Chapter 1: General Information - Sensitive Information
Which of the following information is not confidential?
A. Account number, business name, names of general partners, business and mailing addresses
B. Business code and ownership designation
C. Start and close-out dates and status of permit (i.e., active/ inactive)
D. A&B
E. All of the above
E. All of the above
DISCLOSURE OF CONFIDENTIAL INFORMATION TO A TAXPAYER REPRESENTATIVE WITHOUT WRITTEN AUTHORIZATION 0101.65
Under the Sales and Use Tax program, all but the following information is confidential: account number, business name, names of general partners, business and mailing addresses, business code, ownership designation, start and close-out dates, status of permit (i.e., active/ inactive), and tax area code.
Which of the following is a purpose of tax auditing listed in Chapter 1?
A. To assure all citizens of the state that the tax is being enforced uniformly
B. To deter tax evasion and carelessness in self-assessments
C. To promote accuracy in self-assessments through aid extended to taxpayers with respect to the interpretation of the law and rules and regulations adopted thereunder
D. All of the above
D. All of the above
TAX AUDIT POLICIES 0101.20
Purpose of Tax Auditing Because most of the taxes administered by the CDTFA are self-assessed by the taxpayers, an audit program is essential in providing for the following objectives: • To assure all citizens of the state that the tax is being enforced uniformly; • To deter tax evasion and carelessness in self-assessments; and • To promote accuracy in self-assessments through aid extended to taxpayers with respect to the interpretation of the law and rules and regulations adopted thereunder
TRUE OR FALSE?
A petition for redetermination of a notice of jeopardy determination must be filed within 10 days after the date of the notice of jeopardy determination.
TRUE
PRE-APPEALS CONFERENCE PHASE 1404.04
A petition for redetermination of a Notice of Jeopardy Determination must be filed within 10 days after the date of the Notice of Jeopardy Determination. Within that 10-day period the taxpayer must either pay the amount due, or file a petition for redetermination and post a deposit with the Board in the prescribed amount for security. The petition for redetermination must be in writing and state the specific grounds upon which it is founded.
TRUE OR FALSE?
Reaudits are considered priority assignments.
TRUE
REAUDITS RECOMMENDED BY D&R 1406.00
Reaudits requiring minimal adjustments will be completed in Headquarters by Petitions or, for claims for refund, by Refunds. If the reaudit requires office staff to review additional records to be provided by the taxpayer, Petitions or Refunds will contact the appropriate office or unit. Reaudits should be considered priority assignments.
TRUE OR FALSE?
RTC section 7060 authorizes rewards for information leading to the collection of unreported or under reported sales and use taxes.
TRUE
REWARD PROGRAM 0122.00 GENERAL 0122.02
RTC section 7060 authorizes rewards for information leading to the collection of unreported or under reported sales and use taxes. This program, however, has not been funded.
Individuals occasionally indicate that they have information that would enable the CDTFA to recover sales tax revenues. Tax auditors should advise these individuals that there is currently no state funding that would enable us to provide a reward.
However, tax auditors may attempt to obtain such information by appealing to the person’s sense of duty as a good citizen.
TRUE OR FALSE?
The procedures outlined in this manual are not inflexible. However, all sections of Chapter 2, Field Audit Reports, and the bolded portions of the other chapters are to be followed exactly. The audit supervisor must approve any deviation from these instructions.
False
PURPOSE OF AUDIT MANUAL 0101.05
The procedures outlined in this manual are not inflexible. However, all sections of Chapter 2, Field Audit Reports, and the italicized portions of the other chapters are to be followed exactly. The audit supervisor must approve any deviation from these instructions.
TRUE OR FALSE?
Generally, the taxpayer has 15 days from the date the Notice of Determination is issued to file a petition for redetermination.
False
PRE-APPEALS CONFERENCE PHASE 1404.04
Generally, the taxpayer has 30 days from the date the Notice of Determination is issued to file a petition for redetermination. Instructions for filing petitions for redetermination are included on the taxpayer’s copy of the Notice of Determination. The taxpayer may also file a claim for refund with respect to any payment made toward the determination.
Which of the forms listed below correspond to the Report of Discussion of Audit Findings that should fully address the taxpayer’s contentions?
