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Business Taxes Law Guide—Revision 2024

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California Department of Tax and Fee Administration

Title 18. Public Revenues
Division 5. California Department of Tax and Fee Administration

Chapter 1. Appeals

Article 2C. Contesting a Jeopardy Determination

California Department of Tax and Fee Administration

Chapter 1. Appeals

Article 2C. Contesting a Jeopardy Determination

35022. Notice of Jeopardy Determination.

Reference: Sections 6536, 6538, 7698, 7700, 8826, 8828, 30241, 30243, 38431, 38433, 43350, 43351, 45351, 45352, 46301, 46302, 50120.1, 50120.2, 55101, 55102, 60330 and 60332, Revenue and Taxation Code.

(a) If the collection of any amount of tax or fee due to the state will be jeopardized by delay, a notice of jeopardy determination may be issued that will render such amounts immediately due and payable.

(b) The notice of jeopardy determination will state the amount of tax or fee due that is covered by the jeopardy determination and that such amounts are immediately due and payable. The notice of jeopardy determination will also state the amount of security the taxpayer must deposit with CDTFA as a condition to filing a petition for redetermination of the jeopardy determination.

History—New article 2C (regulations 35022-35032) and regulation filed March 19, 2018, as an emergency; effective and operative March 19, 2018. Article and regulation refiled September 17, 2018, as an emergency; effective and operative September 17, 2018. Article and regulation refiled December 17, 2018, as an emergency; effective and operative December 17, 2018. Certificate of Compliance transmitted to OAL on February 20, 2019 and filed March 19, 2019. (The regulation incorporates provisions from regulation 5221 in division 2.1.)

Note.—Authority cited: Sections 15570.40 and 15606, Government Code; Section 25215.74, Health and Safety Code; Sections 7051, 8251, 9251, 30451, 34013, 38701, 42020, 42103, 43501, 45851, 46601, 50152, 55301 and 60601, Revenue and Taxation Code.

35023. Filing a Petition for Redetermination of a Jeopardy Determination.

Reference: Sections 6538, 7700, 8828, 30243, 38433, 43351, 45352, 46302, 50120.2, 55102 and 60332, Revenue and Taxation Code.

The person against whom a jeopardy determination is made may file a petition for redetermination of the jeopardy determination and related documents as specified in regulation 35015.

History—New regulation filed March 19, 2018, as an emergency; effective and operative March 19, 2018. Regulation refiled September 17, 2018, as an emergency; effective and operative September 17, 2018. Regulation refiled December 17, 2018, as an emergency; effective and operative December 17, 2018. Certificate of Compliance transmitted to OAL on February 20, 2019 and filed March 19, 2019. (The regulation incorporates provisions from regulation 5222 in division 2.1.)

Note.—Authority cited: Sections 15570.40 and 15606, Government Code; Section 25215.74, Health and Safety Code; Sections 7051, 8251, 9251, 30451, 34013, 38701, 42020, 42103, 43501, 45851, 46601, 50152, 55301 and 60601, Revenue and Taxation Code.

35024. Contents of a Petition for Redetermination of Jeopardy Determination.

Reference: Sections 6538, 7700, 8828, 30243, 38433, 43351, 45352, 46302, 50120.2, 55102 and 60332, Revenue and Taxation Code.

A petition for redetermination of a jeopardy determination must satisfy all the requirements for a petition for redetermination as provided in article 2A of this chapter.

History—New regulation filed March 19, 2018, as an emergency; effective and operative March 19, 2018. Regulation refiled September 17, 2018, as an emergency; effective and operative September 17, 2018. Regulation refiled December 17, 2018, as an emergency; effective and operative December 17, 2018. Certificate of Compliance transmitted to OAL on February 20, 2019 and filed March 19, 2019. (The regulation incorporates provisions from regulation 5222.4 in division 2.1.)

Note.—Authority cited: Sections 15570.40 and 15606, Government Code; Section 25215.74, Health and Safety Code; Sections 7051, 8251, 9251, 30451, 34013, 38701, 42020, 42103, 43501, 45851, 46601, 50152, 55301 and 60601, Revenue and Taxation Code.

