(a) If the director finds that a claim for refund or credit or portion thereof, including a claim deemed made and denied pursuant to subdivision (a) of Section 1179.5, has been erroneously denied, he or she may reverse the denial of the claim or portion thereof in the following cases:

1. (1) Where no petition for review of denial of the claim has been filed or deemed filed, if the reversal is made prior to the expiration of the period within which a petition for review may be filed under Section 1222.
2. (2) Where a petition for review of denial of the claim is filed or deemed filed, if the reversal is made prior to the mailing of a decision by the administrative law judge.