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If you are a sole-practitioner architect, an architectural engineer, or the member of an architecture firm that is headquartered or does business in California, your bottom line is directly impacted by a complex network of state and federal tax regulations. Get the tailored financial guidance you need: choose an award-winning dually licensed California tax attorney-CPA with over 20 years of experience.
At the Tax Law Office of David W. Klasing, our deep breadth of experience enables us to examine complex tax issues from unconventional, sometimes overlooked angles, delivering the strategic guidance and aggressive representation you need to mitigate penalties and protect your career. From civil tax audits and IRS appeals, to criminal tax investigations, to corporate bookkeeping and accounting services, to business tax planning for architects, rely on the Tax Law Office of David W. Klasing for nuanced counsel and steadfast support.
Why Are Architects or Architectural Firms Chosen for Tax Audits?
Whether you are a solo or self-employed architect, or the member of a small, midsize, or large architectural firm, you can unfortunately expect to be audited at least once during the course of your career. The likelihood of an audit increases if, among other factors:
- You report unusually high or low income, considering your professional background and demographic group
- You have filed multiple delinquent returns and/or made multiple late tax payments
- You owe unpaid taxes to the IRS and/or the state of California
- You have unfiled California and/or federal tax returns, such as unfiled California income tax returns
- You do business with other architects, construction firms, engineering firms, materials suppliers, subcontractors, lenders, or other entities that have recently been audited or are currently being audited
- Your business records and/or tax forms appear to be mismatched, missing, backdated, forged, or otherwise altered or destroyed
- One of your workers reports having been misclassified (i.e. improperly classified as an independent contractor rather than an employee)
- A former worker, former business partner, or another party reports you for suspected tax fraud
See our Audit Representation Q and A Library See our Non-Filer Q and A Library
IRS Tax Audits vs. California Tax Audits (EDD, FTB, CDTFA)
The IRS conducts audits, or “examinations,” of federal tax returns, such as personal and corporate income tax returns. The IRS also performs other types of federal tax audits, such as federal employment tax audits, which are often rooted in worker misclassifications or failures to pay estimated taxesSee our Employment Tax Law Q and A Library It is critical not to neglect state taxes, which can also lead to auditing if noncompliance occurs. If you reside or do business in the state of California, you may be required to file personal or corporate California income tax returns, in addition to complying with other laws contained within the California Revenue and Taxation Code (RTC), which functions as the state’s equivalent of the Internal Revenue Code (IRC). If you do not file or pay the California taxes required of your business, or if you make other tax errors, you or your business may be audited by one of the following agencies, depending on the situation:
- If the noncompliance involves California income taxes, the Franchise Tax Board (FTB)
- If the noncompliance involves California employment taxes, payroll taxes, or alleged worker misclassification, the Employment Development Department (EDD)
- If the noncompliance involves sales and use taxes, or various “special” taxes and fees (such as California’s 1% tax on lumber products, which “affects retailers of lumber products or engineered wood products and purchasers, including construction contractors”), the California Department of Tax and Fee Administration (CDTFA)
See our Sales Tax Q and A library
Can I Appeal the Results of an IRS or California Tax Audit?
Whether due to incorrect applications of the law, misinterpretation of facts, failures to follow IRS protocols, or simple mathematical or administrative errors, audits often produce flawed results –resulting in costly tax bills for the taxpayer. Fortunately, there are ways to dispute the results of an audit, provided the taxpayer meets certain criteria.
The process for challenging the outcome of a tax audit is known as “appeals,” and is managed by either the IRS Independent Office of Appeals, or the California Office of Tax Appeals (OTA) as appropriate. In either case, the heart of the appeals process is the taxpayer’s “opening brief” or “protest letter,” by which the taxpayer provides a detailed, factual, evidence-based overview of his or her disagreement(s) for the tax period(s) and issue(s) in question.See our IRS Appeals Q and A Library See our Tax Litigation Q and A Library
California Tax Lawyers + CPAs for Architects
Architects and architectural firms have unique financial planning, tax compliance, and business bookkeeping needs. Industry-specific tax issues also affect the companies and individuals who hire or partner with architects, such as construction companies, engineering firms, real estate developers, lenders, and investors. For example, how and when can investors use opportunity zones to reduce capital gains taxes? When, and how frequently, must architects file state or federal income taxes? How should architectural firms be structured to protect individual members from liability? And how can architects best capitalize on the many financial opportunities afforded by the Tax Cuts and Jobs Act (TCJA), which was passed toward the end of 2018?
We are here to help you answer these questions, while simultaneously providing you with dedicated audit and criminal tax defense representation. Whether you are facing a civil audit, criminal charges, or simply a challenging business decision, we can protect and advise you effectively. Contact us online right away to set up a reduced rate consultation or call the Tax Law Office of David W. Klasing at (800) 681-1295 today.See our Criminal Tax Law Q and A Library In addition to our staffed main offices in Irvine, the Tax Law Offices of David W. Klasing has unstaffed (conference room only) satellite offices in Los Angeles, San Bernardino, Santa Barbara, Panorama City, Oxnard, San Diego, Bakersfield, San Jose, San Francisco, Oakland, Carlsbad and Sacramento.
Note: If you have concerns about the privacy of our initial or subsequent communication and are unable to easily travel to our Irvine / Orange County Main Office, consider scheduling a GoToMeeting to safely and securely establish an initial or maintain an existing attorney client relationship. With end-to-end encryption, strong passwords and top-rated reliability, no one is messing with your meeting. To schedule a reduced rate initial consultation via GoToMeeting follow this link. Call our office and request a GoToMeeting if you are an existing client. We are generally happy to travel to any of our appointment only satellite offices for a subsequent meeting in appropriate circumstances once a relationship is established via a signed engagement letter and the payment of an initial retainer or where enough retainer is available where a current client to cover the reasonable travel time and time required for the meeting.
Will it cost me more to hire the Tax Law Offices of David W. Klasing, who’s main office and the vast majority of the firm’s staff is located in Irvine California, but an appointment only Satellite office is close to my location, as opposed to a local company? Absolutely not! See our policies that address this issue here
