2005 California Revenue and Taxation Code Sections 32271-32273 Article 2. Deficiency Determinations

32271.  If the board is dissatisfied with the return or returns
filed or amount of tax paid to the state by any taxpayer, it may
compute and determine the amount to be paid based upon any
information available to it.  One or more additional determinations
may be made of the amount of tax due for one or for more than one
period.  The amount of tax so determined shall bear interest at the
modified adjusted rate per month, or fraction thereof, established
pursuant to Section 6591.5, from the 15th day after the close of the
period for which the amount of the tax, or any portion thereof,
should have been reported until the date of payment.  In making a
determination, the board may offset overpayment for a period or
periods against underpayments for another period or periods and
against the interest and penalties on the underpayments.  If any part
of the deficiency for which a determination of an additional amount
due is made is found to have been occasioned by negligence or
intentional disregard of this part or authorized rules, a penalty of
10 percent of the amount of the determination shall be added, plus
interest as above provided.  If any part of the deficiency for which
a determination of an additional amount due is made is found to be
occasioned by fraud or an intent to evade this part or authorized
rules, a penalty of 25 percent of the amount of the determination
shall be added, plus interest as above provided.  The board shall
give to the taxpayer written notice of its determination.  The notice
shall be placed in a sealed envelope, with postage paid, addressed
to the taxpayer at his address as it appears in the records of the
board.  The giving of notice shall be deemed complete at the time of
the deposit of the notice in the United States Post Office, or a
mailbox, sub-post 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 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.
32272.  Except in the case of a fraud, intent to evade this part or
authorized rules and regulations, or failure to make a return, every
notice of a determination of an additional amount due shall be given
within three years after the date when the amount should have been
paid or the return was due, or within three years after the return
was filed, whichever period expires later. In the case of failure to
make a return, the notice of determination shall be mailed within
eight years after the date the return was due.
32272.1.  In the case of a deficiency arising under this part during
the lifetime of a decedent, a notice of deficiency determination
shall be mailed within four months after written request therefor, in
the form required by the board, by the fiduciary of the estate or
trust or by any other person liable for the tax or any portion
thereof.
32273.  If before the expiration of the time prescribed in Section
32272 for the mailing of a notice of deficiency determination the
taxpayer has consented in writing to the mailing of the notice after
such time, the notice may be mailed at any time prior to the
expiration of the period 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.