Rev. & Tax. Code, § 864

(a) Property which is found to have escaped assessment may either be added to the roll for the fiscal year in which it is discovered or included with the assessments for the succeeding fiscal year. To the escaped assessment, there shall be added, in lieu of interest, three-quarters of 1 percent of the escaped assessed value for each month or fraction thereof from December 10 of the year in which the escaped assessment should have been enrolled to the date the escaped assessment is added to the board roll; provided, however, that an assessment in lieu of interest shall not be added if the escape was due to an error, other than an erroneous opinion of value, on the part of the board. The property shall be taxed at the rates applicable to assessments on the roll to which it is added.

(b) If the escaped assessment is made as a result of an audit which discloses that property assessed to the party audited has been excessively assessed for any year covered by the audit which falls within the period provided for corrections under Section 4876, the excessive assessments together with any assessment in lieu of interest under subdivision (c) shall be an offset against proposed escaped assessments, including accumulated penalties and additional assessments in lieu of interest. If the excessive assessments exceed the escaped assessments, including penalties and assessments in lieu of interest, the excess may either be credited to the roll for the fiscal year in which it is discovered or deducted from the assessment for the succeeding fiscal year.

(c) Whenever the excessive assessments were due to clerical errors or other errors by the board not involving exercise of judgment, there shall be added, in lieu of interest, three-quarters of 1 percent of the excessive assessment for each month or fraction thereof, from December 10 of the year in which the excessive assessment was enrolled to the date the excessive assessment is credited to the board roll or to the date the excessive assessment is deducted from the assessment from the succeeding fiscal year, as provided in subdivision (b).