California state runs tax disputes through agency-specific steps that, for most income and sales tax cases, eventually end at the independent Office of Tax Appeals. The exact path depends on which agency issued the notice. For Franchise Tax Board income tax, a proposed assessment is protested at FTB first, then appealed to the Office of Tax Appeals if needed. For sales and use tax, you first petition the California Department of Tax and Fee Administration, and then your appeal moves to the Office of Tax Appeals. For employment taxes, appeals go to the California Unemployment Insurance Appeals Board, not the Office of Tax Appeals. Knowing where you are on each timeline is critical because California law sets short, jurisdictional deadlines at every step.
FTB and CDTFA Timelines, Forums, and What Each Deadline Actually Means
For FTB income tax, most audits end with a Notice of Proposed Assessment. You generally have 60 days from the notice date to file a written protest with FTB. If FTB later issues a Notice of Action that you still dispute, you generally have 30 days to appeal to the Office of Tax Appeals. Refund claims follow a parallel but slightly different set of rules. If FTB denies a timely claim for refund, you generally have 90 days to appeal the denial to the Office of Tax Appeals. These timeframes are stated in FTB’s official guidance and mirror the governing statutes. Paying within 15 days of the Notice of Proposed Assessment date stops interest on the paid amount as of the notice date while you continue the protest. Paying later stops interest as of the payment date.
For CDTFA sales and use tax, a Notice of Determination starts a 30-day window to file a petition for redetermination with CDTFA. Cases then move through CDTFA’s Appeals Bureau. If not resolved there, the appeal goes to the Office of Tax Appeals for a hearing and decision. CDTFA’s public appeals page outlines this sequence and emphasizes the petition deadline.
Employment tax has a different forum. If the Employment Development Department issues a Notice of Assessment and you disagree, you generally file a Petition for Reassessment with the California Unemployment Insurance Appeals Board, not the Office of Tax Appeals. The agency’s own decisions and materials reflect this petition process.
What Happens at the Office of Tax Appeals: Procedure, Burden of Proof, and Hearings
The Office of Tax Appeals is an independent tribunal created by statute, with headquarters in Sacramento and hearing locations in Sacramento, Los Angeles, and Fresno. It also conducts video hearings statewide. OTA publishes its own rules of practice and describes allowable hearing formats, representation, and the general flow from scheduling to decision.
At OTA, taxpayers usually bear the burden of showing that FTB or CDTFA erred by a preponderance of the evidence. OTAs’ published opinions and regulations apply this standard and explain how documentary and testimonial proof is weighed against the agency’s determinations. Prehearing procedures require a timely exchange of exhibits and witness lists, and the panel can decide a case on the briefs or after oral hearing. OTA designates some opinions as precedential and publishes both precedential and nonprecedential opinions on its website.
Judicial review is available after an OTA decision, consistent with the law imposing the tax and general California administrative review principles.
Interest, Penalties, and How to Control Additions While You Contest the Case
Interest accrues from the original return due date and compounds daily. You can reduce interest charges by making targeted remittances while you protest or appeal. As noted above, for FTB proposed assessments, a payment within 15 days of the Notice of Proposed Assessment date stops interest on that amount as of the notice date. Later payments stop interest on the date received.
California also offers One-Time Penalty Abatement for specific timeliness penalties, subject to eligibility criteria. Separate reasonable cause penalty relief may apply on a proper showing. FTB’s Collection Procedure Manual describes limited interest abatement for unreasonable error or delay by FTB personnel while performing specific duties, and related interest relief provisions. These interest abatements are narrow and require specific factual showings.
If a federal change affects California tax, reporting the final federal change to FTB within six months is required in most situations. California’s rule aligns state timetables with the federal result and can open a defined window for state assessment or refund on the changed items. FTB’s manual summarizes these six-month reporting obligations and related timelines.
Resolution Paths Short of a Final Decision: Protests, Settlements, and Closing Agreements
Most FTB disputes begin and often end at the protest stage. This is your chance to supply missing documents, correct math, and present focused legal analysis before anything reaches OTA. For protested or appealed cases that will not settle on the numbers alone, FTB operates a Settlement Program that resolves cases based on hazards of litigation. CDTFA uses its own Appeals Bureau process to frame issues before OTA and also employs settlement tools for appropriate files. Using the correct program at the right time often produces a better net outcome than litigating everything to a decision.
Practical Playbook that Improves Outcomes Across Agencies
File the protest or petition on time, even if your evidentiary package is not complete, then work out a submission schedule with the reviewer. Rebuild the schedules an examiner will rely on, reconcile your books, bank, brokerage, merchant, and payroll records to the filed return, and keep California entries consistent with any finalized federal changes. Use targeted remittances to stop interest on amounts you are confident will remain due. If your appeal heads to OTA, meet the prehearing exchange deadlines and decide early whether you want a live hearing or a decision on the papers. If your matter is a CDTFA case, preserve exemption and sampling issues at the agency level so they are clean for OTA review. If your matter is an EDD case, route it to the California Unemployment Insurance Appeals Board and follow that Board’s briefing and hearing procedures, since OTA does not hear EDD appeals.
Contact the Tax Law Offices of David W. Klasing about Appealing a California Tax Case
When you plan an appeal, the first decision is not what to argue, but where and when to do it. At the Tax Law Offices of David W. Klasing, our team starts by mapping your file’s exact posture and deadlines, then selecting the route that best fits your facts, whether that is a focused FTB protest, an OTA appeal, or positioning for a settlement based on hazards of litigation. From day one, we rebuild the examiner grade schedules the reviewer will rely on, align the math to your books and bank data, and package the evidentiary record so it is easy for the state to follow and hard to pick apart at a hearing.
We treat California tax appeals as litigation projects that turn on a clean record and credible narrative. Our attorneys appear before the Office of Tax Appeals and track how panels are deciding current issues, which lets us brief the controlling authority and anticipate the questions you will face. That approach is equally helpful in CDTFA and EDD matters, where sampling, projections, worker status, or sourcing often drive outcomes and must be challenged with facts, not adjectives.
You also get a single, integrated team. At the Tax Law Offices of David W. Klasing, your matter is handled by dual-licensed professionals who are both attorneys and CPAs, with additional in-house CPA support. That structure means the people crafting your legal arguments are the same people building the schedules, reconciliation workpapers, and interest models that decide dollars. It also lets us move quickly without passing work back and forth between separate firms, and it keeps you working with one lead crew from protest through resolution. We offer a reduced-rate initial consultation to triage your situation and set a plan.
If you are weighing an appeal or already have a Notice of Action in hand, we will stabilize the file, pick the forum deliberately, and execute a plan that controls interest, protects your rights, and maximizes your chance of a favorable outcome. Reach out to the Tax Law Offices of David W. Klasing at 800-681-1295, or book a confidential, reduced-rate initial consultation online HERE, and we will get your calendar under control and your record in shape for a decision.
