Article 1. General Provisions of California Revenue And Taxation Code >> Division 2. >> Part 24. >> Chapter 6. >> Article 1.

The board shall enforce this part and may prescribe, adopt, and enforce rules and regulations relating to the administration and enforcement of this part.

Every feepayer shall keep such records, receipts, invoices, and other pertinent papers in such form as the board may require.

The board may make such examinations of the books and records of any feepayer as it may determine to be necessary in carrying out this part.

The board may employ accountants, auditors, investigators, and other expert and clerical assistance necessary to enforce its powers and perform its duties under this part.

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) 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 3 (commencing with Section 46151), 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.
  (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) The board shall determine which feepayer'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 feepayer is not required to participate in the managed audit program.

A feepayer's account is eligible for the managed audit program only if the feepayer meets all of the following criteria:
  (a) The feepayer's business or activities involve few or no statutory exemptions.
  (b) The feepayer's business or activities involve a single or a small number of clearly defined taxability or liability issues.
  (c) The feepayer is subject to the fee imposed pursuant to Section 8670.40 or Section 8670.48 of the Government Code and agrees to participate in the managed audit program.
  (d) The feepayer has the resources to comply with the managed audit instructions provided by the board.

(a) If the board selects a feepayer'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 or activities covered by the managed audit.
  (C) The specific procedures that the feepayer is to follow in determining any liability.
  (D) The records to be reviewed by the feepayer.
  (E) The manner in which the types of transactions or activities 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 feepayer shall:
  (A) Examine its books and records to determine if it has any unreported liability for the audit period.
  (B) Make available to the board for verification all computations and books and records examined pursuant to subparagraph (A).
  (b) The information provided by the feepayer 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 and records of a feepayer under Section 46603.

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 feepayer in a manner to be determined by the board under law.