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Lev
Lev, Tax Advisor
Category: Tax
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Experience:  Taxes, Immigration, Labor Relations
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can the BOE audit a company that is no longer in business?

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Can the Calif BOE audit a company that is no longer in business? I have a internet website they found me on, but it belongs to a company I shut down 4 years ago... can they still look into it? And I have lost all my records when my house was taken from me in the economic crash which would make it hard for me to defend myself.


Lev :

Hi and welcome to our site!
Unfortunately - yes - the company may be audited even it was officially closed.


You might be asked you to provide reasonable, necessary information to verify selected items on your tax return. The auditor may also ask you to explain why certain items were not reported on your tax return. If you have any questions about the information you are asked to provide, you may talk to the auditor at any time.

Lev :

You are required to keep tax records. However, if the information requested is not available, the auditor will work with you to obtain alternative information. If you do not furnish the information requested in writing, the auditor may add a penalty of 25% of the additional tax assessed.

Lev :

You have the right to have someone represent you, accompany you, or you may represent yourself during the audit. Considering your situation - it might benefit you if you have someone representing you during the audit.

Customer:

Thank you.... When I talked with them, I explained that website and company was long gone.... they scheduled to come to my house, and look around to "close" the file... were his words.

Customer:

This is my first time ever...not sure what to expect

Customer:

Can this assessment be dismissed in a BK or is like a bad odor that sticks with you?

Lev :

Understand.. that is not a pleasant experience.. but there in nothing life threatening and many person are going through the audit.

Customer:

one last question, and thank you for taking the time... I would say that during that period, 90% of the sales where shipped out of the state... still a tax Liability?

Lev :

If all your tax return weer filed - I suggest to request copies if you do not have your own. If any tax returns were not filed - you would need to prepare them.
You would need to re-create documents the best you could - even if you do not have original receipts.
They may assess additional tax liability. I may not say if they would and what the amount could be - that is why you may have a local CPA representing you - that person will evaluate all your information and will help you to request copies of your tax returns - so you will have same documents that the auditor has.

Lev :

When the audit completed - and you know your tax liability - you will be able to plan further steps. But so fat - it is not clear what to expect - and we may not be certain what to do next.
Again - that is not a very pleasant experiences - but the audit eventually will be over and the life will continue.

Customer:

This is their "Dept" Use Tax Administration Section, ICAT

Lev :

If you are audited for sales tax returns - yes. Nowadays states are short on revenue - and are more aggressive of collection efforts. But you need to cooperate with the auditor and explain your situation.
However to get the best results - you do need representation.

Customer:

Thank you for all the info.... and putting me somewhat at ease.... :)

Lev and 2 other Tax Specialists are ready to help you
Just for your reference - this is a document which describes all procedures during the audit in details
http://www.boe.ca.gov/sutax/staxmanuals.htm

Try to be prepared as much as you could.
First - request all documents that the auditor has
Try to re-establish your own records as much as you could
Consult with a local CPA - if you may have someone to represent you.
Try to cooperate with the auditor.
Do not think about what to do with possible tax debt - that will be next step - after the audit will be completed and you will know the amount assessed.
Your goal now - to get through the audit and minimize possible assessment.
Sorry for your situation.

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