Awards & Recognition
In Bakersfield’s dynamic and rapidly growing industry, navigating the intricate web of California state tax laws and the IRS demands exceptional expertise. Here, in the heart of Kern County, where agriculture and energy industries drive economic activity, and the Franchise Tax Board (FTB), California Department of Tax and Fee Administration (CDTFA), and Employment Development Department (EDD) maintain vigilant oversight, having an experienced strategic ally is crucial. Bakersfield’s unique economic landscape presents distinct state tax challenges, requiring an experienced attorney deeply attuned to the region’s dynamics and the complexities of California’s tax system. Whether you’re dealing with the repercussions of unfiled state taxes, preparing for an impending state tax audit, or deciphering complicated California tax regulations, the necessity of a proficient ally in this critical economic region cannot be overstated.
A tax audit, also known as an “examination,” can be initiated by the IRS, FTB CDTFA (formerly BOE), or EDD depending on whether the issue in question pertains to federal taxes, such as an IRS audit for federal income tax evasion, or state taxes, such as a California sales tax audit for evasion of sales tax. Tax audit procedures vary depending on factors like why the audit is being conducted, what type of audit is being undertaken (e.g., field audits versus desk audits), and the nature and severity of the issue or error underlying the audit (e.g., a negligent or purposeful and substantial understatement of income). While these factors vary, one variable never changes: the auditor’s goal is to uncover any crime or error, however minor, that may have occurred in your past. Depending on the issue, the statute of limitations may give the auditor three years, six years, or unlimited time to examine your records.
If you or your business has been selected for a California tax audit by the FTB, CDTFA, EDD, or another state agency, you face the risk of costly tax assessments, interest charges, and civil penalties – or even referral for criminal tax prosecution. If you find yourself stressed by the various tax situations you’re facing, the last thing you want to do is complete tax forms without fully understanding what you are doing. And don’t just assume California state and federal tax forms require the same information, as they may be significantly different, which causes further confusion for some Bakersfield taxpayers. Call (661) 432-1480 or 888-904-4096 or contact us online today to schedule a reduced rate initial consultation at our Bakersfield tax law offices or one of our other convenient locations across Southern California.
California Franchise Tax Board (FTB) Audit Representation in Bakersfield
What is an FTB Audit?
The California Franchise Tax Board (FTB) audits California’s personal and business income tax filings. These audits can follow on the heels of an IRS audit and also can:
- Be conducted entirely independent of any IRS enforcement action;
- Often involve California-specific differences from federal tax law that may have been ignored or misapplied.
How Can You Fight an FTB Audit?
Often, the best way to fight a guaranteed bill from the FTB following an IRS audit is by prevailing in the IRS audit initially. At the Tax Law Offices of David W. Klasing, we will help you:
- Reopen a federal audit through a process called audit reconsideration;
- Appeal or litigate both federal and California state tax audits.
What if the FTB Conducts Its Own Audit?
Sometimes, the FTB conducts its own audits related to issues specific to California law. We will help you understand the differences between federal and California tax laws and the various methods of supporting your California tax position. Our dual-licensed California State Tax Attorneys and CPAs will also help you appeal or litigate any California assessments of additional tax penalties and interest you believe are unfair.
What if You Owe Back Taxes to the FTB?
Due to differences between federal and California state laws, you may owe back taxes to the FTB even if an IRS audit finds you did not owe anything to the federal government. If you do indeed owe back taxes, we will help you:
- Negotiate with the FTB to work out a reasonable payment plan or other collection alternatives;
- Help you minimize or avoid penalties and interest.
Why Should You Never Ignore an FTB Notice?
It is never prudent to ignore an FTB notice, even if you disagree with its findings or are unsure precisely what the notice references. Ignoring notices can lead to:
- Accruing interest on any unpaid tax debts until your debt is satisfied;
- Escalating issues, making them more complicated and costly to resolve later.
California Department of Tax and Fee Administration (CDTFA) Audit Representation
The California Department of Tax and Fee Administration (CDTFA) conducts audits on the improper collection or remittance of California sales taxes. The rules regarding how much a business must charge in sales tax vary depending on the locality and the type of product you are selling. CDTFA often conducts random audits of companies where sales tax issues are common, such as the restaurant and bar industry. It is not a matter of whether you will be audited; it’s a matter of when. The CDTFA is famous for placing a hold on any escrow proceeds and holding them hostage while they slowly complete a sales tax audit on any business sold in California.
