Article 1. Administration of California Revenue And Taxation Code >> Division 2. >> Part 13. >> Chapter 8. >> Article 1.

The board shall enforce the provisions of this part and may prescribe, adopt, and enforce rules and regulations relating to the administration and enforcement of this part. The board may prescribe the extent to which any ruling or regulation shall be applied without retroactive effect.

The board may employ accountants, auditors, investigators, assistants, and clerks necessary for the efficient administration of this part and may designate representatives to conduct hearings, or perform any other duties imposed by this part or other laws of this State upon the board.

Every distributor and every person dealing in, transporting, or storing cigarettes or tobacco products in this state shall keep such records, receipts, invoices, and other pertinent papers with respect thereto in such form as the board may require.

The board or its authorized representative may make such examinations of the books, papers, records, and equipment of any person dealing in, transporting, or storing cigarettes or tobacco products and such other investigations as it may deem necessary in carrying out the provisions of this part. In addition to any other reports required under this part, the board may, by rule or otherwise, require additional, other, or supplemental reports from licensed distributors, dealers, transporters, common and private carriers, warehousemen, bailees, and other persons, including reports of shipments of cigarettes or tobacco products from a point outside this state to a point within this state, and prescribe the form, including verification, of the information to be given on, and the times for filing of, such additional, other, or supplemental reports.

It is unlawful for the board or any person having an administrative duty under this part to make known in any manner whatever the business affairs, operations, or information obtained by an investigation of records and equipment of any person visited or examined in the discharge of official duty, or the amount or source of income, profits, losses, expenditures, or any particular thereof, set forth or disclosed in any report, or to permit any report or copy thereof or any book containing any abstract or particulars thereof to be seen or examined by any person. However, the Governor may, by general or special order, authorize examination of the records maintained by the board under this part by other state officers, by tax officers of another state, by the federal government, if a reciprocal arrangement exists, or by any other person. Successors, receivers, trustees, executors, administrators, assignees, and guarantors, if directly interested, may be given information as to the items included in the measure and amounts of any unpaid tax or amounts of tax required to be collected, interest, and penalties. Nothing in this section shall prevent the board from exchanging with officials of other states information concerning interstate shipments of cigarettes or tobacco products. Any violation of this section is a misdemeanor and is punishable by a fine not exceeding one thousand dollars ($1,000), by imprisonment not exceeding one year, or by both, in the discretion of the court.

(a) Except as otherwise provided by law, any person who is engaged in the business of preparing, or providing services in connection with the preparation of, returns under Chapter 4 (commencing with Section 30181) of this part, or any person who for compensation prepares any such return for any other person, and who knowingly or recklessly does either of the following, shall be guilty of a misdemeanor, and, upon conviction thereof, shall be fined not more than one thousand dollars ($1,000) or imprisoned no more than one year, or both, together with the costs of prosecution:
  (1) Discloses any information furnished to him or her for, or in connection with, the preparation of the return, or
  (2) Uses that information for any purpose other than to prepare, or assist in preparing, the return.
  (b) Subdivision (a) shall not apply to disclosure of information if that disclosure is made pursuant to the person's consent or pursuant to a subpoena, court order, or other compulsory legal process.

A certificate by the board or an employee of the board stating that a notice required by this part was given by mailing or personal service shall be prima facie evidence in any administrative or judicial proceeding of the fact and regularity of the mailing or personal service in accordance with any requirement of this part for the giving of a notice. Unless otherwise specifically required, any notice provided by this part to be mailed or served may be given either by mailing or by personal service in the manner provided for giving notice of a deficiency determination.

(a) The board shall determine which taxpayer's accounts are eligible for the managed audit program in a manner that is consistent with the efficient use of its auditing resources and the maximum effectiveness of the program.
  (b) A taxpayer is not required to participate in the managed audit program.

A taxpayer's account is eligible for the managed audit program only if the taxpayer meets all of the following criteria:
  (a) The taxpayer's business involves few or no statutory exemptions.
  (b) The taxpayer's business involves a single or a small number of clearly defined taxability issues.
  (c) The taxpayer is taxed pursuant to this part and agrees to participate in the managed audit program.
  (d) The taxpayer has the resources to comply with the managed audit instructions provided by the board.

(a) If the board selects a taxpayer's account for a managed audit, all of the following apply:
  (1) The board shall identify all of the following:
  (A) The audit period covered by the managed audit.
  (B) The types of transactions covered by the managed audit.
  (C) The specific procedures that the taxpayer is to follow in determining any liability.
  (D) The records to be reviewed by the taxpayer.
  (E) The manner in which the types of transactions are to be scheduled for review.
  (F) The time period for completion of the managed audit.
  (G) The time period for the payment of the liability and interest.
  (H) Any other criteria that the board may require for completion of the managed audit.
  (2) The taxpayer shall:
  (A) Examine its books, papers, records, and equipment to determine if it has any unreported tax liability for the audit period.
  (B) Make available to the board for verification all computations and books, papers, records, and equipment examined pursuant to subparagraph (A).
  (b) The information provided by the taxpayer pursuant to paragraph (2) of subdivision (a) is the same information that is required for the completion of any other audit that the board may conduct.

Nothing in this article limits the board's authority to examine the books, papers, records, and equipment of a taxpayer under Section 30454.

Upon completion of the managed audit and verification by the board, interest on any unpaid liability shall be computed at one-half the rate that would otherwise be imposed for liabilities covered by the audit period. Payment of the liabilities and interest shall be made within the time period specified by the board. If the requirements for the managed audit are not satisfied, the board may proceed to examine the records of the taxpayer in a manner to be determined by the board under law.