Assessing if you really think you owe early on helps avoid further costs.Д«est practice during audits is to find a certified tax attorney to represent you. Penalties and interest accrue over time.Even if you do lose with the IRS you potentially could provide documents and work through those issues with the FTB.The benefits of notifying FTB of IRS audit closures are: Notifying FTB within the six-month window of an IRS audit closure ensures you donвЂ™t waive any potential rights you have to petition or fight that assessment.

Legally, FTB can send tax bills to your business 4 or more years later if they are not notified within the six-month window.Д¬A FTB can return years later to examine income assessed during the past IRS audit, and carry it over as money owed to the State of California. This means FTB no longer has a limited time frame to initiate legal proceedings to investigate your case.

By reporting your audit findings you can save yourself time and effort of another review of your tax filings.ДЇailure to notify FTB within the six-month time frame does not terminate the California Statute of Limitations. It is in a business ownerвЂ™s interest to self report because the state agency will re-open the audit to ensure that they were not shorted in the audit collection. While IRS will report audit findings to FTB, the agency is severely backlogged and often does not report the results of an audit within the 6 month window.

It could take a couple of years for FTB to find they were not notified of IRS audit findings. If the agency is not notified, they will find out, itвЂ™s just a matter of time. After an audit, CA Franchise Tax Board (FTB) must be notified of the claims within six months. If an IRS audit assessment concludes with findings of an underpayment, thereвЂ™s more to be done for the audited party than simply agreeing and paying fines. According to the FTB, their mission is to, вЂњhelp taxpayers file tax returns timely, accurately, and pay the correct amount to fund services important to Californians.вЂќ What is the role of the California Franchise Tax Board?ДЇranchise Tax Board (FTB) collects the stateвЂ™s personal income taxes and can audit back four years of tax returns. Simply put, if IRS wants to extend an audit timeframe, they can and will find a way to extend the audit time period. In California specifically, IRS has an unlimited time frame to audit records if: Typically, Internal Revenue Service (IRS) audits back three years, but that time frame can be extended under various circumstances. While IRS will send the results of your audit to the state agency, it is in your best interest to self-report the results of your audit and prevent the possibility of a CTFB review of your federal audit results. California residents and business owners in the state who are audited by IRS have a responsibility to report their IRS audit findings to the California Franchise Tax Board.

California franchise tax board