A. CDTFA- 863A
B. CDTFA- 808A
C. CDTFA- 836A
D. None of the above
C. CDTFA-836A
OFFICE RESPONSIBILITIES 1408.06
When Refunds refers a claim for refund to an office for investigation, the office will investigate the claim and submit a report of its findings. This report may be in the form of an audit report, a Field Billing Order (FBO), or a signed memorandum to Refunds, as appropriate. If the claimant does not concur with the report, the office will submit a Form BOE-836-A, Report of Discussion of Audit Findings, to Refunds for processing.
TRUE OR FALSE?
When a resource person accesses Franchise Tax Board (FTB) information on the FTB’s online databases (TI, “Taxpayer Information System” and BETS, “Business Entity Tax System”) and prints IRS information contained on screens of the databases, it is considered FTI.
True
PROCEDURE FOR OBTAINING AND SAFEGUARDING INFORMATION FROM THE IRS AND FTB 0115.00
When a resource person accesses Franchise Tax Board (FTB) information on the FTB’s online databases (TI, “Taxpayer Information System” and BETS, “Business Entity Tax System”) and prints IRS information contained on screens of the databases, it is considered FTI.
Which form should taxpayer file when requesting a relief of interest, penalty, or collection cost recover fees?
A. CDTFA-735: Request for Relief from Penalty, Collection Cost Recovery Fee, and/or Interest
B. CDTFA-737: Request for Relief from Penalty, Collection Cost Recovery Fee, and/or Interest
C. CDTFA-775: Request for Relief from Penalty, Collection Cost Recovery Fee, and/or Interest
A. CDTFA-735
Request for Relief from Interest – Unreasonable Error or Delay (cont.) 0104.00
If a written request is received, it must also include the statement that it is signed under “penalty of perjury” (CDTFA-735, Request for Relief from Penalty, Collection Cost Recovery Fee, and/or Interest, contains the penalty of perjury statement).
How many days does a claimant have to provide supporting documentation when filing a claim for refund under the appeals process?
A. 15 days
B. 10 days
C. 30 days
C. 30 Days
Section 1408.4 - Once a claim for refund is received, Refunds will promptly notify the claimant that the claim has been received by sending an acknowledgement letter. If the tax portion of a liability has been paid in full and documentary evidence is required to verify the claim, Refunds will request documentation from the claimant to support the claim.
Refunds will send a follow-up letter to the claimant referencing the prior letter requesting documentation. The claimant will be advised that if documentation is not provided within 30 days of the date of the letter, the claim for refund will be denied.
TRUE OR FALSE?
A petition becomes invalid if it is filed prior to the issuance of a Notice of Determination
True
Section 1409.00 A petition for redetermination (petition) must be filed within 30 days following the date a Notice of Determination (NOD) is mailed. A petition is invalid if it is filed prior to the issuance of an NOD or more than 30 days following the date the NOD was mailed, often referred to as the “finality date.”
Which of the following are not examples of qualified written advice provided in a prior audit?
A. The use of, or failure to use, a percentage of error in a prior audit.
B. Prior audit comments or schedules that state that a specific item or charge is not subject to a tax/fee
C. Acceptance by the CDTFA staff, during an audit, of the percentage used by the tax/ feepayer in reporting taxable sales on an estimated basis.
D. A&B
E. A&C
E. A&C
The use of, or failure to use, a percentage of error in a prior audit.
Acceptance by the CDTFA staff, during an audit, of the percentage used by the tax/ feepayer in reporting taxable sales on an estimated basis.
Qualified Written Advice 0105.04
The following are examples of qualified written advice provided in a prior audit:
2. Prior audit comments or schedules that state that a specific item or charge is not subject to a tax/fee or was properly reported constitute written advice with respect to that item or charge.
The following do not qualify as written advice:
4. Acceptance by the CDTFA staff, during an audit, of the percentage used by the tax/ feepayer in reporting taxable or exempt transactions is not misinformation when a different percentage is deemed more appropriate in the succeeding audit. When the tax/feepayer reports on an estimated basis, the accuracy of that estimate will be tested as part of every audit.
5. The use of, or failure to use, a percentage of error from a prior audit (AM section 0405.33) does not create a basis for a claim for relief under the authorizing statutes in relation to a subsequent audit.
Which of the followings can be relieved?
