Tax News
Chief Counsel Corner


Steve Sims, Taxpayers' Rights Advocate.

To Docket or Not to Docket - That is the Question

A taxpayer who receives a Notice of Proposed Deficiency Assessment (NPA) may request an administrative review by the Franchise Tax Board (FTB) of that proposed assessment by filing a "protest" as provided in R&TC Section 19041. Protests are assigned to a hearing officer in various units within FTB depending upon the origin of the NPA or the subject matter of the NPA. Some protests are handled by the Accounts Receivable Management Division and some by the Filing Division. Also, some are handled in the Audit Division's automated program areas. 

Protests of NPAs that originate as the result of field audits are handled either in FTB’s Audit Division or FTB’s Legal Division. Each week, a list of all of this type of new protests filed with the FTB is distributed to staff in both the FTB Audit and Legal Divisions to determine whether to docket the protest. Protests assigned to the Legal Division are called "docketed protests.” Protests assigned to the Audit Division are called "undocketed protests."

You may wonder what criteria are used to determine which cases will be handled by the Legal Division and which will be handled by the Audit Division. In general, protests handled in the Legal Division typically involve larger dollar amounts and more complex issues. They may also involve emerging issues or issues of first impression. In addition, most protests involving assessments based on the use of potentially-abusive tax avoidance transactions are handled by the Legal Division. 

Even though a protest case may be assigned to the Audit Division does not mean the Legal Division will not be involved, and vice versa. FTB attorneys are available to consult with the Audit protest hearing officers as needed throughout the process, and Audit support is also utilized by the attorneys handling docketed protests. FTB Legal and Audit Divisions work collaboratively in the handling of taxpayers' protests.

Jozel Brunett
Chief Counsel

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