35025. Limitation Period for a Petition for Redetermination of Jeopardy Determination.

Reference: Sections 6538, 7700, 8828, 30243, 38433, 43351, 45352, 46302, 50120.2, 55102 and 60332, Revenue and Taxation Code.

Notwithstanding the provisions of article 2A of this chapter, a petition for redetermination of a jeopardy determination must be filed within the earlier of 10 days from the date that the notice of jeopardy determination was mailed or 10 days from the date that the notice of jeopardy determination was personally served.

History—New regulation filed March 19, 2018, as an emergency; effective and operative March 19, 2018. Regulation refiled September 17, 2018, as an emergency; effective and operative September 17, 2018. Regulation refiled December 17, 2018, as an emergency; effective and operative December 17, 2018. Certificate of Compliance transmitted to OAL on February 20, 2019 and filed March 19, 2019.(The regulation incorporates provisions from regulation 5222.6 in division 2.1.)

Note.—Authority cited: Sections 15570.40 and 15606, Government Code; Section 25215.74, Health and Safety Code; Sections 7051, 8251, 9251, 30451, 34013, 38701, 42020, 42103, 43501, 45851, 46601, 50152, 55301 and 60601, Revenue and Taxation Code.

35026. Security Requirement for a Petition; Stay of Collection Activities.

Reference: Sections 6538, 7700, 8828, 30243, 38433, 43351, 45352, 46302, 50120.2, 55102 and 60332, Revenue and Taxation Code.

(a) A petition for redetermination of a jeopardy determination will not be accepted unless the taxpayer deposits the amount of security indicated in the notice of jeopardy determination within the 10-day period for filing the petition as provided in regulation 35025.

(b) Where the person against whom a notice of jeopardy determination is issued files a timely petition of the determination along with the security indicated in the notice of jeopardy determination, collection activities for the amounts assessed by the jeopardy determination will be stayed pending resolution of the petition.

History—New regulation filed March 19, 2018, as an emergency; effective and operative March 19, 2018. Regulation refiled September 17, 2018, as an emergency; effective and operative September 17, 2018. Regulation refiled December 17, 2018, as an emergency; effective and operative December 17, 2018. Certificate of Compliance transmitted to OAL on February 20, 2019 and filed March 19, 2019. (The regulation incorporates provisions from regulation 5223 in division 2.1.)

Note.—Authority cited: Sections 15570.40 and 15606, Government Code; Section 25215.74, Health and Safety Code; Sections 7051, 8251, 9251, 30451, 34013, 38701, 42020, 42103, 43501, 45851, 46601, 50152, 55301 and 60601, Revenue and Taxation Code.

35027. Review of a Petition for Redetermination of Jeopardy Determination.

Reference: Sections 6538, 7700, 8828, 30243, 38433, 43351, 45352, 46302, 50120.2, 55102 and 60332, Revenue and Taxation Code.

(a) A petition for redetermination of a jeopardy determination may raise any objections the taxpayer has to the notice of jeopardy determination, including objections to the appropriateness of issuing the notice of jeopardy determination.

(b) The administrative review of a petition for redetermination of a jeopardy determination follows the same procedures applicable to the review of other petitions for redetermination under article 2A of this chapter.

(c) The scope of CDTFA’s review of a petition for redetermination of a jeopardy determination issued under the Hazardous Substances Tax Law, Covered Electronic Waste Recycling Fee, Water Rights Fee Law, or Lead-Acid Battery Recycling Act is limited as provided in regulations 35011, 35012, 35013, and 35014, respectively.

History—New regulation filed March 19, 2018, as an emergency; effective and operative March 19, 2018. Regulation refiled September 17, 2018, as an emergency; effective and operative September 17, 2018. Regulation refiled December 17, 2018, as an emergency; effective and operative December 17, 2018. Certificate of Compliance transmitted to OAL on February 20, 2019 and filed March 19, 2019. (The regulation incorporates provisions from regulation 5224 in division 2.1.)

Note.—Authority cited: Sections 15570.40 and 15606, Government Code; Section 25215.74, Health and Safety Code; Sections 7051, 8251, 9251, 30451, 34013, 38701, 42020, 42103, 43501, 45851, 46601, 50152, 55301 and 60601, Revenue and Taxation Code.

35028. Persons Who May File an Application for Administrative Hearing; Manner of Filing; and Consolidation with Petition.