A. Penalty
B. Interest
C. Collection Cost Recovery Fee
D. All of the above
E. A&B
D. All of the above
Penalty, interest, collection cost recovery fee
Request for Relief from Interest – Unreasonable Error or Delay 0104.00
If a written request is received, it must also include the statement that it is signed under “penalty of perjury” (CDTFA-735, Request for Relief from Penalty, Collection Cost Recovery Fee, and/or Interest, contains the penalty of perjury statement).
TRUE OR FALSE
Can the department that issued the NOD accept an invalid petition into the appeals process as an administrative protest?
True
Section 1409.00 - The department that issued the NOD may accept an invalid petition into the appeals process as an administrative protest pursuant to the Rules of Tax Appeals section 5220
In general determinations are the result of the following:
A. Audits
B. Compliance assessments (failure to file returns)
C. Review of returns filed (errors on returns)
D. Dual Determinations
E. All of the above
E. All of the above
PRE-APPEALS CONFERENCE PHASE 1404.04
Other Investigations While most determinations are the result of Board audits, other types of determinations may result from the following: 1. Compliance assessments (e.g., for failure to file returns) 2. Review of returns filed (errors on returns) 3. Dual determinations 4. Corporate officer or responsible person liability 5. Notice of successor liability 6. Field billing orders
An email must be sent to ___________ confirming the Federal Tax Information (FTI) materials are being returned for destruction, and the FTI materials will be destroyed by ____________.
A. BTFD- Federal Tax Information (FTI) Custodian, The Compliance and Technology Section (CTS)
B. BTFD-FTI Custodian, BTFD-FTI Custodian
C. Direct Supervisor of Requestor, BTFD-FTI Custodian
D. The Compliance and Technology Section (CTS), Office Administrator
A. BTFD- Federal Tax Information (FTI) Custodian, The Compliance and Technology Section (CTS)
INTERNAL REVENUE SERVICE (IRS) 0115.02
Destroying FTI When hard copy documents, including transcribed notes, levy letters and Memorandum of Garnishee, that are provided to CDTFA are no longer needed, they must be forwarded to the supervisor of the CTS (MIC 40) in a double sealed envelope marked “Confidential” for destruction.
In addition, an email must be sent to the BTFD-FTI Custodian’s mailbox confirming the FTI materials are being returned for destruction. The date of the email is entered into the database in the “District Return Notification” section. When CTS receives the FTI materials and CDTFA forms, they date stamp the envelope and enter the date returned in the database “Received from District” section.
The FTI materials will be destroyed with the approved shredder located in CTS.
The “preponderance of evidence” standard can be defined as?
A. “Testimony, writings, material objects, or other things presented to the senses that are offered to prove the existence or nonexistence of a fact”
B. “Such evidence as, when weighed with that opposed to it, has more convincing force and the greater probability of truth”
C. “Assumption of fact that the law requires to be made from another fact or group of facts found or otherwise established in the action”
B. “Such evidence as, when weighed with that opposed to it, has more convincing force and the greater probability of truth”
STANDARD OF PROOF 0101.22
The “preponderance of evidence” standard relates to the probability of truth, and can be defined as, “such evidence as, when weighed with that opposed to it, has more convincing force and the greater probability of truth” or, more succinctly, “more likely to be true than not true.”
A request for an appeals conference may be denied if the claimant
A. Has already been provided with an appeals conference on the same issue
B. Has not submitted any additional arguments
C. Has not submitted any additional documentation or evidence
D. All of the above
D. All of the above
Section 1408.4 A request for an appeals conference or Board hearing may be denied if the claimant has already been provided with an appeals conference on the same issue, and has not submitted any additional arguments, documentation or evidence.
When Refunds refers a claim for refund to an office for investigation, the office will investigate the claim and submit a report of its findings. This report may be in the form of
A. An audit report
B. A Field Billing Order (FBO)
C. A signed memorandum to Refunds
D. All of the above
D. All of the above
Section 1408.06 When Refunds refers a claim for refund to an office for investigation, the office will investigate the claim and submit a report of its findings. This report may be in the form of an audit report, a Field Billing Order (FBO), or a signed memorandum to Refunds, as appropriate. If the claimant does not concur with the report, the office will submit a Form BOE-836-A, Report of Discussion of Audit Findings, to Refunds for processing.