These types of audits are very invasive, as the auditor will want to look at your entire history of sales to ensure you are not failing to collect sales taxes when you should be, and can be your worst nightmare if you’re in the habit of pocketing cash sales. They will also look at scenarios where you collect sales taxes but do not appropriately remit them to the state. Severe penalties and criminal tax charges can apply if the CDTFA determines you have been deliberately underpaying sales taxes. The CDTFA will also compare the sales of your report for sales tax purposes to those of your report for income tax purposes and will resort to a markup audit if they do not believe your records reflect cash sales. A tax lawyer will be able to help you prepare a defense and file any necessary documents, such as a petition challenging an incorrect finding, promptly so that you do not lose your right to appeal.
Recently, the CDTFA issued updated guidance on protocols and procedures for disputing, or “appealing,” CDTFA determinations. Though the CDTFA tries to provide clear instructions for taxpayers, it is not recommended to attempt handling an appeal without professional tax representation. It is in your best interests to consult our experienced dual-licensed Bakersfield CDTFA Audit Attorneys & CPAs before filing an appeal or petition for redetermination due to the legal and financial complexity involved.
California Employment Development Department (EDD) Audit Representation
The California Employment Development Department (EDD) conducts audits related to payroll taxes that businesses must pay. Employers must take a certain amount in payroll taxes from each employee’s paycheck and remit them to the proper California state and federal agencies. If you fail to collect or adequately remit such taxes, you could face back taxes and potential fines and penalties.
The most common issue in EDD audits relates to classifying workers as employees vs. independent contractors, especially considering California’s recent legislation in AB5. Employers must collect and remit payroll taxes from employees but not from independent contractors who work for them. Many complex rules govern who can and cannot be an independent contractor in California. A tax attorney can help you properly classify your employees and prove to the EDD that any misclassifications you made were unintentional. Our experienced Bakersfield EDD Tax Audit Attorneys & CPAs can help gather evidence to show the EDD you have correctly classified workers as independent contractors.
California State Tax Audit Lawyers and CPAs in Bakersfield
If you or your business was chosen for an FTB tax audit, CDTFA tax audit, or EDD tax audit, you must take swift action to protect your rights and thoroughly prepare for the examination. At the Tax Law Offices of David W. Klasing, we have nearly three decades of tax audit experience, including more than a decade of auditing experience. Our dual-licensed Bakersfield California State Tax attorneys and CPAs pride themselves on providing responsive, insightful audit representation for businesses and individuals, including expats, non-citizens, and online companies.
Our objective is to protect your rights and support your best interests at all stages of the California audit process, negotiating with auditors to achieve a cost-efficient resolution while bringing you into compliance with federal and California state tax law. We will be of invaluable assistance to you with the appeals process to challenge an unfair or inaccurate tax assessment should you disagree with the initial results of your audit. For help with the Bakersfield tax services you need, contact the Tax Law Offices of David W. Klasing today to schedule a 10-minute call with an experienced attorney. We can handle any tax situation you may encounter at the California state, federal, and international levels.
With an impeccable “A+” rating from the Better Business Bureau and a pristine 10.0 score from AVVO, David W. Klasing’s commitment to premier California state tax audit representation remains steadfast and unyielding. To offer a clearer perspective on our exceptionalism, consider this: In the vast expanse of over a million attorneys and upwards of half a million CPAs in the U.S., only approximately 24,000 professionals can boast of being dually-licensed Attorney CPAs. Further narrowing down this elite group, a scant 3,000 have the rare distinction of having earned a Master’s in Taxation. David W. Klasing, an integral part of this select league, harnesses his unparalleled education and decades of hands-on experience to champion our clients’ Bakersfield tax defense challenges. For a reduced-rate initial consultation about professional tax services in Bakersfield, California, contact the Tax Law Office of David W. Klasing online or call our tax firm at (888) 310-3543 today.
Our Bakersfield office is conveniently located at:
4900 California Ave Tower B, 2nd floor,
Bakersfield, CA 93309, United States
(661) 432-1480
