one difference: the business has to have closed first. If a lien or a levy against you is already in the picture, start with our California tax collection attorney page.

What a dual determination is and why you received one

A dual determination is how the CDTFA collects a terminated business’s sales tax from the people who ran it, and it arrives because the business closed with a balance, the collector decided you controlled its tax affairs, and other bills appear to have been paid while the sales tax was not. Section 6829 of the Revenue and Taxation Code reaches through corporations, partnerships and limited liability companies to the people behind them. The CDTFA has to establish four things: the business has terminated, dissolved or abandoned its operations; you were an officer, member, manager, partner or other person responsible for filing its returns or paying its tax; your failure to pay was willful; and the tax is tax the business collected from someone else, sales tax reimbursement added to its prices or use tax collected from its purchasers. The CDTFA’s regulation on the subject, Regulation 1702.5, defines willful as intentional, conscious and voluntary: you knew the tax was due and unpaid, you could have paid it, and you chose not to. Paying rent, payroll and suppliers while the return sat unpaid is usually all the collector needs.

The deadline on a dual determination and what happens if nothing is done

The deadline is 30 days from the date the Notice of Determination was mailed, and if no petition for redetermination is filed by then the determination becomes final, a 10 percent penalty is added to the tax if it is not paid, and the CDTFA collects from you as it collects any final tax debt. Section 6561 of the Revenue and Taxation Code sets the 30 days. The elements are argued in the petition, so a missed deadline takes the defenses off the table, and what remains is collection against you as an individual: a Notice of State Tax Lien, levies on your bank accounts, and an order to your employer to withhold part of your wages. Interest accrues monthly, and the penalties assessed against the business for those periods travel with the tax.

How engagements work

Many matters like this one run as a monthly flat-fee engagement: one number, agreed up front, that covers the work — agency contact, deadlines, document responses, strategy — until the matter resolves. Shorter, well-defined projects are often a one-time flat fee instead, and some matters genuinely fit hourly billing better. We will tell you which you are looking at on the first call, before you commit to anything. If you want the details first, see how we price our work.

Who does the CDTFA say is responsible, and has the business closed?

Tell us where things stand. We respond to new inquiries within one business day.

What to do in the first 30 days

The first 30 days are for filing the petition and gathering the records that decide each element. In order:

Count 30 days from the mailing date on the notice; a short letter that disputes the determination and says why, received by then, preserves every argument.
Compare the periods on the notice to the dates you actually held the role; your liability is limited to tax that came due while you had it.
Find out whether the balance came from an unpaid return or an audit, and if an audit, whether the business petitioned its own Notice of Determination.
If a questionnaire is still unanswered, do not fill it in from memory; its questions about check signing, return signing and which bills got paid are the statute’s elements in plain clothes.
Gather proof of the closing date and of when the CDTFA learned of it: the final return, the close-out notice, the dissolution filing, the last bank statement.

Your options for a dual determination

A dual determination is resolved one of five ways, depending on whether the elements hold and what you can pay.

Petition for redetermination. A written petition within 30 days that contests any element, the periods and the amount, filed without payment and heard at an appeals conference by a CDTFA appeals attorney or auditor independent of the collector.
Appeal to the Office of Tax Appeals (OTA). If the decision after the conference goes against you, the case can go to the OTA, an independent state body, still without paying first.
Pay and claim a refund. Pay the liability and file a claim for refund; a denied claim can go to superior court, the only route to a judge, at the price of the balance up front.
Installment payment agreement. Where the elements hold, monthly payments on the personal liability, with the same lien and default rules as any CDTFA plan.
Offer in compromise. Open to individuals liable for a closed business’s tax once the determination is final: a settlement for less than what is owed, decided on your own assets and income.

What Brotman Law does with a dual determination

For a dual determination our work in the first thirty days is to get the petition on file and take the four elements apart, separating what the CDTFA can prove from what it assumed. The first step is the CDTFA power of attorney, form CDTFA-392. With it on file we pull the collector’s file: the periods, the returns, the determination against the business, and the date the CDTFA recorded the closing. Where the balance came out of an audit, we read the working papers to see how much of it is tax the business actually added to its prices, which is work for our CDTFA audit attorney page, and whether the business’s own determination is still open to challenge. Then we build the record: bank signature cards and the check register on authority, payroll and vendor payments on what was paid while the tax was not, the filing and dissolution dates on termination and the limitation period, and the sales records on whether tax was ever collected. If part of the liability holds, we narrow the periods, argue the penalties down, and build the plan or the offer on your own finances.

