“Relief” is an umbrella term for statutory and administrative tools that can reduce, defer, or resolve California sales and use tax liabilities administered by the California Department of Tax and Fee Administration (CDTFA). Depending on your facts, relief may include penalty abatement for reasonable cause, interest relief in defined circumstances (disaster or agency error), interest cut by one-half under a Managed Audit Program (MAP), shortened look-back and penalty relief via Voluntary Disclosure, installment payment agreements, offers in compromise for truly uncollectible debts, and spousal relief in qualifying cases. None of these programs erase liability merely because it’s inconvenient; each requires you to fit precise statutory criteria and provide credible documentation.
Core California State Relief Mechanisms (What’s Available and When)
Penalty Relief for Reasonable Cause (RTC § 6592)
If a late return or payment was due to reasonable cause and circumstances beyond your control, and not willful neglect, CDTFA may relieve penalties (you still owe tax and interest). Requests are made online or on CDTFA-735, accompanied by a declaration under penalty of perjury.
Disaster Relief (RTC § 6593)
When filing or payment delays are caused by a disaster (for example, a wildfire or flood), the CDTFA can relieve interest and penalties for the affected periods. CDTFA publishes event-specific guidance and accepts online disaster relief requests.
Interest Relief for Agency Error or Delay (RTC § 6593.5)
CDTFA may relieve interest where a failure to pay was due in whole or in part to unreasonable error or delay by the department or another state agency, not the taxpayer.
Reliance on Written Advice (RTC § 6596)
If you requested and received written advice from CDTFA (formerly BOE) for your specific facts, and you reasonably relied on that advice, CDTFA can relieve tax, penalties, and interest for the period covered. Strict conditions apply (the advice must be for you, on your facts, requested in writing, and retained in your records).
Managed Audit Program—Half-Interest (RTC §§ 7076–7076.4)
For eligible businesses (with few or no exemptions; limited, clearly defined issues), the CDTFA may offer a Managed Audit, where you perform agreed-upon procedures under auditor oversight. If you timely complete and CDTFA verifies the work, interest on any uncovered liability is computed at one-half the normal rate. Participation is voluntary, and CDTFA retains authority to examine records.
Voluntary Disclosure Programs (In-State and Out-of-State)
Unregistered sellers who come forward before being contacted can limit the look-back period for use tax to three years (versus up to eight) and obtain penalty relief. CDTFA allows applicants to discuss facts, even anonymously, to gauge eligibility. (Economic nexus rules still apply; these programs are for previously non-registered sellers.)
Installment Payment Agreements (RTC § 6832)
If you cannot pay in full, the CDTFA can approve a payment plan, allowing you to amortize the tax, interest, and any remaining penalties over time. You remain responsible for accruing interest until paid.
Offer in Compromise (OIC)
When a final, undisputed liability is truly uncollectible, CDTFA may accept less than the full amount, for individuals, closed businesses, and (through January 1, 2028) certain active businesses that meet statutory criteria. OICs require full financial disclosure and are granted only when CDTFA concludes it cannot collect more now or in the foreseeable future.
Spousal Relief
A divorced/separated spouse or registered domestic partner may request innocent spouse relief from sales/use tax liabilities under CDTFA rules.
How to Request Relief (Portal & Forms)
CDTFA centralizes relief from penalty, interest (where authorized), disaster relief, return extensions, and CRF requests in its online services; CDTFA-735 remains available if you cannot file online.
Where Relief Helps and Where it Doesn’t
Relief works best when facts are well-documented and fit a specific statute, such as wildfire-driven closure (RTC § 6593), staffing/medical emergencies supporting reasonable cause (RTC § 6592), or a clean, managed audit that earns the half-interest benefit for defined errors. Voluntary disclosure can dramatically reduce look-back and penalties for unregistered sellers, but only if you come forward before CDTFA contacts you. None of these programs will shield willful tax evasion; in examinations that reveal suppression devices or skimming, a civil case can present an eggshell or reverse-eggshell risk and must be handled under attorney client privilege.
Contact the Tax Law Offices of David W. Klasing if You Need California Sales and Use Tax Relief
If you’re facing penalties, accruing interest, an audit assessment, or past-due balances, the window to secure statutory relief can be short, and any misstep can be costly and life-altering. At the Tax Law Offices of David W. Klasing, our dual-licensed Civil and Criminal Tax Defense Attorneys & CPAs will quickly determine which CDTFA relief tools fit your facts, position your request within the law, and protect you with privilege—including Kovel engagements where appropriate.
Do not default to your original preparer to “explain” the numbers in a high-risk scenario. Communications with a non-lawyer preparer are not protected in criminal tax matters and can be compelled. By engaging our dual-licensed Civil and Criminal Tax Defense Attorneys & CPAs, strategy and analytics occur under the attorney-client and work-product protections; where specialized accounting is needed, we retain CPAs under a Kovel arrangement to preserve privilege. Call the Tax Law Offices of David W. Klasing today at (800) 681-1295 or contact us online HERE for a reduced-rate initial appointment.
