ARTICLE 2. Deficiency Determinations [6481. - 6488.]

Cal. Revenue and Taxation Code - RTC 2.

in effect

Cal. Revenue and Taxation Code - RTC § 6481. Section 6481.

If the board is not satisfied with the return or returns of the tax or the amount of tax, or other amount, required to be paid to the state by any person, it may compute and determine the amount required to be paid upon the basis of the facts contained in the return or returns or upon the basis of any information within its possession or that may come into its possession. One or more deficiency determinations may be made of the amount due for one or for more than one period. When a business is discontinued a determination may be made at any time thereafter, within the periods specified in Section 6487, as to liability arising out of that business, irrespective of whether the determination is issued prior to the due date of the liability as otherwise specified in this part.

Cal. Revenue and Taxation Code - RTC § 6482. Section 6482.

The amount of the determination, exclusive of penalties, shall bear interest at the modified adjusted rate per month, or fraction thereof, established pursuant to Section 6591.5, from the last day of the month following the quarterly period for which the amount or any portion thereof should have been returned until the date of payment.

Cal. Revenue and Taxation Code - RTC § 6483. Section 6483.

In making a determination the board may offset overpayments for a period or periods, together with interest on the overpayments, against underpayments for another period or periods, against penalties, and against the interest on the underpayments. The interest on underpayments and overpayments shall be computed in the manner set forth in Sections 6591 and 6907.

Cal. Revenue and Taxation Code - RTC § 6484. Section 6484.

If any part of the deficiency for which a deficiency determination is made is due to negligence or intentional disregard of this part or authorized rules and regulations, a penalty of 10 per cent of the amount of the determination shall be added thereto.

Cal. Revenue and Taxation Code - RTC § 6485. Section 6485.

If any part of the deficiency for which a deficiency determination is made is due to fraud or an intent to evade this part or authorized rules and regulations, a penalty of 25 per cent of the amount of the determination shall be added thereto.

Cal. Revenue and Taxation Code - RTC § 6485.1. Section 6485.1.

Any purchaser of a vehicle, vessel, or aircraft who registers it outside the State of California for the purpose of evading the payment of taxes due under this part shall be liable for a penalty of 50 percent of any tax determined to be due on the sales price of the vehicle, vessel, or aircraft.

Cal. Revenue and Taxation Code - RTC § 6486. Section 6486.

The department shall give to the retailer or person storing, using, or consuming tangible personal property written notice of its determination. The notice shall be served in one of the following manners: (a) By placing the notice in a sealed envelope, with postage paid, addressed to the retailer or person storing, using, or consuming tangible personal property at their address as it appears in the records of the department. Service made pursuant to this subdivision shall be deemed complete at the time of the deposit of the notice in the United States Post Office, or a mailbox, sub-post office, substation, or mail chute, or other facility regularly maintained or provided by the United States Postal Service, without extension of time for any reason. (b) By personally delivering the notice to the person to be served. Service made pursuant to this subdivision is complete at the time of delivery. Personal service to a corporation may be made by delivery of a notice to any person designated in the Code of Civil Procedure to be served for the corporation with summons and complaint in a civil action. (c) (1) By delivering the notice electronically via secure transmission when either of the following applies: (A) The taxpayer requests the notice of determination to be sent electronically via secure transmission. (B) The department has evidence that the taxpayer no longer receives mail at the address of record and has previously provided an address for electronic mail. (2) Service provided pursuant to paragraph (1) shall be deemed complete at the time the department electronically transmits the notice via the taxpayer’s secure web portal, without extension of time for any reason.

Cal. Revenue and Taxation Code - RTC § 6487. Section 6487.

