Audit determined fraud to avoid sales and use tax

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Audit determined fraud to avoid sales and use tax

If, in the course of an audit of your business, the auditor determines that you have a tax deficiency (i.e. you owe additional tax) and that any part of it was due to your fraud or that you intended to evade the Sales and Use Tax laws, then a 25% penalty of the deficiency applies. See Rev. & Tax. Code Section 6485.