Section 5218 - Review of the Petition by the Assigned Section(a) Initial Review of Petition. The assigned section must review the petition, notice of determination, and any other relevant information.(b) Referral of Petition. The assigned section may refer the petition to the Board section that issued the notice being petitioned for further investigation and comment, but any findings resulting from such referral are tentative and subject to review by the assigned section. The assigned section shall promptly notify the taxpayer of such a referral, provide assistance needed to complete the investigation, monitor the progress of the Board section to which the petition is referred, and respond to the taxpayer's requests for updates regarding such progress.(c) Scope of Review. The assigned section must look for consistency, adequacy of procedures, proper application of law, and consideration of any recent law changes or Board Memorandum Opinions that may affect the audit or investigation findings, where appropriate.(d) Notice of Findings. Upon completion of the review, the assigned section must advise the taxpayer of its findings in writing.(e) All Findings are in Taxpayer's Favor. Where the findings of the assigned section are that all matters put into dispute by the petition should be resolved in the taxpayer's favor, the assigned section will send the taxpayer a letter notifying the taxpayer of the assigned section's findings and advising that the appeal will be resolved in accordance with those findings, subject to Chief Deputy Director approval if applicable, unless, within 30 days of the date of that letter, the taxpayer advises the assigned section that its findings do not resolve all matters and that there does remain some matter in dispute. If the taxpayer responds within 30 days advising the assigned section that there does remain a dispute, the assigned section will consider the remaining dispute. (1) If the assigned section concludes that the dispute should be resolved in the taxpayer's favor, it will so notify the taxpayer, and the appeal will be resolved in accordance with the assigned section's findings, subject to Chief Deputy Director approval.(2) If the assigned section finds that the remaining dispute should not be resolved in the taxpayer's favor, the provisions of the next subdivision are applicable.(f) Any Finding is Not in Taxpayer's Favor. (1) Where the findings of the assigned section are that some or all of the matters put into dispute by the petition should not be resolved in the taxpayer's favor and the taxpayer has not previously requested a Board hearing or appeals conference, the assigned section will send the taxpayer a letter notifying the taxpayer of the assigned section's findings and advising that the appeal will be resolved in accordance with those findings, subject to Chief Deputy Director approval if applicable, unless, within 30 days of the date of that letter, the taxpayer makes a written request to the assigned section for an appeals conference or Board hearing. If the taxpayer submits a written request within 30 days for an appeals conference or Board hearing, the appeal will be forwarded to the Board Proceedings Division for the scheduling of an appeals conference; otherwise, the appeal will be resolved in accordance with the assigned section's findings as stated in its letter to the taxpayer, subject to Chief Deputy Director approval if applicable.(2) Where the findings of the assigned section are that some or all of the matters put into dispute by the petition should not be resolved in the taxpayer's favor and the taxpayer has previously requested an appeals conference or Board hearing, then the assigned section will send a letter to the taxpayer either advising the taxpayer that the petition will be forwarded to the Board Proceedings Division for the scheduling of an appeals conference, or requesting the taxpayer to confirm its prior request for an appeals conference or Board hearing. (A) Reasons for asking for confirmation include that the taxpayer failed to respond to requests for additional supporting information or documentation, or that the assigned section believes that the taxpayer accepts its findings.(B) If the assigned section asks the taxpayer to confirm its prior request, then the assigned section will state the reason it is asking for confirmation, and will also explain that, unless the taxpayer confirms in writing to the assigned section within 30 days of the date of the letter from the assigned section that the taxpayer still wants an appeals conference or Board hearing, the taxpayer's petition will be resolved in accordance with the findings of the assigned section as stated in its letter, subject to Chief Deputy Director approval if applicable.(C) If the taxpayer confirms in writing within 30 days of the date of the letter from the assigned section that the taxpayer still wants an appeals conference or Board hearing, the petition will be forwarded to the Board Proceedings Division for the scheduling of an appeals conference; otherwise, the appeal will be resolved in accordance with the assigned section's findings as stated in its letter to the taxpayer, subject to Chief Deputy Director approval if applicable.(g) Chief Deputy Director Approval. Where the findings of the assigned section are that an appeal should be granted in whole or in part and that tax and penalty in excess of $100,000 should be refunded, credited, or canceled or that a fraud or evasion penalty in any amount should be canceled, the assigned section's findings shall be submitted to the Chief Deputy Director of the assigned section's Department for approval. At such time, the Chief Deputy Director may approve the assigned section's findings or exercise discretion to make the Chief Deputy Director's own findings as to whether the appeal should be granted, denied, or granted in part and denied in part, and may do so without further documentation or testimony from the taxpayer. (1) If the Chief Deputy Director approves the assigned section's findings, then the appeal will be resolved in accordance with the assigned section's findings.(2) If the Chief Deputy Director makes his or her own findings, then the Chief Deputy Director will send the taxpayer a letter notifying the taxpayer of the findings. If the result of the Chief Deputy Director's findings will be more favorable to the taxpayer than the result based on the findings of the assigned section, then the Chief Deputy Director's letter shall advise the taxpayer that the appeal will be resolved in accordance with the Chief Deputy Director's findings. However, if the Chief Deputy Director changes a finding that was in favor of a taxpayer to a finding that is not in favor of the taxpayer, then: (A) The letter shall advise the taxpayer that the appeal will be resolved in accordance with the Chief Deputy Director's findings, unless the taxpayer requests an appeals conference or Board hearing within 30 days of the date of the letter; and(B) If the taxpayer thereafter timely requests an appeals conference or Board hearing, the Board Proceedings Division will schedule an appeals conference; otherwise, the appeal will be resolved in accordance with the Chief Deputy Director's findings.(h) If the assigned section's findings are not subject to Chief Deputy Director approval, but the Chief Deputy Director of the Department that issued the notice of determination or notice of deficiency assessment concludes that the findings of the assigned section are in error, he or she may revise the findings at any time prior to the date the taxpayer's Notice of Redetermination becomes final, and, if so, must send the taxpayer a letter advising the taxpayer accordingly. If a Chief Deputy Director changes a finding that was in favor of a taxpayer to a finding that is not in favor of the taxpayer, his or her letter to the taxpayer advising of the change will also advise that, unless the taxpayer makes a written request for an appeals conference or Board hearing within 30 days of the date of the letter, the taxpayer's appeal will be resolved in accordance with the change.Cal. Code Regs. Tit. 18, § 5218