(a) For taxpayers filing returns, other than a return filed pursuant to Section 6452.1, on other than an annual basis, except in the case of fraud, intent to evade this part or authorized rules and regulations, or failure to make a return, every notice of a deficiency determination shall be served within three years after the last day of the calendar month following the quarterly period for which the amount is proposed to be determined or within three years after the return is filed, whichever period expires the later. In the case of failure to make a return, every notice of determination shall be served within eight years after the last day of the calendar month following the quarterly period for which the amount is proposed to be determined. (b) For taxpayers filing returns on an annual basis, except in the case of fraud, intent to evade this part or authorized rules and regulations, or failure to make a return, every notice of a deficiency determination shall be served within three years after the last day of the calendar month following the one-year period for which the amount is proposed to be determined or within three years after the return is filed, whichever period expires the later. In the case of failure to make a return, every notice of determination shall be served within eight years after the last day of the calendar month following the one-year period for which the amount is proposed to be determined. (c) The limitation specified in this section does not apply in case of a sales tax proposed to be determined with respect to sales of property for the storage, use, or other consumption of which notice of a deficiency determination has been or is served pursuant to subdivision (a) or (b) or pursuant to Section 6486, 6515, or 6536. The limitation specified in this section does not apply in case of an amount of use tax proposed to be determined with respect to storage, use, or other consumption of property for the sale of which notice of a deficiency determination has been or is served pursuant to subdivision (a) or (b) or pursuant to Section 6486, 6515, or 6536.

Cal. Revenue and Taxation Code - RTC § 6487.1. Section 6487.1.

In the case of a deficiency arising under this part during the lifetime of a decedent, a notice of deficiency determination shall be served within four months after written request therefor, in the form required by the department, by the fiduciary of the estate or trust or by any other person liable for the tax or any portion thereof.

Cal. Revenue and Taxation Code - RTC § 6487.2. Section 6487.2.

(a) A notice of determination issued pursuant to Section 6486, 6515, or 6536 to an individual who was a general partner, as shown on the department’s records, and who, prior to the period covered by the determination, withdrew from the partnership, causing a change in ownership, and failed to notify the department, shall be served within four years after the last day of the calendar month following the quarterly period in which the change of ownership occurred. (b) An individual who was a general partner, as shown on the department’s records, who withdraws from a partnership without notifying the department of the change in ownership, shall not be liable for any unpaid, self-assessed liability of the partnership that becomes due at least three years after the last day of the calendar month following the quarterly period in which the change in ownership occurred. (c) Subdivisions (a) and (b) shall not apply to either of the following: (1) Cases of fraud or intent to evade this part or other administrative or interpretive regulations. (2) Any partners who retain an ownership interest in a corporation that is a successor to the partnership. (d) For purposes of this part, change in ownership means that a new “person,” as defined in Section 6005, is created by the action of the former owner by means of a sale, an incorporation, an addition or elimination of one or more partners, or the termination of a spouse’s ownership or community property interest due to legal separation or divorce. (e) For purposes of this section, “individual” includes only natural persons.

Cal. Revenue and Taxation Code - RTC § 6487.3. Section 6487.3.

(a) (1) For persons that elect to report qualified use tax in accordance with Section 6452.1, except in the case of fraud, intent to avoid this part or authorized rules and regulations issued by the department, or the gross understatement of qualified use taxes, every notice of a deficiency determination with respect to the qualified use tax shall be served within three years after the last day for which an acceptable tax return is due or filed, whichever occurs later. (2) In the case of a gross understatement of qualified use tax, every notice of a deficiency determination with respect to the qualified use tax shall be served within six years after the last day for which an acceptable tax return is due or filed, whichever occurs later. (3) For purposes of this subdivision, a “gross understatement of qualified use tax” is a deficiency that is in excess of 25 percent of the amount of qualified use tax reported on a person’s acceptable tax return. In the case of married individuals filing separate California personal income tax returns, the total amount of qualified use tax reported will be considered in determining whether there is a gross understatement of qualified use tax. (4) For purposes of this section, “acceptable tax return” means a timely filed original return that is filed pursuant to Article 1 (commencing with Section 18501), Article 2 (commencing with Section 18601), Section 18633, Section 18633.5 of Chapter 2 (commencing with Section 18501) of Part 10.2, or Article 3 (commencing with Section 23771) of Chapter 4 of Part 11. (b) This section applies to reporting of purchases of tangible personal property made on or after January 1, 2010, in taxable years beginning on or after January 1, 2010.

Cal. Revenue and Taxation Code - RTC § 6487.05. Section 6487.05.

