What to Expect During an FTB Field Audit

The FTB Just Scheduled a Field Audit — Now What?

If you’ve been contacted by the California Franchise Tax Board (FTB) for a field audit, you’re likely feeling overwhelmed — and unsure what comes next. Field audits are more serious than routine correspondence audits. They involve in-person or video-based interviews and deep reviews of your records, expenses, and business practices. In this guide, I’ll explain what to expect from an FTB field audit, what triggers them, and how we help Orange County taxpayers defend their finances, businesses, and peace of mind.

If you’ve received a letter or phone call from the Franchise Tax Board (FTB) saying they’ll be coming to your business or requesting a meeting, you’re about to experience an FTB field audit — and how you respond can make or break the outcome.

Field audits are serious, time-consuming, and highly detailed — but they’re also winnable with the right preparation.

In this guide, we explain what triggers a California FTB audit, what to expect during the process, and how to protect yourself with the right strategy.

What Is an FTB Field Audit?

An FTB field audit is an in-person or remote investigation conducted by the Franchise Tax Board to verify the accuracy of your:

• California income tax returns (personal or business)
• Deductions, credits, or apportionment claims
• Residency, sourcing, and multi-state activity
• Business income and expenses

Unlike mail-based audits, field audits involve direct meetings (in person or virtual), document reviews, and often a visit to your business location or CPA’s office.

Why Was I Selected for a Field Audit?

Common triggers for field audits include:

• High or inconsistent deductions
• Large Schedule C losses
• Multi-state income or residency issues
• Real estate sales or 1031 exchanges
• Claimed business expenses with no clear income
• IRS audit referral
• Prior audit history or amended returns

👉 What Triggers a California FTB Audit?

What Happens After You Receive an Audit Notice?

You’ll typically receive a Notification of Audit Contact (Form FTB 1015A or 1015B) explaining:

• The audit year(s)
• The type of audit (income, residency, apportionment, etc.)
• The assigned auditor’s name and contact info
• A proposed meeting time
• A request for specific records

You’ll also receive Publication 1017, which outlines your rights.

👉 Received a Notice from the FTB? Here’s What It Means

What Records Will the FTB Request?

The audit will start with a request for:

• Tax returns (federal and CA) for relevant years
• Bank and credit card statements
• General ledger and income/expense reports
• Receipts for deductions
• Proof of residency (driver’s license, voting records, home utility bills)
• Mileage logs, home office logs, business use percentages
• Sales records (especially for sole proprietors or small business owners)

At this stage, knowledge of both California and federal procedure helps — understanding the IRS audit assessment process and options like challenging IRS penalties or pursuing California FTB penalty relief options can make a huge difference.

What to Expect During the Field Audit Itself

The FTB auditor will:

1. Schedule an initial meeting with you or your representative (can be in person or Zoom)
2. Review your documentation and ask questions about income, expenses, and records
3. Tour your business or home office (if relevant and permitted)
4. Issue an Information Document Request (IDR) with a detailed list of needed documentation
5. Prepare a preliminary report outlining proposed changes
6. Provide an opportunity to respond or challenge findings

💡 The entire process can take 3–9 months, depending on the case complexity and your cooperation.

Common Issues the FTB Targets in Field Audits

• Non-business deductions on business returns
• Commingling of business and personal expenses
• Home office claims without logs or exclusive-use proof
• Misclassified employees (contractor vs employee)
• Apportionment errors for multi-state businesses
• Underreported cash income

What Not to Do During an FTB Audit

• Don’t lie, guess, or overexplain — provide only what’s requested
• Don’t turn over original records unless required — give copies
• Don’t ignore deadlines — even short delays can raise red flags
• Don’t attend the audit meeting alone — have your CPA or representative present

What to Do If You Disagree with the Results

If the auditor proposes changes:

• You’ll receive a Notice of Proposed Assessment (NPA)
• You’ll have 60 days to protest the audit findings
• If unresolved, the case may move to Office of Tax Appeals (OTA)

👉 What Happens If You Ignore FTB Notices

How Boulanger CPA Helps with FTB Field Audits

We help individuals and businesses across Orange County — including Irvine, Anaheim, Santa Ana, and Fullerton — by:

• Communicating directly with the auditor
• Preparing your books and documentation
• Attending audit meetings on your behalf
• Responding to IDRs and protest filings
• Minimizing audit exposure and closing the file quickly

To better understand your rights and options, learn more in Defend What’s Yours — and protect your business and financial future.

📞 Call 657-218-5700
🌐 www.orangecounty.cpa

📣 About the Author

Marc Boulanger, CPA is the founder of Boulanger CPA and Consulting PC, a boutique tax resolution firm based in Orange County, California and trusted by high-income individuals and business owners across Southern California.

He is the author of Defend What’s Yours: A California Taxpayer’s Guide to Beating the IRS and FTB at Their Own Game, available now on Amazon. The book offers a step-by-step plan for resolving IRS and FTB tax debt without losing your business, your home, or your peace of mind.

With over a decade of experience resolving high-stakes IRS and State tax matters, Marc brings strategic insight to complex cases involving wage garnishments, bank levies, unfiled returns, and six-figure tax debts. He is known for helping clients reduce or eliminate tax liabilities through expertly negotiated settlements and compliance plans.

Marc is a Certified Public Accountant licensed in California and Oklahoma and holds the designation of Certified Tax Representation Consultant. He is a member of the American Society of Tax Problem Solvers (ASTPS) — the national organization founded by the educators and practitioners who have trained thousands of CPAs, EAs, and tax attorneys in IRS representation strategy.

Every case is handled with discretion, proven methodology, and direct CPA-led representation — not call center scripts.

📍 Learn more at www.orangecounty.cpa or call (657) 218-5700.