Your tax audit

A tax audit is a review of your tax return to verify that your income and deductions are accurate. Audits can originate from multiple sources, including the IRS.

We’ll contact you in writing if your return is under audit. Your letter may include the following:

• What tax year(s) and issue(s) we are reviewing
• Additional information we need you to provide
• How to contact us

Audit timeframes can vary based on complexity.

Visit Frequently asked Questions about your tax audit (FTB 1015B) for more information.

During an audit

We’ll work with you to:

• Schedule appointments
• Review deadlines
• Go over documents you have provided to support your position
• Give you a chance to respond to our position prior to closing the audit

We may send you one or more Information Document Requests (IDRs) to gather facts, understand, and verify the items you reported on your tax return.

You have the right to have a representative at any time during an audit, such as an accountant, or tax attorney. Review your taxpayer rights and Audit/Protest/Appeals (FTB 985) for more information.

After the audit

We will notify you of the results of the audit in writing.

You may receive one or more of the following:

• No Change letter that states we accepted your tax return as filed and you do not owe additional tax
• Notice of Proposed Assessment that proposes the additional tax and/or penalties based on the audit results
• Notice of Proposed Overassessment or a Computation of Proposed Overpayment
• Notice of Overassessment, Credit, or Refund
• Notice of Proposed Adjusted Carryover Amount that proposes reduction of a carryover item which did not result in any additional tax for the tax year examined
• A letter that indicates we have fully or partially denied your claim for refund

If applicable, you’ll have an opportunity to protest or appeal if you disagree with a tax decision.

Statute of limitations (SOL)

SOL is a time limit imposed by law on us to issue our assessment for additional taxes, penalties, and/or fees.
Generally, we have 4 years from the date you filed your return to issue our assessment. However, if you:

• Filed your return before the original due date, we have 4 years from the original due date to issue our assessment.
• Did not file a return for the tax year, we can issue our assessment at any time.

You have federal adjustments

R&TC 18622 requires you to notify us within 6 months of a federal adjustment .

• If you notify us within 6 months, we have 2 years from the date you notified us to issue our assessment.
• If you notify us after 6 months, we have 4 years to issue our assessment.
• If you do not notify us, we can issue an assessment at any time.

Statute of limitations waivers

Will FTB still require taxpayers and/or tax representatives to provide statute of limitations waivers containing original signatures?

We previously announced that we will temporarily accept statute of limitations (SOL) waivers with electronic signatures through June 30, 2023. The electronic signature option for SOL waivers is no longer temporary.

Effective July 1, 2023, taxpayers have the option to submit SOL waivers with electronic signatures using FTB's approved signing process, indefinitely. Upon request, FTB will send by secure email to a taxpayer (or their authorized signer) an SOL waiver that can be electronically signed and then returned to FTB.

Moving forward, taxpayers and/or their representatives may submit SOL waivers to us by any of the following methods:

• Fax the SOL waiver to us with a handwritten signature
• Email a copy of the SOL waiver with a handwritten signature to us from a verified email address
• Upload a scanned copy of the SOL waiver with a handwritten signature to the taxpayers’ MyFTB accounts
• Upload a scanned copy of the SOL waiver with a handwritten signature to cloud storage and provide our staff the link to download the waiver
• Submit SOL waiver with electronic signature using FTB's approved signing process.

For more information, see PSB 23.14, E-Signatures for SOL waivers.