California FTB Notice Authorization to Release Information to FTB (AUD 9921)

The AUD 9921 is California’s Authorization to Release Information form, sent by the Franchise Tax Board when an audit is underway and the FTB needs your written consent to gather records from third parties — banks, employers, payroll processors, or other state agencies. It’s not a demand letter, but ignoring it can slow down your audit and make the FTB rely on estimated figures that usually aren’t in your favor.

What many people miss: the form covers a broader scope than it appears. By signing without restrictions, you’re authorizing the FTB to contact essentially any entity holding records related to your California-source income. Under California Revenue and Taxation Code Section 19504, the FTB already has broad summons authority, but the AUD 9921 is asking you to waive potential procedural challenges. You can negotiate the scope — limiting it to specific tax years or specific record types — before signing.

At The Reed Corporation, we review every AUD 9921 before a client signs. We identify whether a narrowed scope is appropriate, add limiting language where possible, and coordinate directly with the FTB auditor. That prevents the agency from using your consent as a blank check to dig into unrelated accounts or years.

You’re not legally required to sign the AUD 9921 as written — the FTB can still obtain records through a formal summons under R&TC Section 19504, but that takes longer and may escalate the audit. Refusing outright can create friction. The smarter move is responding in writing with a modified version that limits the authorization to specific years and specific account types, rather than a blanket refusal.

The catch: if your audit involves unreported income or the FTB suspects you’ve underreported California-source income, an unmodified signature can open doors you’d rather keep closed. Once signed, third parties are legally protected from any liability for complying with the FTB’s requests. There’s no take-back mechanism. California auditors sometimes request the AUD 9921 early in the process specifically to make subsequent records requests faster and harder to challenge.

We handle these negotiations routinely. A CPA or tax professional representing you under a valid POA (Form 3520-PIT or 3520-BE) can respond on your behalf, propose scope limitations, and keep the audit moving without giving away more than necessary. Getting professional eyes on this before you respond is worth it.

A power of attorney — filed on FTB Form 3520-PIT for individuals or 3520-BE for businesses — authorizes your CPA or tax attorney to represent you, speak for you, and receive confidential information on your behalf. The AUD 9921 is different: it authorizes the FTB to collect information from third parties about you. One gives your representative authority over your case. The other gives the FTB authority to pull your records from outside sources.

Both documents can exist simultaneously, and in most California audits, they do. What’s easy to miss is that having a POA on file doesn’t eliminate the need for the AUD 9921 — the FTB will still request it if they want to subpoena banks or employers directly. Conversely, signing the AUD 9921 doesn’t mean the FTB has to route communications through your representative. You still need the POA for that.

If you’ve received both an AUD 9921 and audit initiation notices, set up representation first. File the POA so the FTB must communicate through your CPA, then address the AUD 9921 with that representative in the loop. That sequence matters — responding to the AUD 9921 before you have representation can put you in a weaker position before the audit even starts.

Once you sign an unrestricted AUD 9921, the FTB can request records from banks, brokerage firms, payroll companies, mortgage servicers, escrow companies, and other state agencies — including the IRS if there’s a federal-state discrepancy. California audits frequently focus on Schedule CA adjustments, capital gains from property sales, and income earned while a part-year or nonresident. The records request will target whatever the FTB believes explains the discrepancy.

A critical detail: if your audit involves passive income, rental activity, or S-corporation distributions, the FTB may reach beyond your personal accounts to request records from the entity. Partners and shareholders of California pass-through entities can be pulled into individual audits when the AUD 9921 is signed without restrictions. The 2023 update to FTB audit procedures expanded the types of electronic records — including payment platforms like Venmo and Zelle — that can be subpoenaed under a signed authorization.

Working with a CPA who knows California audit procedure lets you define what records are genuinely at issue. We negotiate scope language, identify what the FTB’s actual concern is before records are turned over, and in some cases, provide the relevant records proactively — which often satisfies the audit without the AUD 9921 ever needing to be signed in its original form.

Ignoring the AUD 9921 won’t make the audit go away. The FTB will proceed using the summons authority under R&TC Section 19504, which allows them to compel production of records from third parties without your consent. Audits where the taxpayer is unresponsive tend to result in Notices of Proposed Assessments based on the FTB’s own estimates — and those estimates are almost always higher than what you actually owe.

The FTB has a four-year statute of limitations for standard audits under R&TC Section 19057, but that clock pauses when you’re unresponsive. Failure to cooperate can also support an extended 8-year statute if the FTB determines there was substantial understatement of income. On top of the underlying tax, California assesses a 25% negligence penalty under R&TC Section 19164 and a 25% late payment penalty — so inaction is expensive.

The moment you recognize you have an FTB audit — whether from the AUD 9921, an AUD 1515A information request, or any other audit notice — the right call is getting a CPA involved immediately. Response deadlines on FTB notices are typically 30 days and aren’t automatically extended. We contact the FTB on your behalf, buy time if needed, and set the audit on a track you can manage.