1. New section filed 1-7-2008; operative 2-6-2008 (Register 2008, No. 2).
2. Amendment filed 2-25-2014; operative 4-1-2014 (Register 2014, No. 9).
3. Amendment filed 2-3-2016; operative 3-1-2016 pursuant to Government Code section 11343.4(b)(3) (Register 2016, No. 6).
4. Amendment of NOTE filed 3-19-2018 as an emergency; operative 3-19-2018 (Register 2018, No. 12). Pursuant to Government Code section 15570.40, this action is a deemed emergency and exempt from OAL review. A Certificate of Compliance must be transmitted to OAL by 9-17-2018 or emergency language will be repealed by operation of law on the following day.
5. Amendment of NOTE refiled 9-17-2018 as an emergency; operative 9-17-2018 (Register 2018, No. 38). Pursuant to Government Code section 15570.40, this action is a deemed emergency and exempt from OAL review. A Certificate of Compliance must be transmitted to OAL by 12-17-2018 or emergency language will be repealed by operation of law on the following day.
6. Amendment of NOTE refiled 12-17-2018 as an emergency; operative 12-17-2018 (Register 2018, No. 51). Pursuant to Government Code section 15570.40, this action is a deemed emergency and exempt from OAL review. A Certificate of Compliance must be transmitted to OAL by 3-18-2019 or emergency language will be repealed by operation of law on the following day.
6. Reinstatement of section as it existed prior to 3-19-2018 emergency amendment by operation of Government Code section 11346.1(f) (Register 2019, No. 12).
7. Amendment of NOTE filed 3-19-2019; operative 3-19-2019. Submitted to OAL for filing and printing only. Exempt from the APA pursuant to Government Code section 15570.40(b) (Register 2019, No. 12).
8. Change without regulatory effect amending section filed 7-30-2020 pursuant to section 100, title 1, California Code of Regulations (Register 2020, No. 31). Note: Authority cited: Section 15606, Government Code; and Sections 13170 and 32451, Revenue and Taxation Code. Reference: Sections 12429 and 32302, Revenue and Taxation Code.
1. New section filed 1-7-2008; operative 2-6-2008 (Register 2008, No. 2).
2. Amendment filed 2-25-2014; operative 4-1-2014 (Register 2014, No. 9).
3. Amendment filed 2-3-2016; operative 3/1/2016 pursuant to Government Code section 11343.4(b)(3) (Register 2016, No. 6).
4. Amendment of Note filed 3-19-2018 as an emergency; operative 3-19-2018 (Register 2018, No. 12). Pursuant to Government Code section 15570.40, this action is a deemed emergency and exempt from OAL review. A Certificate of Compliance must be transmitted to OAL by 9/17/2018 or emergency language will be repealed by operation of law on the following day.
5. Amendment of Note refiled 9-17-2018 as an emergency; operative 9/17/2018 (Register 2018, No. 38). Pursuant to Government Code section 15570.40, this action is a deemed emergency and exempt from OAL review. A Certificate of Compliance must be transmitted to OAL by 12-17-2018 or emergency language will be repealed by operation of law on the following day.
6. Amendment of Note refiled 12-17-2018 as an emergency; operative 12-17-2018 (Register 2018, No. 51). Pursuant to Government Code section 15570.40, this action is a deemed emergency and exempt from OAL review. A Certificate of Compliance must be transmitted to OAL by 3-18-2019 or emergency language will be repealed by operation of law on the following day.
6. Reinstatement of section as it existed prior to 3-19-2018 emergency amendment by operation of Government Code section 11346.1(f) (Register 2019, No. 12).
7. Amendment of Note filed 3-19-2019; operative 3/19/2019. Submitted to OAL for filing and printing only. Exempt from the APA pursuant to Government Code section 15570.40(b) (Register 2019, No. 12).
8. Change without regulatory effect amending section filed 7-30-2020 pursuant to section 100, title 1, California Code of Regulations (Register 2020, No. 31).