California –Managed Audit Program

SALT Report 3062 – The California State Board of Equalization updated a publication that provides general information regarding the BOE’s Managed Audit Program.  This program allows qualified businesses to conduct self-audits that are supported with instructions and guidance from a BOE auditor.

A business will be eligible for the Managed Audit Program if their tax issues are generally straightforward, their transactions are not subject to a number of sales tax exemptions, and they have the resources and capabilities to do the work.  Once a business is approved they will enter into a Managed Audit Program Participation Agreement with the BOE, and under the direction of an auditor, the business will be asked to review their records to determine whether they have met their obligations under the state, local, and district sales and use tax laws.  In addition, the business will be asked to examine their sales and purchase records to see whether they have:

  • Calculated and reported the correct amount of sales tax due
  • Documentation to support any claimed sales tax exemptions or exclusions
  • Paid sales or use tax on their purchases
  • Correctly calculated and reported the tax

When the review and the necessary worksheets have been completed by the business, the auditor will verify the information and address any problem areas.  At this point, the auditor will complete their portion of the audit and explain the audit results.

If the BOE determines that a business has successfully completed the managed audit program they will only charge interest on the tax liabilities at half the rate that would be charged in a traditional audit.

For Further Information

California State Board of Equalization – Publication 53 Managed Audit Program