Yes. California state gives you clear, formal paths to challenge Franchise Tax Board findings. Most income tax audits end with a Notice of Proposed Assessment. You generally have 60 days from the notice date to file a written protest. If you pay the proposed amount within 15 days of the Notice of Proposed Assessment date, FTB stops interest on that amount as of the notice date; if you pay later, interest stops as of the payment date while you continue your protest. If the FTB later issues a Notice of Action that you still disagree with, you have 30 days to appeal to the independent Office of Tax Appeals. These timelines are strict, so read every notice carefully and act before the dates shown.
Understand the Notice You Received and the Immediate Deadlines
A Notice of Proposed Assessment explains the proposed changes, penalties, and interest. It is not a bill unless you take no action by the “protest by” date. File a protest within 60 days to keep the matter in the administrative review track. Interest keeps running during the protest. To halt further interest, you may pay the proposed amount within 15 days of the notice and still continue your protest. If the FTB affirms some or all of the adjustments after a protest, it will issue a Notice of Action. At that point, you can file an appeal with the Office of Tax Appeals within 30 days of the Notice of Action date.
How to Build a Strong Protest and What a Review Looks Like
A protest should identify each disputed issue, state the facts, apply California state law, and attach organized support that ties back to your filed return. The FTB Protest Unit assigns a hearing officer who may request documents and hold an informal conference. For residency and sourcing, expect to provide domicile indicators, travel and work location records, and employer documentation. For pass-through owners, be ready with partnership or S corporation workpapers that connect apportionment and basis to your return. If the FTB sustains any part of the assessment, the Notice of Action will tell you what remains in dispute and start the 30-day appeal window at the Office of Tax Appeals. The OTA is independent of the FTB, can hold a hearing or decide on the papers, and applies California statutes and precedent to the record you present.
Missed the Protest Window or Seeking a Refund Instead
If you miss the 60-day protest deadline and the assessment becomes final, you can still pay and file a refund claim. For most individuals, a refund claim is timely if filed within the later of 4 years from the original due date of the return or 1 year from the date of the overpayment. If the IRS later changes your federal taxable income, different timing rules apply for related claims. If your claim is denied or six months pass without action, you can appeal to the OTA or file a refund suit in the superior court within the applicable time limits.
Interest, Penalties, and Settlement or Closing Agreement Options
Interest accrues from the original return due date and compounds daily at the state’s published rate, so running the numbers and paying strategically can reduce carry cost. California state offers a One-Time Penalty Abatement for eligible timeliness penalties if you meet the criteria, and separate reasonable cause relief may be available. For disputed cases, the FTB operates a Settlement Program that resolves protested or appealed matters based on hazards of litigation. The program is different from an Offer in Compromise, which turns on the ability to pay. The FTB also uses closing agreements to resolve specified issues conclusively. These resolution tools can be considered during a protest or appeal where appropriate.
Practical Steps that Improve Outcomes
File a California power of attorney so your representative can communicate directly with the auditor and Protest Unit. Rebuild the schedules an auditor will prepare, reconcile books and bank data to returns, and align California state entries with any federal tax changes. If you are disputing residency or sourcing, assemble contemporaneous proof before you file protest. If you need more time to gather documents, file a timely protest to preserve rights, and then work out a submission schedule with the reviewer. Keep current compliance clean while you contest past years; new delinquencies only complicate the file.
Contact the Tax Law Offices of David W. Klasing if You Disagree with an FTB Audit Result
If you received a Notice of Proposed Assessment or a Notice of Action and you disagree, we move quickly to preserve every right you have. Our matters are attorney-led, and our CPAs are employees of the Tax Law Offices of David W. Klasing, working under attorney direction as part of the legal team. From the first call, we calendar the exact protest or appeal deadlines, file your California power of attorney, and take over communications so the dispute stays focused on the issues that actually matter.
Our dual-licensed FTB audit Attorneys & CPAs at the Tax Law Offices of David W. Klasing build the record reviewers, and the Office of Tax Appeals will credit. That means reconstructing examiner-grade schedules, reconciling books and bank data to filed returns, and aligning California entries with any federal changes so your file tells one coherent story. For residency and sourcing, we prepare detailed timelines, domicile and work location proof, and clean reconciliations to Schedule CA or Schedule R, as applicable. For pass-through owners, we document basis, apportionment, and credit computations back to partnership or S corporation workpapers. Where it fits the facts, we pursue the FTB Settlement Program or a closing agreement based on a realistic analysis of the litigation risks. To control carrying costs while you contest, we advise on targeted remittances that stop interest on the amounts you choose to place on account.
If the case does not resolve at the protest, we prepare and file a timely OTA appeal, select the best hearing format for your facts, and present a well-supported record ready for decision. If you are already past the protest window, we pivot to the refund route and file a claim within the correct statute, coordinating any payment so interest stops while your claim is considered. If collections have started, we stabilize the file, address liens and levies, and secure a workable payment plan so enforcement does not drive the outcome. To speak confidentially with our dual-licensed California Tax Attorneys and CPAs, call 800-681-1295 or book a reduced-rate initial consultation with the Tax Law Offices of David W. Klasing today HERE.