Do you need a lawyer for a dual determination?

Usually yes, because the letter is a personal assessment whose defenses are lost if they are not raised within 30 days. The honest exception: if you were the only owner, you signed the returns and the checks, the business collected the tax and did not remit it, and the balance is under roughly $50,000 and one you can pay or put on the CDTFA’s own payment plan, the money is better spent on the balance than on us. We would rather say so on the free 15-minute call than sign you up for work you do not need.

Our monthly engagement fits when you were one of several people who ran the business and the CDTFA picked you, when your title overstated your control, when you joined or left during the periods, when the business is still operating, or when the notice arrived years after the closing.

How the monthly flat fee works for a dual determination

Many matters like this one run as a monthly flat-fee engagement: one number, agreed up front, that covers agency contact, deadlines, document responses and strategy until the matter resolves. It does not include an appeal to the Office of Tax Appeals, a refund suit in superior court or an offer in compromise, each scoped and priced on its own. The engagement ends when the determination is withdrawn or reduced to a number you have accepted, and that number is paid or on a plan that is holding.

Documents to gather

Seven items answer nearly every question a dual determination raises.

The Notice of Determination, every page, with the envelope, plus the questionnaire and any answers sent.
The statements of information filed with the Secretary of State showing who held which office and when.
Bank signature cards and the check register for the periods on the notice.
The sales tax returns for those periods, who signed them, and the audit report if there was one.
Sales invoices or point-of-sale reports showing whether tax was added to the price.
Payroll, rent and vendor payment records for the months the tax went unpaid.
Proof of the closing date: the final return, the close-out notice, the dissolution filing, the last bank statement.

Can the CDTFA hold me personally liable for a corporation’s sales tax?

Yes, under section 6829 of the Revenue and Taxation Code, once the business has terminated, if you controlled or were responsible for its tax matters, your failure to pay was willful, and the tax is tax the business collected from its customers. The corporate form does not protect you from that one debt.

What does willful mean in a CDTFA responsible person case?

Willful means intentional, conscious and voluntary: you knew the tax was due and unpaid, you had the authority to pay it, and you had the ability to pay it and chose not to. It does not require an intent to cheat, and the usual defense is that there was no money to pay anyone or that someone else chose which bills got paid.

How long does the CDTFA have to issue a dual determination?

Three years from the end of the month following the quarter in which the CDTFA learned the business had terminated, and no more than eight years from the end of the month following the quarter in which it actually closed, whichever comes first. A written close-out notice from the business or its representative counts as knowledge, so closing the account in writing starts the shorter clock.

Can the CDTFA issue a dual determination to more than one person?

Yes. Every officer, member, manager or partner who meets the elements can receive a determination for the full amount, and the CDTFA collects the tax once. A payment by the business or by another responsible person reduces what you owe.

Does a dual determination apply if the business is still operating?

No. Section 6829 applies only after the business has terminated, dissolved or abandoned its operations, and while it is operating the CDTFA collects from the business. Termination does not require a filing with the Secretary of State; a business that stopped selling, sold its assets or walked away from its lease has terminated for this purpose.

What if I was an officer in name only?

Then you have a defense, because the statute reaches control and responsibility, not titles; an officer who signed no check, no return and no decision about which bills to pay is not a responsible person. The CDTFA will point to the statements of information and the bank signature card, so the defense is built from who actually ran the money.

The other pages in the CDTFA collections series:

Talk to us

Brotman Law is in San Diego and was founded in 2013. We represent clients anywhere in the country before the CDTFA, and we have resolved 2,200+ matters along the way. The first step is a free 15-minute call with our intake team. From there, the next step is a strategy session with the attorney; if it has no value to you, it is refunded. Book a free 15-minute call.

Sam Brotman, JD, LLM, MBA. Last reviewed September 2026.