San Francisco Tax Preparation / CPA: CA – Used car dealer entitled to reported taxable sales adjustments

Filed in CCH NEWS FEED by on December 10, 2020

A used car dealership was entitled to an adjustment of audited understatement of reported sales for California sales and use tax purposes. In this matter, although the taxpayer did not provide a sales journal or other summary record of sales, the California Department of Tax and Fee Administration (department) credited the taxpayer for a bad debt. It was noted that the bank deposit method used by the department only accounted for actual cash or checks received and the amounts that were never received by the taxpayer were not included in the audited taxable measure and thus were not taxed. The taxpayer proved that adjustments were warranted for loans and an insurance payment. Accordingly, the taxpayer’s redetermination petition was allowed. Angulo, California Office of Tax Appeals, No. 18093742, July 8, 2020, released November 2020

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