(a) Notwithstanding Section 6487, the period during which a deficiency determination may be served to a qualifying retailer is limited to three years after the last day of the calendar month following the quarterly period for which the amount is proposed to be determined. For purposes of this section, a “qualifying retailer” is a retailer that meets all of the following conditions: (1) The retailer is located outside this state, and has not previously registered with the department. (2) The retailer is engaged in business in this state, as defined in Section 6203. (3) The retailer voluntarily registers with the department. (4) The retailer has not been previously contacted by the department or its agents regarding the provisions of Section 6203. (5) As determined by the department, the retailer’s failure to file a return or failure to report or pay the tax or amount due required by law was due to reasonable cause and was not a result of negligence or intentional disregard of the law, or because of fraud or an intent to evade the provisions of this part. (b) If the department or its designee finds that the retailer’s failure to make a timely return or payment is due to reasonable cause and circumstances beyond the retailer’s control, and occurred notwithstanding the exercise of ordinary care and the absence of willful neglect, the retailer shall be relieved of the penalties imposed pursuant to this part. Any retailer seeking relief of penalty shall file a statement under penalty of perjury setting forth the facts upon which they base their claim for relief.

Cal. Revenue and Taxation Code - RTC § 6487.06. Section 6487.06.

(a) Notwithstanding Section 6487, the period during which a deficiency determination may be served to a qualifying purchaser is limited to three years after the last day of the calendar month following the quarterly period for which the amount is proposed to be determined. (b) For purposes of this section, a “qualifying purchaser” is a person that voluntarily files an individual use tax return for tangible personal property that is purchased from a retailer outside of this state for storage, use, or other consumption in this state, and that meets all of the following conditions: (1) The purchaser resides or is located within this state and has not previously done any of the following: (A) Registered with the department. (B) Filed an individual use tax return with the department. (C) Reported an amount on their individual California income tax return. (2) The purchaser is not engaged in business in this state as a retailer, as defined in Section 6015. (3) The purchaser has not been contacted by the department regarding failure to report the use tax imposed by Section 6202. (4) The department has made a determination that the purchaser’s failure to file an individual use tax return or to otherwise report or pay the use tax imposed by Section 6202 was due to reasonable cause and was not caused by reason of negligence, intentional disregard of the law, or by an intent to evade the taxes imposed by this part. (c) If the department makes a determination that the purchaser’s failure to timely report or remit the taxes imposed by this part is due to reasonable cause or due to circumstances beyond the purchaser’s control, the purchaser may be relieved of any penalties imposed by this part. Any purchaser seeking relief from penalties imposed by this part shall file a statement, signed under penalty of perjury, setting forth the facts that form the basis for the claim for relief. (d) This section shall not apply to purchases of vehicles, vessels, or aircraft as defined in Article 1 (commencing with Section 6271) of Chapter 3.5.

Cal. Revenue and Taxation Code - RTC § 6487.07. Section 6487.07.

(a) Notwithstanding Section 6487, a deficiency determination may be issued to a qualifying retailer only for those liabilities arising under this part for sales made on and after April 1, 2016. (b) For purposes of this section, a “qualifying retailer” is a retailer that meets all of the following conditions: (1) The retailer is not registered or has not registered with the department under this part prior to December 1, 2018. (2) The retailer had not filed sales or use tax returns or made sales or use tax payments prior to being contacted by the department. (3) The retailer voluntarily registers under Chapter 2 (commencing with Section 6051) or Chapter 3 (commencing with Section 6201), as applicable, files completed tax returns for all tax reporting periods for which a determination may be issued under this section, within 90 days after the effective date of this act, and pays in full the taxes due or applies for an installment agreement, but only if final payment under the terms of that installment payment agreement is paid no later than December 31, 2021. (4) The retailer is or was engaged in business in this state solely because the retailer used a marketplace facilitator, as defined in Section 6041, to facilitate sales for delivery in this state and the marketplace facilitator stored the retailer’s inventory in this state. (c) A qualifying retailer shall be relieved of the penalties imposed pursuant to this part with respect to sales made from April 1, 2016, to March 31, 2019, inclusive.

Cal. Revenue and Taxation Code - RTC § 6488. Section 6488.

If before the expiration of the time prescribed in Section 6487 for serving a notice of deficiency determination the taxpayer has consented in writing to service of the notice after such time, the notice may be served at any time prior to the expiration of the period agreed upon. The period so agreed upon may be extended by subsequent agreements in writing made before the expiration of the period previously agreed upon.

Source: CA Legislative Counsel Bulk DataURL: https://downloads.leginfo.legislature.ca.gov/pubinfo_2025.zipFetched: 6/27/2026