SECTIONS 7076-7076.4 - California Statutes

REVENUE AND TAXATION CODE

SECTION 7076-7076.4

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.

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.

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.

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.

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.