CDTFA Defense Strategy

At Brotman Law, we focus on providing as much as we can for our clients. Our strategy pages give you a detailed look at how we approach each type of tax issue – so you can understand what to expect when you work with us.

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Tax Strategy & Optimization

• Business Tax Optimization
• Individual Tax Optimization
• Residency & Multi-State Tax Issues
• Exit Planning and Other Corporate Transactions
• Real Estate and Investment Portfolio Optimization

Tax Defense

• Criminal Tax Defense
• IRS Audits
• California Income Tax (FTB)
• California Sales, Use, and Excise Tax (CDTFA)
• California Payroll Tax (EDD)
• IRS Tax Debt Resolution
• California Tax Debt Resolution
• Other State Tax Representation

Employee Retention Tax Credit

• Employee Retention Tax CreditFilings
• Employee Retention Tax CreditAudits
• Employee Retention Tax CreditAppeals
• Employee Retention Tax CreditLitigation

Other Complex Tax Issues

• International Tax Controversy and Compliance
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Blog

Negligence Penalties in California Sales Tax Audits

Generally, a penalty of 10% will be added if any part of the tax deficiency resulting form taxpayer's negligence or intentional disregard of the law.

Blog

California Sales for Resale and Resale Audits

A claimed sale for resale will be allowed in a CDTFA audit if it is supported by a resale certificate that is proper in form and is timely taken in good faith from a person who is engaged in the business of selling tangible personal property and who holds a California seller’s permit.

Blog

Secrets of a California Sales Tax Audit Defense

Sales tax audits are one of the areas of practice that I am most proud of at our firm. We have dealt with some very difficult cases and gotten some really phenomenal results.

Blog

Should I Hire a California Sales Tax Lawyer to Help Me With My Sales Tax Audit?

While dealing with the fallout of a CDTFA sales tax audit is rarely pleasant, it is possible to mitigate the effect on your business, if you have the right help.

Blog

How to Prepare for a California Sales Tax Audit

Preparing and organizing materials for a California sales tax audit is by and large a unique process based on the individual facts and circumstances of a particular matter.

Blog

What Triggers a Sales Tax Audit in California?

A sales tax audit occurs when the CDTFA suspects a business’s reported sales have been understated. Most commonly, this occurs in situations where there is a “mismatch” or an incongruency between the sales tax returns filed with CDTFA and what was reported to other agencies (like the IRS).

Blog

What Is California Sales Tax?

Most people are quite familiar with the concept of sales taxes on a very basic level. After all, we all buy stuff and, when we do, there is a tax associated with those purchases.

Blog

The Ultimate Guide to California Sales Tax Audits

Our law firm has dedicated the time and the resources to creating our complete guide to California sales tax audits. We wanted to put together the best resource on the internet for taxpayers faced with the prospect of a CDTFA audit

CDTFA

Do I Need a Sales Tax Attorney to Fight the CDTFA?

CDTFA agents work for the state government and are thus motivated to collect. Do not expect them to give you a break if you owe sales taxes.

CDTFA

Defining Collections Resolutions with the CDTFA

If you have a lien issued by the CDTFA, there are some instances that taxpayers can set up a payment plan. Find out how in this article.

CDTFA

What Happens If I Purchase a Business with a Tax Liability?

Buyer beware! When a business is purchased, the CDTFA will first attempt to collect back taxes from its predecessor. If unsuccessful, the buyer will receive a notice of liability.

The Ultimate Guide To California Franchise Tax Board (FTB) Collections

In these articles, San Diego tax attorney, Sam Brotman, explains tax procedure and the California Franchise Tax Board for the benefits of businesses and business owners.

CDTFA

How Do CDTFA Tax Liens Work?

Do you have a tax lien stating the CDTFA has a legal claim to your personal or real property? Here’s what you need to know.

CDTFA

How Does the CDTFA Conduct Assessments and Collections?

Are you aware that in a sales-tax-collection matter, the CDTFA will assess as many people as it can – from corporate officers to shareholders?

CDTFA

What Are the Consequences of Not Paying Sales Tax?

The consequences of neglecting to pay taxes either by the filing date or through an installment plan could be catastrophic.

Blog

The Ultimate Guide to California Department of Tax and Fee Administration (CDTFA) Collections

Do you sell goods in the state of California? Understanding why you pay such high sales taxes might take the sting out of shelling out. Then again, it might not.

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The Audit Process Step by Step

Here's what happens from the moment you receive an audit notice to resolution:

1. Notice received — The IRS sends a letter explaining what they're examining and what documentation they need
2. Power of Attorney filed — We sign Form 2848, which means the IRS talks to us, not you
3. Document review — We review every document before anything goes to the IRS. We provide exactly what's needed — nothing more
4. Examination — The IRS reviews your records. For office and field audits, we attend all meetings in your place
5. Proposed adjustments — If the IRS wants to make changes, they issue a written proposal. We review it line by line
6. Negotiation or appeal — We challenge anything we disagree with. If we can't resolve it at the exam level, we take it to appeals
7. Resolution — Case closed. We make sure you understand the outcome and what it means going forward

Why You Need Professional Representation

Here's the reality: anything you say to the IRS can be used against you. Even an innocent statement can be misinterpreted, taken out of context, or used to expand the scope of your audit.

Your CPA probably filed your return. That's great. But filing a return and defending one are two completely different skills. You wouldn't send your dentist to perform heart surgery — the same logic applies.

A qualified tax attorney knows IRS procedures inside and out, understands the legal standards the IRS must meet, and knows exactly how to position your case for the best possible outcome.

Appeals & Next Steps

If you disagree with the audit results, you have the right to appeal. The IRS Office of Appeals is independent from the examination division, and they settle the majority of cases they hear.

We've won over 100 appeals by building cases that are thoroughly documented and legally sound. The key is presenting a clear, well-organized argument that makes it easier for the appeals officer to rule in your favor.

If appeals doesn't resolve it, the next step is Tax Court. We're prepared for that too, but in our experience, most cases settle well before they get to trial.

How to Prevent Future Audits

Once your audit is resolved, the last thing you want is another one. Here's what we recommend to minimize your risk:

• Keep meticulous records — especially for deductions and business expenses
• Report all income — even if you didn't receive a 1099
• File on time, every time
• Use actual calculated figures rather than round numbers — while not a major audit trigger on its own, it's a best practice that signals accuracy in your records
• Work with a qualified tax professional who understands your situation
• Consider a proactive tax strategy engagement to optimize your structure and reduce risk