Code Section Group

Revenue and Taxation Code - RTC

DIVISION 2. OTHER TAXES [6001 - 61045]

  ( Heading of Division 2 amended by Stats. 1968, Ch. 279. )

PART 1. SALES AND USE TAXES [6001 - 7176]

  ( Part 1 added by Stats. 1941, Ch. 36. )

CHAPTER 8. Administration [7051 - 7099.1]

  ( Chapter 8 added by Stats. 1941, Ch. 36. )

ARTICLE 2.5. Managed Audit Program [7076 - 7076.4]
  ( Article 2.5 added by Stats. 2003, Ch. 87, Sec. 1. )

7076.
  

(a) The State Board of Equalization shall determine which taxpayer’s accounts are eligible for the managed audit program in a manner that is consistent with the efficient use of its auditing resources and the maximum effectiveness of the program.

(b) A taxpayer is not required to participate in the managed audit program.

(Added by Stats. 2003, Ch. 87, Sec. 1. Effective January 1, 2004. See same-numbered section within Article 2, as added by Stats. 2004, Ch. 226.)

7076.1.
  

A taxpayer’s account is eligible for the managed audit program only if the taxpayer meets all of the following criteria:

(a) The taxpayer’s business involves few or no statutory exemptions.

(b) The taxpayer’s business involves a single or small number of clearly defined taxability issues.

(c) The taxpayer is taxed pursuant to this part and agrees to participate in the managed audit program.

(d) The taxpayer has the resources to comply with the managed audit instructions provided by the board.

(Added by Stats. 2003, Ch. 87, Sec. 1. Effective January 1, 2004.)

7076.2.
  

(a) If the board selects a taxpayer’s account for a managed audit, all of the following apply:

(1) The board shall identify all of the following:

(A) The audit period covered by the managed audit.

(B) The types of transactions covered by the managed audit.

(C) The specific procedures that the taxpayer is to follow in determining any liability.

(D) The records to be reviewed by the taxpayer.

(E) The manner in which the types of transactions are to be scheduled for review.

(F) The time period for completion of the managed audit.

(G) The time period for the payment of the liability and interest.

(H) Any other criteria that the board may require for completion of the managed audit.

(2) The taxpayer shall:

(A) Examine its books, records, and equipment to determine if it has any unreported tax liability for the audit period.

(B) Make available to the board for verification all computations, books, records, and equipment examined pursuant to subparagraph (A).

(b) The information provided by the taxpayer pursuant to paragraph (2) of subdivision (a) is the same information that is required for the completion of any other audit that the board may conduct.

(Added by Stats. 2003, Ch. 87, Sec. 1. Effective January 1, 2004.)

7076.3.
  

Nothing in this article limits the board’s authority to examine the books, papers, records, and equipment of a taxpayer under Section 7054.

(Added by Stats. 2003, Ch. 87, Sec. 1. Effective January 1, 2004.)

7076.4.
  

Upon completion of the managed audit and verification by the board, interest on any unpaid liability shall be computed at one-half the rate that would otherwise be imposed for liabilities covered by the audit period. Payment of the liabilities and interest shall be made within the time period specified by the board. If the requirements for the managed audit are not satisfied, the board may proceed to examine the records of the taxpayer in a manner to be determined by the board under law.

(Added by Stats. 2003, Ch. 87, Sec. 1. Effective January 1, 2004.)

RTCRevenue and Taxation Code - RTC2.5