The California Department of Tax and Fee Administration (CDTFA) offers many free resources to simplify tax laws for their taxpayers. Unfortunately, those who can greatly benefit from those resources may not be aware they exist.

Publications

As a former tax collector and auditor, I regularly encountered taxpayers who could have easily prevented their tax issues. Sometimes business owners neglected to research applicable tax laws and regulations, which were the common reasons for their audit liability. One example of this is restaurants with mandatory tips but does not charge tax on the mandatory tip. Pre-pandemic, I noted several restaurants that failed to tax their mandatory tips and could easily have several hundred thousand dollars in audit liability (after penalty and interest) in a three-year audit period. The CDTFA has industry (cannabis, drop shipment, NPOs, restaurant, etc.) and topic (collection procedures, audit, etc.) specific publications that plainly explains tax laws and regulations. Had those restaurants reviewed the Publication 22: Dining and Beverage Industry, they could have easily prevented their tax exposure.

Seminars

If reading about sales and use taxes is not your hobby, the CDTFA also offers in-person and virtual seminars. Some of the topics and industries covered includes basic sales and use tax, sales tax return preparation, record-keeping, internet and home-based businesses, food industry, auto repair shops, and constructions contractors. With all this information readily available, in different medias, the business, bookkeeper, or their tax professional should be adequately informed.

Get it in Writing

If you already understand the common laws and regulations applicable to your business, but have a more complicated question, consider reviewing Form CDTFA-8: Get it in Writing. This form explains the procedure to request written advice on a specific tax question. This service is free, and the business can be relieved of tax liability if they relied on the written advice. Having written responses to these requests, the tax advice is thoroughly researched and approved by management.  

For most, a tax liability is an unwelcomed surprise. SoCal Tax Shield offers accounting services that integrates controls aimed at preventing unwanted tax surprises.

Schedule a free consultation today.