Reference: Sections 6538.5, 7700.5, 8828.5, 30243.5, 38435, 43352, 45353, 50120.3, 55103 and 60333, Revenue and Taxation Code.

(a) The person against whom a jeopardy determination is made may file an application for an administrative hearing for one or more of the following purposes:

(1) To establish that the jeopardy determination is excessive.

(2) To establish that the sale of the property that may be seized after issuance of the jeopardy determination, or any part thereof, should be delayed pending the administrative hearing because the sale would result in irreparable injury to the person.

(3) To request the release of all or part of the property to the person.

(4) To request a stay of collection activities.

(5) To request administrative review of any other issue raised by the jeopardy determination.

(b) An application for an administrative hearing and related document may be filed as specified in regulation 35015.

(c) The scope of CDTFA’s review of an application for administrative hearing for a jeopardy determination issued under the Hazardous Substances Tax Law, Covered Electronic Waste Recycling Fee, Water Rights Fee Law, or Lead-Acid Battery Recycling Act is limited as provided in regulations 35011, 35012, 35013, and 35014, respectively.

(d) If an application is filed under this regulation and a petition is filed under regulation 35023, the application and petition will be consolidated into one administrative hearing.

History—New regulation filed March 19, 2018, as an emergency; effective and operative March 19, 2018. Regulation refiled September 17, 2018, as an emergency; effective and operative September 17, 2018. Regulation refiled December 17, 2018, as an emergency; effective and operative December 17, 2018. Certificate of Compliance transmitted to OAL on February 20, 2019 and filed March 19, 2019. (The regulation incorporates provisions from regulation 5225 in division 2.1.)

Note.—Authority cited: Sections 15570.40 and 15606, Government Code; Section 25215.74, Health and Safety Code; Sections 7051, 8251, 9251, 30451, 34013, 38701, 42020, 42103, 43501, 45851, 46601, 50152, 55301 and 60601, Revenue and Taxation Code.

35029. Limitation Period for Filing an Application for Administrative Hearing.

Reference: Sections 6538.5, 7700.5, 8828.5, 30243.5, 38435, 43352, 45353, 46303, 50120.3, 55103 and 60333, Revenue and Taxation Code.

(a) An application for administrative hearing must be filed within the earlier of 30 days from the date that the notice of jeopardy determination was mailed or 30 days from the date that the notice of jeopardy determination was personally served.

(b) An application for administrative hearing filed after the expiration of the time period provided for in subdivision (a) should be accompanied by a statement demonstrating why the person believes there was good cause for the person’s failure to file a timely application.

(c) If good cause existed for failing to file a timely application, an administrative hearing may still be granted.

History—New regulation filed March 19, 2018, as an emergency; effective and operative March 19, 2018. Regulation refiled September 17, 2018, as an emergency; effective and operative September 17, 2018. Regulation refiled December 17, 2018, as an emergency; effective and operative December 17, 2018. Certificate of Compliance transmitted to OAL on February 20, 2019 and filed March 19, 2019. (The regulation incorporates provisions from regulation 5226 in division 2.1.)

Note.—Authority cited: Sections 15570.40 and 15606, Government Code; Section 25215.74, Health and Safety Code; Sections 7051, 8251, 9251, 30451, 34013, 38701, 42020, 42103, 43501, 45851, 46601, 50152, 55301 and 60601, Revenue and Taxation Code.

35030. Contents of an Application for Administrative Hearing.

Reference: Sections 6538.5, 7700.5, 8828.5, 30243.5, 38435, 43352, 45353, 46303, 50120.3, 55103 and 60333, Revenue and Taxation Code.

Every application for administrative hearing must:

(a) Be in writing;

(b) Identify the purpose for which the person has applied for an administrative hearing;

(c) State the specific factual or legal grounds upon which the application is founded; and

(d) Be signed by the person against whom the jeopardy determination was made or the person’s authorized representative.

History—New regulation filed March 19, 2018, as an emergency; effective and operative March 19, 2018. Regulation refiled September 17, 2018, as an emergency; effective and operative September 17, 2018. Regulation refiled December 17, 2018, as an emergency; effective and operative December 17, 2018. Certificate of Compliance transmitted to OAL on February 20, 2019 and filed March 19, 2019. (The regulation incorporates provisions from regulation 5227 in division 2.1.)

