Office Of Tax Appeals FAQs

What is the Office of Tax Appeals?

The Office of Tax Appeals (OTA) was established on July 1, 2017 by the Taxpayer Transparency and Fairness Act of 2017.  Beginning January 1, 2018, the OTA will start conducting appeals hearings for various taxes and fees administered by the California Department of Tax and Fee Administration, and for appeals of state personal income taxes and corporate franchise and income taxes, which are administered by the Franchise Tax Board. Appeals for these various taxes and fees were previously heard by the State Board of Equalization.

After January 1, 2018, the Board of Equalization will only hear appeals on property taxes, excise taxes on alcohol, and insurance taxes.

Does this change the appeal rights for taxpayers?

No. Taxpayers continue to have the right to have their appeals heard on the merits of law, may present their own evidence, choose their own representative, and have a three judge panel of administrative law judges (ALJs) decide their appeal. The ALJs will issue a written opinion for each appeal decided.

What recourse is available if a taxpayer disagrees with OTA panel’s decision?

A taxpayer who disagrees with the OTA panel’s decision may bring an action in California Superior Court for a trial de novo. Generally, a taxpayer must first pay any tax amounts owed before bringing the action, but there are some exceptions.

Who does the OTA report to?

The OTA is completely separate from and totally independent of any state taxing authority.  The OTA is does not report to an agency, and only reports to the Governor. The Director, Chief Deputy Director and Chief Counsel are appointed by the Governor.

If the Board of Equalization is not hearing my case, who will?

Each case will be heard by a panel of three administrative law judges (ALJs). Every panel in the Office of Tax Appeals will include three ALJs who, in additional to being licensed California attorneys, must meet all of the other legal and professional experience requirements for the job. The ALJs are civil service employees.

Where do the hearings take place?

Hearings will be held in the Sacramento, Fresno and Los Angeles regions.

Is there a form a taxpayer must use to file an appeal?

While the OTA may design a form for use in the future, currently all taxpayers need to do is submit a written request for a hearing with the OTA. Since the OTA is an independent body, taxpayers also need to make sure to supply any supporting documentation, including copies of their tax returns.

Do taxpayers still owe interest in tax appeals cases?

Interest will accumulate on any unpaid tax amounts. The taxpayer may choose to pay the tax before the appeal is heard.

Are hearings open to the public?

Yes, but the OTA will establish a process for the taxpayer to request a closed hearing.

Must taxpayers use attorneys or paid representatives?

No. Taxpayers can choose to represent themselves or be represented by any authorized person or persons, at least 18 years of age, of the person’s choosing, including, but not limited to, an attorney, appraiser, certified public accountant, public accountant, bookkeeper, employee, business associate or any other person.

The Board of Equalization employed its own taxpayer advocate will the OTA have its own?

No, but the OTA staff will include an ombudsperson who can, among other things, provide information to the  taxpayers about the OTA’s appeals process, provide educational materials/publications and answer procedural questions about the appeals process, and connect taxpayers to other state entities who may further assist them, if the situation warrants.  The ombudsperson will not provide legal advice or assistance to taxpayers.

If the BOE granted an extension to a taxpayer’s appeal, or deferred it for further evidence collection, can it still be heard by the Board of Equalization after January 1?

No, unless the tax and fee that is the subject of the appeal is constitutionally administered by the Board of Equalization (property taxes, excise taxes on alcohol, and insurance taxes). Beginning January 1, 2018, all other pending appeals will be heard by the OTA.

What about taxpayers facing hardships?

If a taxpayer is facing financial hardship, they have several options without filing an appeal.  Franchise Tax Board (FTB) and California Department of Tax and Fee Administration (CDTFA) have settlement and offer in compromise programs that allow for taxpayers in certain circumstances to pay a lower amount than originally owed.  FTB and CDTFA also offer flexible installment payment options for individual and business taxpayers.