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Bakersfield taxpayers are subjected to countless IRS and California state tax audits every year. Being selected for a tax audit can be stressful, especially if undisclosed foreign accounts and unreported offshore income-generating assets are involved. Suddenly, the path to compliance narrows, and the potential for severe civil and possibly criminal tax penalties, or even criminal tax prosecution, looms large, particularly if the non-compliance is deemed intentional.
Specific tax compliance requirements affect different groups of taxpayers. For example, in addition to meeting the basic California state and federal income tax filing requirements that apply to most individuals, taxpayers with offshore bank or investment accounts must also obey foreign account disclosure rules. Corporations and other business entities are subject to particularly intricate reporting requirements, including requirements to comply with employment, payroll, and sales tax laws. For many taxpayers, the passage of the Tax Cuts and Jobs Act (TCJA) has further complicated compliance efforts by introducing new and overhauled tax regulations.
How Can the IRS Voluntary Disclosure Practice and California’s Programs Aid Bakersfield Taxpayers?
If you’re in Bakersfield and realize that you could face criminal tax prosecution over a history of blatantly cheating on your tax returns if discovered, voluntarily disclosing this history by knocking on the IRS’s door before they bang down your door is the most crucial step towards resolution without facing criminal tax prosecution.
At the Tax Law Offices of David W. Klasing, Our dual-licensed Bakersfield Voluntary Disclosure Attorneys & CPAs offer experienced guidance through the IRS Voluntary Disclosure Practice (VDP). This program is crucial for individuals who have willfully understated their federal tax liabilities. It provides a systematic and secure avenue to rectify their tax status while avoiding criminal tax prosecution. Similarly, the State of California’s Franchise Tax Board (FTB) and the California Department of Tax and Fee Administration (CDTFA) provide methods for non-compliant taxpayers in Bakersfield to regain compliant status by coming forward with the details of their failure to comply with the California state tax code. We are dedicated to assisting in making sincere, comprehensive, and timely disclosures to the IRS and California state tax authorities, which includes arranging for the payment of owed taxes, interest, and penalties and cooperating with the tax agencies to determine the correct tax liability.
Contact us online today to arrange a reduced-rate tax consultation or call our Bakersfield tax office at (661) 452-8820 to get started. Please note that meetings at our Bakersfield satellite location are by appointment only.
Let Our Bakersfield Tax Attorneys Start Working for You Today
If you have failed to file a tax return for one or more years or have taken a position on a tax return that could not be supported upon an IRS audit, eggshell audit, reverse eggshell audit, or criminal tax investigation, it is in your best interest to contact an experienced dual-licensed tax attorney CPA to determine your best route back into federal tax compliance without facing criminal prosecution.
Note: As long as a taxpayer that has willfully committed tax crimes (potentially including non-filed foreign information returns coupled with affirmative evasion of U.S. income tax on offshore income) self-reports the tax fraud (including a pattern of non-filed returns) through a domestic or offshore voluntary disclosure before the IRS has started an audit or criminal tax investigation/prosecution, the taxpayer can ordinarily be successfully brought back into tax compliance and receive a nearly guaranteed pass on criminal tax prosecution and simultaneously often receive a break on the civil penalties that would otherwise apply.
You must hire an experienced and reputable criminal tax defense attorney to take you through the voluntary disclosure process. Only an Attorney has the Attorney-Client Privilege and Work Product Privileges that will prevent the very professional that you hire from potentially being forced to become a witness against you, especially where they prepared the returns that need to be amended in a subsequent criminal tax audit, investigation or prosecution.
Moreover, only an Attorney can enter you into a voluntary disclosure without engaging in the unauthorized practice of law (a crime itself). Only an Attorney trained in Criminal Tax Defense fully understands the risks and rewards involved in voluntary disclosures and how to protect you if you do not qualify for voluntary disclosure.
As uniquely qualified and extensively experienced Criminal Tax Defense Tax Attorneys, KovelCPAs, and EAs, our firm provides a one-stop shop to efficiently achieve the optimal and predictable results that simultaneously protect your liberty and net worth. See our Testimonials to see what our clients have to say about us!
Understanding Domestic and Offshore Voluntary Disclosure
In the intricate landscape of U.S. tax compliance, taxpayers who suspect they’ve intentionally committed federal tax crimes face a crossroads with three potential paths. The first, albeit risky, is to maintain the status quo, hoping the IRS doesn’t detect the discrepancies. This approach, however, carries the looming threat of criminal tax penalties, including substantial fines and possible imprisonment.
