Article 3 - Deficiency Assessments

California Revenue and Taxation Code — §§ 12421-12435

Sections (15)

Repealed (in Sec. 54) and added by Stats. 2013, Ch. 33, Sec. 55. (SB 78) Effective June 27, 2013. Section operative July 1, 2013, by its own provisions.

(a)As soon as practicable after an insurer’s or surplus line broker’s return is filed, the commissioner shall examine it, together with any information within his or her possession or that may come into his or her possession, and he or she shall determine the correct amount of tax of the insurer or surplus line broker.

(b)This section

shall become operative on July 1, 2013.

§ 12422

Repealed (in Sec. 57) and added by Stats. 2013, Ch. 33, Sec. 58. (SB 78) Effective June 27, 2013. Section operative July 1, 2013, by its own provisions.

(a)If the commissioner determines that the amount of tax disclosed by the insurer’s tax return and assessed by the board is less than the amount of tax disclosed by his or her examination, he or she shall propose, in writing, to the board a deficiency assessment for the difference. The proposal shall set forth the basis for the deficiency assessment and the details of its computation.

(b)If the commissioner determines that the amount of tax disclosed by the surplus line broker’s tax return is less than the amount of tax disclosed by his or her examination, he or she shall propose, in writing, to the board a deficiency assessment for the difference. The proposal shall set forth the basis for the deficiency assessment and the details of its computation.

(c)This section shall become operative on July 1, 2013.

§ 12423

Repealed (in Sec. 60) and added by Stats. 2013, Ch. 33, Sec. 61. (SB 78) Effective June 27, 2013. Section operative July 1, 2013, by its own provisions.

(a)If an insurer or surplus line broker fails to file a return, the commissioner may require a return by mailing notice to the insurer or surplus line broker to file a return by a specified date or he or she may without requiring a return, or upon no return having been filed pursuant to the demand therefor, make an estimate of the amount of tax due for the calendar year or years in respect to which the

insurer or surplus line broker failed to file the return. The estimate shall be made from any available information which is in the commissioner’s possession or may come into his or her possession, and the commissioner shall propose, in writing, to the board a deficiency assessment for the amount of the estimated tax. The proposal shall set forth the basis of the estimate and the details of the computation of the tax.

(b)This section shall become operative on July 1, 2013.

§ 12424

Added by Stats. 1961, Ch. 740.

The board shall make a deficiency assessment on the basis of a proposal submitted to it by the commissioner pursuant to Section 12422 or 12423.

§ 12425

Added by Stats. 1961, Ch. 740.

One or more deficiency assessments may be proposed or made for the amount of tax due for one or for more than one calendar year.

§ 12426

Added by Stats. 1961, Ch. 740.

In making a deficiency assessment the board may offset an overpayment for one calendar year against an underpayment for another calendar year, against penalties and against any interest on an underpayment.

§ 12427

Repealed (in Sec. 63) and added by Stats. 2013, Ch. 33, Sec. 64. (SB 78) Effective June 27, 2013. Section operative July 1, 2013.

(a)The board shall promptly notify the insurer or surplus line broker of a deficiency assessment made against the insurer or surplus line broker.

(b)This section shall become operative on July 1, 2013.

§ 12428

Repealed (in Sec. 66) and added by Stats. 2013, Ch. 33, Sec. 67. (SB 78) Effective June 27, 2013. Section operative July 1, 2013, by its own provisions.

(a)An insurer or surplus line broker against which a deficiency assessment is made under Section 12424 or 12425 may petition for redetermination of the deficiency assessment within 30 days after service upon the insurer or surplus line broker of the notice thereof, by filing with the board a written petition setting forth the grounds of objection to the deficiency assessment and the correction sought.

At the time the petition is filed with the board, a copy of the petition shall be filed with the commissioner.

If a petition for redetermination is not filed within the period prescribed by this section, the deficiency assessment becomes final and due and payable at the expiration of that period.

(b)This section shall become operative on July 1, 2013.

§ 12429

Repealed (in Sec. 69) and added by Stats. 2013, Ch. 33, Sec. 70. (SB 78) Effective June 27, 2013. Section operative July 1, 2013, by its own provisions.

(a)If a petition for redetermination of a deficiency assessment is filed within the time allowed under Section 12428, the board shall reconsider the deficiency assessment and, if the insurer or surplus line broker has so requested in the petition, shall grant an oral hearing for the presentation of evidence and argument before the board or its authorized representative. The board shall give the

petitioner and the commissioner at least 20 days’ notice of the time and place of hearing. The hearing may be continued from time to time as may be necessary.

(b)This section shall become operative on July 1, 2013.

§ 12430

Added by Stats. 1961, Ch. 740.

The board may decrease or increase the amount of the deficiency assessment before the deficiency assessment becomes final, but the amount may be increased only if a claim for the increase is asserted by the commissioner or the board at or before the hearing.

§ 12431

Repealed (in Sec. 72) and added by Stats. 2013, Ch. 33, Sec. 73. (SB 78) Effective June 27, 2013. Section operative July 1, 2013, by its own provisions.

(a)The order or decision of the board upon a petition for redetermination of a deficiency assessment becomes final 30 days after service on the insurer or surplus line broker of a notice thereof, and any resulting deficiency assessment is due and payable at the time the order or decision becomes final.

(b)This section shall become

operative on July 1, 2013.

§ 12432

Amended by Stats. 1969, Ch. 736.

Except for a notice given pursuant to Section 12430 or 12431, or in the case of fraud or the failure to file a return, every notice of a deficiency assessment shall be given within four years after April 1st of the year following the year for which the amount of tax is assessed or within four years after the return is filed, whichever period expires the later. In the case of failure to file a return the notice shall be given within eight years after April 1st of the year following the year for which the amount of tax is assessed.

§ 12433

Repealed (in Sec. 75) and added by Stats. 2013, Ch. 33, Sec. 76. (SB 78) Effective June 27, 2013. Section operative July 1, 2013, by its own provisions.

(a)If before the expiration of the time prescribed in Section 12432 for giving of a notice of deficiency assessment the insurer or surplus line broker has consented in writing to the giving of the notice after that time, the notice may be given at any time prior to the expiration of the time agreed upon. The period so agreed upon may be extended by subsequent agreements in writing made before the

expiration of the period previously agreed upon.

(b)This section shall become operative on July 1, 2013.

§ 12434

Repealed (in Sec. 78) and added by Stats. 2013, Ch. 33, Sec. 79. (SB 78) Effective June 27, 2013. Section operative July 1, 2013, by its own provisions.

(a)Any notice required by this article shall be placed in a sealed envelope, with postage paid, addressed to the insurer or surplus line broker at its address as it appears in the records of the commissioner or the board. The giving of notice shall be deemed complete at the time of deposit of the notice in the United States Post Office, or a mailbox, subpost office, substation or mail chute or other

facility regularly maintained or provided by the United States Postal Service, without extension of time for any reason. In lieu of mailing, a notice may be served personally by delivering to the person to be served and service shall be deemed complete at the time of the delivery. Personal service to a corporation may be made by delivery of a notice to any person designated in the Code of Civil Procedure to be served for the corporation with summons and complaint in a civil action.

(b)This section shall become operative on July 1, 2013.

§ 12435

Repealed and added by Stats. 1961, Ch. 740.

A copy of each notice of a deficiency assessment made by the board shall be transmitted to the commissioner and the Controller. The Controller shall keep an appropriate record of all such assessments and any payments thereon.