Effectively Managing State Income Tax Examinations, Protests, and Appeals

This webinar will provide tax practitioners with a practical roadmap for navigating state income tax examinations, protests, and appeals from initial audit contact through final resolution. Our panel of experienced tax controversy attorneys will draw on real world audit and appeals experience to explain how state tax authorities develop issues, evaluate evidence, and resolve disputes—highlighting California procedures while emphasizing strategies that apply nationwide.

State revenue departments continue to increase examination activity and rely heavily on information sharing with the IRS and other states. Differences in statutes of limitations, protest deadlines, procedural rules, and appeal forums can create significant risks if not managed promptly and strategically. 

California, for example, differs from many states in several critical respects that materially heighten audit risk. The FTB generally has four years to assess additional tax, compared to the IRS' three-year period. The statute can remain open indefinitely if a required return was not filed or if a taxpayer fails to report federal audit changes within six months of the final determination. This extended exposure is compounded by California's top marginal income tax rate of 12.3%, plus the 1% Mental Health Services Tax on income over $1 million, making even modest audit adjustments economically significant.

Listen as our panel of seasoned state tax controversy attorneys discusses how to manage examinations, identify when to escalate matters to protest or appeal, and improve outcomes during state income tax controversies.