1. The Issuing Agency Determines the Governing Rules
Federal, state, and city agencies may examine the same activity under different laws. Answering one agency's notice does not satisfy another agency's requirements.
Income Tax Notices Come from the IRS or FTB
The IRS administers federal income tax. California's Franchise Tax Board (FTB) handles state personal income tax and corporation franchise and income taxes. A final federal adjustment may trigger separate California reporting, but state rules can differ.
Sales and Payroll Taxes Follow State Procedures
The California Department of Tax and Fee Administration (CDTFA) handles sales and use taxes. The Employment Development Department (EDD) administers state payroll taxes, including unemployment insurance and income tax withholding. An EDD classification finding does not settle federal tax liability. See California employment tax disputes for the separate tests.
City Business Tax Is Not State Income Tax
Businesses operating in San José generally must register for a Business Tax Certificate, subject to exceptions and exemptions. The city Finance Department administers this tax under Municipal Code Chapter 4.76. Registration is generally due within 90 days after starting business. The certificate confirms payment, not zoning approval. A city assessment follows municipal hearing rules.
2. The Notice's Stage Changes What Can Be Challenged
A request for records, a proposed assessment, and a demand for payment call for different responses.
Filing Errors May Require Corrected Returns
Missing income or an incorrect deduction may call for an amended return. An unfiled year may require an original return. During an examination, a new return does not necessarily answer the agency's request or preserve appeal rights.
Audit Requests Differ from Proposed Assessments
An information request seeks evidence. An FTB Notice of Proposed Assessment states proposed tax or penalties and provides protest rights. An IRS business audit also calls for records supporting the disputed return items. See business tax lawyer guidance on reconciling those records.
Collection Notices Concern Existing Liabilities
Payment demands, liens, and levies involve collection, not necessarily a new assessment. An eligible IRS Collection Due Process notice generally allows 30 days to request a hearing. Prior opportunities to contest the tax can restrict challenges to the underlying liability.
San José's 2026 Business Tax Amnesty Program may waive penalties and interest on eligible past-due liabilities through December 31, 2026. Amnesty does not extend assessment-hearing deadlines.
3. Appeal Deadlines Depend on the Notice and Forum
Deadlines may run from mailing, the notice date, or service. Check the specific notice.
Standard Filing Windows Vary by Agency
| Notice | General Filing Period | Destination |
|---|---|---|
| IRS Notice of Deficiency | 90 days after mailing, or 150 in qualifying overseas cases | U.S. Tax Court |
| FTB Notice of Proposed Assessment | 60 days from notice date | FTB |
| FTB Notice of Action | 30 days from notice date | Office of Tax Appeals |
| CDTFA Notice of Determination | 30 days after service | CDTFA |
| EDD tax assessment | 30 days from mailing, or 10 for jeopardy | CUIAB |
| San José business tax assessment | 10 days after service | City Finance director |
IRS Notice of Deficiency
- General Filing Period90 days after mailing, or 150 in qualifying overseas cases
- DestinationU.S. Tax Court
FTB Notice of Proposed Assessment
- General Filing Period60 days from notice date
- DestinationFTB
FTB Notice of Action
- General Filing Period30 days from notice date
- DestinationOffice of Tax Appeals
CDTFA Notice of Determination
- General Filing Period30 days after service
- DestinationCDTFA
EDD tax assessment
- General Filing Period30 days from mailing, or 10 for jeopardy
- DestinationCUIAB
San José business tax assessment
- General Filing Period10 days after service
- DestinationCity Finance director
Special notices may differ.
IRS Deficiency Petitions Require a Court Filing
Under Internal Revenue Code § 6213(a), a qualifying Notice of Deficiency generally permits Tax Court review before payment. The ordinary petition period is 90 days. Qualifying overseas circumstances can allow 150 days. Further discussion with the IRS does not extend the deadline. DAWSON filings must reach the court by 11:59 p.m. Eastern time on the due date. For wider litigation issues, see tax disputes.
California Agencies Use Different Review Bodies
FTB proposals ordinarily allow 60 days to protest under Revenue and Taxation Code § 19041. An adverse Notice of Action generally allows 30 days to appeal to the Office of Tax Appeals. Under § 6561, a CDTFA sales and use tax determination generally allows 30 days after service to seek redetermination. EDD petitions instead go to the California Unemployment Insurance Appeals Board (CUIAB). CUIAB allows 30 days from mailing, or 10 for jeopardy assessments, and requires written rather than online tax petitions.
City Business Tax Hearings Require a Written Request
San José Municipal Code § 4.76.870 allows ten days after service to request a hearing from the Finance director in writing. A missed request can make the assessment final. Evidence may concern employee counts, locations, exemptions, or the amount due.
4. A Tax Case Review Starts with the Records
A San Jose tax case review connects disputed amounts to tax periods, legal issues, and records.
Organize Evidence by Agency and Tax Year
Keep notices, envelopes, returns, payment records, and earlier responses. Income disputes may require accounting and bank records. Sales tax disputes may turn on invoices or exemption certificates. Payroll reviews need wage reports and worker payment records. Keep filing receipts.
Separate Tax Preparation from Legal Representation
CPAs can prepare returns and, when authorized, represent taxpayers before the IRS. Tax attorneys address legal interpretation, contested liability, privilege questions, and eligible court proceedings. A deadline or disputed penalty may require legal review even when the arithmetic is straightforward.
12 Nov, 2026