Is Quiet Disclosure a Viable Option for Correcting Tax Returns?
The second option is to amend prior tax returns, known as “quiet disclosure.” While this process includes settling any due taxes, accrued interest, and self-assessed penalties, it doesn’t offer immunity/amnesty from potential severe penalties, including criminal tax charges, if the IRS identifies willful misconduct. Our dual-licensed Attorneys and CPAs generally advise this course of action only when the inaccuracies on your return are minor and unintentional because the amended returns themselves can be viewed as a criminal tax admission.
How Can the IRS Voluntary Disclosure Program Help Me?
Entering the voluntary disclosure program is the third option if you suspect you have committed a tax crime. While this system is built on trust, it has stringent repercussions for those found deliberately evading their tax obligations. An honest miscalculation or oversight in tax reporting is one thing. However, intentionally underreporting income, exaggerating deductions, or claiming unmerited credits is a grave matter, potentially leading to criminal tax prosecution.
The act of voluntary self-disclosure carries numerous potential benefits that extend beyond mere compliance with regulatory requirements. Voluntary self-disclosure can be a strategic tool in a company’s broader compliance program by promoting transparency, enhancing reputation, mitigating risks, and possibly reducing penalties.
What Are the Consequences of An IRS Review of My Tax Returns?
Should the IRS decide to review your tax returns, the consequences can vary based on the nature of the discrepancies. A mere oversight might result in a 20% negligence penalty on any additional tax you owe, plus interest. However, if the IRS determines evidence of intentional/deliberate tax fraud, you could face a 75% civil fraud penalty on the extra tax assessed. In the most severe cases, this could escalate to criminal tax prosecution, potential imprisonment, and restitution for willful tax crimes. For green card holders, this could even lead to deportation post-incarceration. Additionally, there is a high risk of professionals losing their relevant licenses due to these convictions.
What Should I Do If the IRS Has Already Started an Investigation?
However, if the IRS has initiated an audit, received a tip-off about your discrepancies, or issued a subpoena, the window for a voluntary disclosure might have closed. Consulting our dual-licensed Criminal Tax Defense Lawyers & CPAs would be wise in such scenarios. We will swiftly evaluate your tax compliance, liaise with the IRS, and work diligently to minimize your criminal tax exposure, whether you’re facing a Standard Civil Audit, Eggshell Audit, Reverse Eggshell Audit, or a Criminal Tax Investigation.
Does California Offer a Way for Non-Compliant Taxpayers to Regain Compliance?
Like the IRS, the State of California’s Franchise Tax Board (FTB) and the California Department of Tax and Fee Administration (CDTFA) provide a method for non-compliant taxpayers to regain compliant status by coming forward with the details of their failure to comply with the California state tax code. The path to voluntary disclosure to the FTB depends on whether you are an in-state or out-of-state filer.
How Can the Tax Law Offices of David W. Klasing Help Me?
If you get ahead of the curve by disclosing your mistakes to the IRS and relevant California tax agencies (where appropriate) before they come after you with an audit or criminal tax investigation, there is a good chance you will avoid the most severe penalties you could face. At the Tax Law Offices of David W. Klasing, our experienced Bakersfield tax attorneys can help you determine which program gives you the best chance of being brought back into tax compliance with minimal trouble. Then, we can protect your rights through the process. Contact us online today to arrange a reduced-rate tax consultation or call our Bakersfield tax office at (661) 452-8820.
We skillfully navigate the complexities of various federal and California state voluntary disclosures, including domestic, offshore, CDTFA, and FTB voluntary disclosures, streamlined procedures, and delinquent FBAR and international information return submission procedures. Over the past 15 years, our firm has guided countless clients through domestic and offshore voluntary disclosure programs. Throughout our extensive experience, no client has faced criminal tax prosecution after making a voluntary disclosure. Instances of the IRS prosecuting those who’ve made such disclosures are rare. On the few occasions it has happened, it’s typically because the taxpayer was dishonest during the disclosure process.
Our Bakersfield Office is Conveniently Located at:
4900 California Ave Tower B, 2nd Floor,
Bakersfield, CA 93309
(661) 432-1480
