Mandatory Audit

STATE OF CALIFORNIA BETTY T. YEE STATE BOARD OF EQUALIZATIONActing Member 450 N STREET, SACRAMENTO, CALIFORNIA First District, San Francisco PO BOX 942879, SACRAMENTO, CALIFORNIA 94279-0082 916-445-8485 • FAX 916-323-3387 BILL LEONARD www.boe.ca.gov Second District, Sacramento/Ontario CLAUDE PARRISH Third District, Long Beach JOHN CHIANG January 3, 2005 Fourth District, Los Angeles STEVE WESTLY State Controller, Sacramento RAMON J. HIRSIG Executive Director Re: Escape Assessment After Audit Dear Mr. : This is in response to your letter dated October 5, 2004, addressed to Mr. Louis Ambrose, Supervising Tax Counsel, regarding an escape assessment that was issued after a mandatory 1audit was performed pursuant to Revenue and Taxation Code section 469. You ask whether an assessor may correct an error involving the exercise of a value judgment under section 469 if the taxpayer has fully disclosed all of its taxable property on its property statement and the value of the property was enrolled by the assessor. You also ask whether the assessor has authority to correct such an error under section 4831. As discussed below, we conclude that if a taxpayer filed a property statement which failed to properly classify taxable property, an assessor may issue an escape assessment under section 531.4 to the extent that such failure caused the assessor to assess the property at a lower valuation than the assessor would ...