September 8, 2003
FOR IMMEDIATE RELEASE
California Extends and Expands Managed Audit Program.
CA A1043, which extends and expands Cal. Rev. & Tax. Cd. §7076.1, et. al, Managed Audit
Program ("MAP"), is effective January 1, 2004 through January 1, 2009. The revised MAP
allows taxpayers on a
prepayment reporting basis to participate in the program. (The program now applies to
taxpayers with a measure of tax liability averaging $17,000 or
more per month.) The revised MAP also specifies that Section 6596, the statute that provides
relief of tax, interest, and penalty in cases where the taxpayer relied on erroneous advice from
the Board, applies to managed audits.
At the discretion of the Board, and consistent with the efficient use of audit resources,
taxpayers that meet the following criteria can be considered candidates for a managed audit:
- Persons whose business involves few or no statutory exemptions
- Persons whose business involves a single or small number of clearly defined
taxability issues
- Persons who agree to participate in the MAP
- Persons who have the resources to comply with the managed audit instructions
provided by the Board
In return for performing the managed audit, upon completion and verification by the Board the
taxpayer will be liable for only one-half of the interest imposed under the current law on any
tax liability discovered. The managed audit program does not in any way limit existing
statutory authority to examine the books, papers, records, and equipment of a taxpayer under
Cal. Rev. & Tax. Cd. §7054.
If you have any questions regarding this information,
please call Rich Carlson, Principal at Ryan & Company,
at 213.627.1719. Mr. Carlson can also be reached by
e-mail.