Chief Counsel Corner
Chief Counsel's Corner Teams up with Audit!
The Franchise Tax Board's (FTB) mission is to determine the proper amount of tax owed. Taxpayers and their representatives have every right to expect that each audit and protest will be performed by the auditor, hearing officer, or attorney (FTB staff) with integrity, efficiency, and fairness.
However, listed below are some helpful reminders, if taxpayers or representatives:
- Feel that the FTB is not working through an audit or protest at the expected level of integrity, efficiency, and fairness.
- Encounter difficulties resolving issues with FTB staff.
- Have concerns with potential retaliation if they come forward to FTB management with their concerns.
Retaliation against a taxpayer or representative is not in keeping with FTB’s mission, and is not tolerated by FTB management.
Conflict can often be avoided or resolved quickly between the taxpayer or representative and FTB staff through timely communication and by establishing mutual expectations from the beginning, such as, establish an action plan for timely requests and responses for information, communicate unexpected delays beyond 30 days, request relevant and reasonable information, and agreeing upon alternative documentation. It is mutually beneficial for the taxpayer or representative and FTB staff to work together on information requests for relevant and reasonable information. The taxpayer has a duty to maintain relevant records and documents. FTB staff should work with the taxpayer or representative to resolve difficult information requests, establish reasonable response times, and consider materiality.
Engaging in an open dialogue enables both parties to:
- Recognize that the other party has an underlying issue or problem.
- Better understand each other’s concerns.
- Help bring an audit or protest to an efficient, fair conclusion.
The earlier this conversation occurs, the better the potential to prevent a smaller problem from growing into a bigger problem.
Sometimes conflicts and problems between a taxpayer or representative and FTB staff are not resolved through direct communication. The next step for a taxpayer or representative would be to contact the supervisor of the assigned FTB staff.
Supervisors are typically aware of specific audits or protests, but they may not be aware of developing problems. Contacting a supervisor or lead, and fully explaining the problem should enable a resolution. For example, it would be helpful to convey the issue, what communication has occurred with the FTB staff, and the desired resolution that could not be achieved.
If a taxpayer or representative is unable to successfully come to a resolution with a lead, supervisor, or manager, they may always advise either of us of their concern. As Chief Counsel and Audit Division Chief, we will ensure issues are addressed and take appropriate action.
In conclusion, it is important that all FTB staff act with integrity, efficiency, and fairness. Retaliation against taxpayers or representatives is not tolerated. Problems between a taxpayer or representative and an FTB staff can usually be resolved through prompt communication and actively working with the FTB staff early in the process to address issues, or through the FTB staff’s lead, supervisor, or manager. If a taxpayer or representative issue is not resolved, please bring it to our attention.