Note.—Authority cited: Sections 15570.40 and 15606, Government Code; Section 25215.74, Health and Safety Code; Sections 7051, 8251, 9251, 30451, 34013, 38701, 42020, 42103, 43501, 45851, 46601, 50152, 55301 and 60601, Revenue and Taxation Code.

35031. Option to Post Security with an Application for Administrative Hearing.

Reference: Sections 6538.5, 7700.5, 8828.5, 30243.5, 38435, 43352, 45353, 46303, 50120.3, 55103 and 60333, Revenue and Taxation Code.

(a) A person is not required to post security to obtain an administrative hearing.

(b) Property seized under a notice of jeopardy determination may not be sold without the consent of the owner during the first 30 days after service of the notice of jeopardy determination, nor while a timely application for administrative hearing is pending. The storing of the property during the period the application is pending will be at the applicant’s expense.

(c) The filing of an application for an administrative hearing will not stay other collection activities not identified in subdivision (b) unless the person deposits the amount of security indicated in the notice of jeopardy determination within the 10-day period specified in regulation 35025. If the person deposits the amount of security indicated in the notice of jeopardy determination after the 10-day period specified in regulation 35025, BTFD will consider whether a stay of collection activities is warranted.

History—New regulation filed March 19, 2018, as an emergency; effective and operative March 19, 2018. Regulation refiled September 17, 2018, as an emergency; effective and operative September 17, 2018. Regulation refiled December 17, 2018, as an emergency; effective and operative December 17, 2018. Certificate of Compliance transmitted to OAL on February 20, 2019 and filed March 19, 2019. (The regulation incorporates provisions from regulation 5228 in division 2.1.)

Note.—Authority cited: Sections 15570.40 and 15606, Government Code; Section 25215.74, Health and Safety Code; Sections 7051, 8251, 9251, 30451, 34013, 38701, 42020, 42103, 43501, 45851, 46601, 50152, 55301 and 60601, Revenue and Taxation Code.

35032. Review by the Assigned Section and Assignment of an Application for Administrative Hearing to Appeals Bureau for Appeals Conference.

Reference: Sections 6538.5, 7700.5, 8828.5, 30243.5, 38435, 43352, 45353, 46303, 50120.3, 55103 and 60333, Revenue and Taxation Code.

(a) Upon receipt of an application for administrative hearing, the assigned section will promptly mail the taxpayer a letter acknowledging receipt of the application and containing the contact information for the applicable staff within the assigned section. The assigned section will review the application in accordance with article 2A of this chapter, and may find that no relief is warranted, or may find that one or more of the following types of relief should be granted: that the sale of the property will irreparably damage the applicant and that the property will not be sold; that the property, or a portion thereof, be released to the applicant or to the person from whom it was seized; or that the tax as determined is excessive and that the amount of the determination be reduced accordingly. Unless the taxpayer is satisfied with the findings of the assigned section, the assigned section will forward the application to the Appeals Bureau for the scheduling of an administrative hearing in accordance with regulations 35017 and 35018.

(b) An administrative hearing will be scheduled and held as provided in article 8 of this chapter for the scheduling and holding of an appeals conference. The Appeals Bureau may find that no relief is warranted, or may find that one or more of the following types of relief should be granted: that the sale of the property will irreparably damage the applicant and that the property will not be sold; that the property, or a portion thereof, be released to the applicant or to the person from whom it was seized; or that the tax as determined is excessive and that the amount of the determination be reduced accordingly.

History—New regulation filed March 19, 2018, as an emergency; effective and operative March 19, 2018. Regulation refiled September 17, 2018, as an emergency; effective and operative September 17, 2018. Regulation refiled December 17, 2018, as an emergency; effective and operative December 17, 2018. Certificate of Compliance transmitted to OAL on February 20, 2019 and filed March 19, 2019. (The regulation incorporates provisions from regulation 5229 in division 2.1.)

Note.—Authority cited: Sections 15570.40 and 15606, Government Code; Section 25215.74, Health and Safety Code; Sections 7051, 8251, 9251, 30451, 34013, 38701, 42020, 42103, 43501, 45851, 46601, 50152, 55301 and 60601, Revenue and Taxation Code.