During my time at the Franchise Tax Board as a court-ordered debt collector, one of the taxpayers had underreported their income. This was not the first time that this particular taxpayer was being selected for an audit. Through the help of the Franchise Tax Board’s CP-2000 program, a computer program developed to identify such individuals, the FTB called for a tax audit on the taxpayer. As per the steps taken during an audit, I assigned the taxpayer a specific auditor. Since this was not the first audit to be carried out on his account, a lot of time was taken to compare the federal and state tax information on the returns.
I notified the taxpayer of the audit to be carried out together with the taxpayer’s rights. He needed to provide documentation of his tax returns to the auditor. With the use of the Franchise Tax Board and tax law information, I analyzed the taxpayer’s returns by searching for any discrepancies. It was evident that the taxpayer owed money to the FTB, together with interest and penalties. An NPA was issued to the taxpayer informing him of the additional charges he faced, as per the tax law where a tax debt accrues interest until it is paid.
In the outcome, the taxpayer did not file for a protest but instead requested a permanent waiver on his electronic transactions. This was permitted since he did not have an extension payment worth more than $20000. He also requested for an instalment plan on his assessed tax. In the end, the FTB got their dues, and the taxpayer avoided additional penalties.