In January the California State Board of Equalization (SBE) issued Letter To Assessors No. 2009/003, indicating a change in policy regarding mandatory audits. In a nutshell the policy change reads:
“Effective January 1, 2009, county assessors are no longer required to audit all taxpayers with trade fixture and business tangible personal property holdings of $400,000 or more at least once every four years. Instead, the county assessor is required to annually audit a significant number of audits as specified in section 469, subdivision (a)(1)”
The LTA goes on to “indicate” what a “significant number of audits” means by saying:
“For purposes of this section, “significant number of audits” means at least 75 percent of the fiscal year average of the total number of audits the assessor was required to have conducted during the 2002-03 fiscal year to the 2005-06 fiscal year, inclusive, on those taxpayers in the county that had a full value of four hundred thousand dollars ($400,000) or more of locally assessable trade fixtures and business tangible personal property. ”
Huh?
When I read it I understood the “no more mandatory audits part”, but I didn’t get the “implementation” part. I was also pretty sure that even if I was a county auditor in California I wouldn’t have understood it. As it turns out, my assumption had some validity.
The SBE recently issued LTA No. 2009/13, fielding a few of, what I can only imagine to be, a plethora of questions.
Of the five (really, only five?) questions asked, number four peaked my interest:
Question: If a mandatory audit scheduled for 2008 (2008-2009 fiscal year) is pending as of January 1, 2009, and it falls below the top 50 percent (not part of the significant number of audits under section 469(b)(1)), must it be completed?
Answer: No.
So, the question is, do you have pending audits that can be canceled or settled?
Tags: CA audits, CA Personal Property, California audit, personal property audits, personal property reporting, personal property tax