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Business Taxes Law Guide – Revision 2024
 

California Department of Tax and Fee Administration

Title 18. Public Revenues
Division 5. California Department of Tax and Fee Administration

Chapter 1. Appeals

Article 3. Claims for Refund

Rule 35042

35042. Action on a Claim for Refund.

Reference: Sections 6901, 6902, 6906, 6933, 8126, 8128, 8148, 9151, 9152, 9173, 30176, 30176.1, 30176.2, 30177, 30178, 30178.1, 30361, 30362, 30365, 30403, 38601, 38602, 38605, 38613, 40111, 40112, 40115, 40127, 41100, 41101, 41104, 41110, 43451, 43452, 43454, 43473, 45651, 45652, 45654, 45703, 46501, 46502, 46505, 46523, 50139, 50140, 50142, 50145, 55221, 55222, 55224, 55243, 60501, 60502, 60507, 60521, 60522 and 60543, Revenue and Taxation Code.

(a) The assigned section must review the claim for refund and all other relevant information available to it in reaching findings on behalf of BTFD, subject to the oversight of the Deputy Director.

(b) If the assigned section finds that a claim should be granted in its entirety, subject to subdivision (d), it will:

(1) Mail the taxpayer a notice of refund showing the amount to be refunded; and

(2) Have a refund warrant prepared and sent to the taxpayer after determining if such amounts should be credited or offset against other liabilities as provided in regulation 35044.

(c) If the assigned section finds that a claim for refund should be denied, in whole or in part, it will mail the taxpayer a letter containing its findings and an explanation of those findings. The letter will also advise that the taxpayer’s claim for refund will be resolved in accordance with the assigned section’s findings unless, within 30 days of the date of the letter, the taxpayer submits to the assigned section a written request for an appeals conference.

(1) If the taxpayer submits a written request for an appeals conference within 30 days of the date of the letter and the request is not denied under regulation 35043, the assigned section will prepare a summary analysis which sets forth the taxpayer’s contentions and the reasons BTFD has found that the claim for refund should be denied, in whole or in part. The assigned section will then mail a copy of the summary analysis to the taxpayer and will forward the appeal to the Appeals Bureau for the scheduling of an appeals conference in accordance with article 8 of this chapter.

(2) If the taxpayer does not submit a written request for an appeals conference within 30 days of the date of the letter or if such a request is submitted but denied under regulation 35043, the assigned section will mail the taxpayer a notice of denial of claim for refund denying the claim in whole or in part, as applicable. Where the findings of the assigned section are to grant the claim in part, subject to subdivision (d), it will:

(A) Mail the taxpayer a notice of refund showing the amount to be refunded; and

(B) Have a refund warrant prepared and sent to the taxpayer after determining if such amounts should be credited or offset against other liabilities as provided in regulation 35044.

(d) If the assigned section finds that a refund in excess of $50,000 should be granted, the proposed finding must be available as a public record, if required by law, for at least 10 after the effective date of the determination.

(e) Failure of the taxpayer to commence a court action within 90 days after the mailing of the notice of CDTFA’s Action on a Claim for Refund as provided in the tax law under which the claim was filed constitutes a waiver of any demand against the state on account of alleged overpayments.

History—New regulation filed March 19, 2018, as an emergency; effective and operative March 19, 2018. Regulation refiled September 17, 2018, as an emergency; effective and operative September 17, 2018. Regulation refiled December 17, 2018, as an emergency; effective and operative December 17, 2018. Certificate of Compliance transmitted to OAL on February 20, 2019 and filed March 19, 2019. (The regulation incorporates provisions from regulation 5235 in division 2.1.)

Amended October 27, 2023. Changes without regulatory effect to replace "prior to its effective date" with "after the effective date of the determination" in subdivision (d) and delete the reference to Revenue and Taxation Code section 42020 from the authority note; filed October 27, 2023, pursuant to section 100, title 1, California Code of Regulations (Register 2023, No. 43).

Note.—Authority cited: Sections 15570.40 and 15606, Government Code; Section 25215.74, Health and Safety Code; Sections 7051, 8251, 9251, 30451, 34013, 38701, 40171, 41128, 42103, 43501, 45851, 46601, 50152, 55301 and 60601, Revenue and Taxation Code.