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Our business was under audit by FTB for Tax Year 2011. Few months ago we sent them corrected Tax return for Tax Year 2011. And, finally, yesterday we received check with refund. The refund is less than I expected, but just for them to leave us alone I might consider to accept the offer.

However, does the fact that FTB sent me a check with refund really mean that the whole audit is over for Tax Year 2011? Or can they still potentially revisit something else for Tax Year 2011 and send me a bill later?

  • -1 for being too cheap to hire a EA/CPA to represent you during audit. Not only you saved nothing by that, but it probably cost you quite a lot. – littleadv Apr 3 '16 at 1:35
  • @littleadv The funny part is that we did hire CPA and she told us that we can write a letter ourselves to FTB. This is in-mail audit where FTB was requesting us to file 2012 Tax Return, presumably because of a missing "Final" checkbox in 2011 Tax Return when business structure changed from Partnership to Sole Proprietorship. I don't know why she did not want to handle the case from A-Z, but I have to admit that the whole tax situation was a mess in our case also because of messed up forms (565 vs 568). – john1234 Apr 3 '16 at 5:56
  • Then get another one. Obviously you cannot handle it on your own, and this is too tricky a situation to not know what you're doing. The CA FTB is notorious for being very aggressive, and many times unjustifiably so. In any case - if you have a contact at FTB, you (or your representative) should call them and ask about this check and its relation to the audit. Generally, you're not supposed to file an amended return while already under audit unless the auditor approves you to do so. – littleadv Apr 3 '16 at 16:30
  • @littleadv Before sending amended tax return to FTB, I actually called FTB, explained the situation and they told me what I need to send them to fix the mess. They even mentioned the amount I would be getting back. AFAIK This is in-mail audit that does not have a particular person assigned to our case. Anyway, thanks for your help and I think I agree that getting good EA is better option. Though, I was curious if I could handle the case, because the next step to fix the mess always seemed easy, but it turns out that either there is mess also at FTB or I am indeed doing something the wrong way. – john1234 Apr 3 '16 at 18:31
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Not it doesn't, and yes they can.

If the audit is closed, you should have received invitation to attend the closing conference, and get the summary of decisions from that meeting in writing.

I suggest you check with your tax representative about this refund check before cashing it.

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