Do you need to appeal a decision made by one of California’s tax agencies? Here is everything you need to know to file a successful California tax appeal.
What is a Tax Appeal?
A tax appeal is a way to contest or dispute a determination made by the California Department of Tax and Fee Administration (CDTFA) or Franchise Tax Board (FTB) regarding your tax return. For example, if the FTB decides that you filed your tax return incorrectly and you now owe back taxes, you can appeal that decision by providing documentation that proves your position.
What is the California Tax Appeal Process?
The California tax appeal process uses the following steps:
Contact the Office of Tax Appeals
Before you file your appeal, you need to timely present your case to the OTA (Office of Tax Appeals). This process is impartial, so they can review your case and tell you if you have grounds to appeal. Additionally, you will need to draft a formal written protest that includes your position and grounds for appeal. You will need to present your cases in front of a panel of three Administrative Law Judges who will either grant or deny your appeal.
File a Lawsuit
If the OTA agrees with your appeal, you can now file a lawsuit against the CDTFA or FTB. All tax appeals differ slightly, so the case proceedings may vary from case to case. For specific advice regarding your California tax appeal, consult with a tax attorney to decide your next steps.
Appeal Collections
If the OTA does not agree with your appeal, or you lose your lawsuit, either the CDFTA or FTB will begin to issue collection notices for the balance owed. At this point you can appeal to collections. It’s important to note that even with an appeal you will still legally owe the determined amount. An appeal can only modify the collections method, not remove the debt itself.
What Do Successful California Tax Appeals Have in Common?
Successful California tax appeals are:
Accurate
Before you present your case, you need to make sure that all the information you’ve gathered is accurate. Even if you think that your information is accurate, it may be beneficial to consult with a tax attorney and ask them to review the information you intend to present. Due to their expertise and familiarity with the appeal process, they may be able to find errors or issues that you missed. Presenting your case with errors will only hurt your credibility and may affect the outcome of your California tax appeal.
Comprehensive
Your information also needs to be comprehensive. Any bit of information that is necessary for your case should be assembled and included. Similar to the accuracy issue, you may want to consult with a tax attorney to see if you are missing any documentation that the appeal may require. In some cases, a tax attorney may be able to recommend documentation or help you find alternatives to missing or lost records.
Organized
California tax appeals need to be organized. When you submit an appeal, you are essentially contesting a government decision. Therefore, you want your argument to be well organized and on point. This means going beyond simply putting your documents in an envelope and hoping for the best. A tax attorney can help you to organize your case and present it in the best light possible.
Researched
One key way to ensure the success of your California tax appeal is to ensure it is well researched. Beyond just understanding tax appeals, this will require legal authorities, including past tax appeals similar to your own. This is often referred to as precedent. If you are able to provide precedent, your appeals are much more likely to be successful. A tax attorney will be able to perform this research on your behalf and strengthen your overall case.
Locally Legal
While this may seem like a given, when you make a tax appeal, you need to ensure to adhere to the local laws of the state. This is particularly important for individuals who have recently moved to California and may not be as familiar with the state’s tax laws. A tax appeal that was successful in another state may not be viable in California. Hiring a licensed California tax attorney can prevent this problem as they are specifically trained in California tax appeals.
While you can always put together your own case, choosing to invest in a licensed tax attorney can be the difference between a win and a loss.
Do You Need to Make a California Tax Appeal?
Don’t go through the process alone. A licensed tax attorney can provide you with the tools you need to successfully win your California tax appeal. Contact Mindy Meigs expert tax attorney for help with tax appeals.