California OTA Reduces Taxable Measure for Taxpayer’s Smoke Shop (Corrected)

The California Office of Tax Appeals (OTA) issued a decision, reducing the taxable measure of unreported sales for the taxpayer’s Smoke Shop by $38,585, from $534,613 to $496,028, for the period July 1, 2016 through June 30, 2019, in accordance with a reaudit conducted by the California Department of Tax and Fee Administration (CDTFA). On appeal from the taxpayer, the OTA found that the CDTFA properly used an indirect audit method to estimate taxable sales due to the taxpayer’s incomplete records, and the reaudit’s reduction to the taxable measure was reasonable. The OTA also concluded that interest abatement was not ...