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    The Tax Law Offices of David W. Klasing

    For any of your tax planning compliance and controversy needs in Carlsbad, contact the Lawyers at The Tax Law Offices of David W. Klasing today. Our experienced Tax Lawyers offer a reduced-rate consultation on new cases or engagements. Call (760) 338-7035 or 800-681-1295 or contact us online today to schedule a reduced rate initial consultation at our Carlsbad tax law offices, or at one of our other convenient locations across Southern California.

    Carlsbad Tax Dual-Licensed Attorney and CPA

    Many businesses and individuals in Carlsbad work in non-traditional areas of the economy, some of which serve clients around the state, country and world. The diverse sources of income available for these businesses often lead to unusual tax situations that are best addressed with the assistance of Carlsbad tax services.

    If, after filing your taxes, you are audited by the IRS or the California state tax authority, you may find yourself in need of a civil or criminal tax defense.

    Don’t lose sleep over your tax problems. Whether you are an investor, business owner, S corporation, C corporation, partnership, LLC, sole proprietorship, non-profit organization or other entity in or around Carlsbad, finding skilled tax attorneys, CPAs, and EAs in Southern California to help manage your tax situation is essential.

    When you need help with any Carlsbad tax services, contact the Tax Law Offices of David W. Klasing today to schedule a 10-minute reduced rate initial consultation with experienced dual-licensed Carlsbad Tax Attorneys and CPAs. We have licensed Tax Attorneys, CPAs, and EAs on staff and are ready to provide financial and legal guidance for any business or individual needs. Let us alleviate your troubles with California or Federal tax authorities.

    One of The Best Tax Audit Attorneys in Carlsbad

    You may feel like you are a brave person who has a handle on fear. Then you receive an official letter, notifying you of an IRS or California state tax audit, and you have a new respect for fear. Failure to comply with California state or federal tax laws can have dire legal, financial, and professional consequences. Likewise, inadvertently overlooking or misunderstanding details of the U.S. Tax Code can deprive the taxpayer of advantageous credits, deductions, or exemptions, while making it more difficult to engage in advantageous tax planning. Whether you need to defend yourself against a criminal tax investigation/allegations of criminal tax wrongdoing, or simply have questions about how to make the most advantageous use of the Tax Code for your business or your family, rely on the award-winning and dual-licensed Carlsbad Tax Audit Lawyers and CPAs at the Tax Law Office of David W. Klasing for unparalleled client service with a focus on risk mitigation and wealth preservation.

    The Tax Law Office of David W. Klasing is a full-service boutique tax law firm comprised of tax attorneys and CPAs, many of which have Master’s Degrees in Taxation or LLM’s in Tax, who combine decades of experience in all areas of tax law, ranging from international and business tax to criminal tax defense and high dollar civil and high risk egg shell audit representation.Our strategic interventions aim to curtail your tax liabilities and safeguard you from potential civil or criminal tax repercussions. From meticulously managing amended tax returns to handling intricate IRS home, office, correspondence, eggshell, or reverse eggshell tax audits, we always place your interests at the forefront, ensuring minimized risks and solutions tailored to your needs.

    With offices conveniently located to serve residents of Carlsbad and the surrounding communities, such as Oceanside, Vista, and Encinitas, our California tax firm has established a sterling reputation for providing trustworthy, efficient, and results-oriented tax guidance for investors, business owners, S corporations, C corporations, partnerships, limited liability companies (LLCs), sole proprietorships, non-profit organizations, and other entities or individuals facing complex tax questions and controversies. For a reduced-rate initial consultation tax services in Carlsbad, contact our law offices online, or call the Tax Law Office of David W. Klasing at (760) 338-7035 or (800) 681-1295 to schedule an appointment.

    Our founder and principal attorney, David W. Klasing, possesses decades of experience as a former auditor in public accounting and has represented clients in federal (IRS) and California (FTB, CDTFA (BOE), EDD) audits for nearly three decades, enabling our tax team to navigate the audit process with precision and skill. Types of federal and California state tax audits in which we provide representation include (but are not limited to) the following:


    International Tax Services in Carlsbad

    If you have investments, assets, offshore business accounts, retirement accounts, checking accounts, or other financial accounts held with financial institutions overseas, you may be subject to U.S. laws requiring you to provide appropriate international information reporting and pay U.S. taxes on global income. Failure to comply with these requirements will subject you to civil and potentially criminal tax and foreign information reporting penalties, depending on whether the noncompliance is gauged to be “willful” or merely negligent, by the Internal Revenue Service (IRS).

    Even if you are already in compliance with the tax law, you may be sustaining needless financial losses due to double taxation. Fortunately, this is a common tax issue that can be corrected or ameliorated through thoughtful and meticulous international tax planning.

    Whether you are concerned about an unmet requirement to report foreign income or have questions about how to minimize the impacts of double taxation, it is in your best interests to discuss the issue with an international tax attorney as soon as possible – ideally before receiving any notices from the IRS. If you wait to act until after you have already been contacted by the IRS, you will have fewer (and less favorable) options for resolving the problem. However, no matter how complex or difficult the situation, rely on our international tax lawyers for skillful, financially sound guidance.

    If you’re engaged in international business or managing foreign assets, navigating the complex landscape of global taxation is crucial to success. At the Tax Law Offices of David W. Klasing, our team of dual-licensed Domestic and International Tax Attorneys & CPAs in Carlsbad, CA is poised to protect your interests. Whether you’re an American expatriate or have multiple offshore business entities and investments, we provide meticulous attention to ensure your international tax dealings are reported with precision and foresight. Our association with Marc Schwartz, a dually licensed International Tax Attorney and CPA, greatly enhances our ability to address the often complex federal offshore tax planning, compliance, and controversial implications surrounding engaging in international business and the associated mandatory information reporting.

    Furthermore, Our Carlsbad FinCEN Form 114 Attorneys & CPAs specialize in guiding taxpayers through the intricacies of FinCEN Form 114, a mandatory IRS form for reporting offshore bank & financial accounts. Our award-winning team, with a long track record in international tax representation, ensures compliance, safeguards your legal rights, and strategizes to minimize IRS civil and criminal tax and foreign information reporting penalties. Contact our Carlsbad office at 760) 338-7035 or (800) 681-1295 or contact us here online for assistance on the following:

    Carlsbad Criminal Tax Defense Attorneys

    The IRS routinely works with state agencies, such as the California Franchise Tax Board (FTB), as well as other federal agencies, such as the Department of Justice (DOJ) and Federal Bureau of Investigation (FBI), to investigate taxpayers who are suspected of misdemeanor or felony tax crimes. These investigations occasionally arise from tax audits of taxpayers, but can also be triggered for reasons ranging from failure to file to selection by fraud detection units.

    Our criminal tax defense attorneys and tax evasion lawyers are qualified to handle criminal tax proceedings in state and federal court in California. In addition to cases involving willful failure to file a tax return, we also handle tax charges including but not limited to:

    • 26 U.S. Code § 7202 – Willful failure to collect or pay over tax
    • 26 U.S. Code § 7206 – Fraud and false statements
    • 26 U.S. Code § 7212 – Attempts to interfere with administration of Internal Revenue laws
    • 18 U.S. Code § 371 – Conspiracy to commit offense or to defraud United States

    We are very adept at diffusing the potential criminal tax exposure that often comes to the surface in a highly contested divorce or where a business is sold. Engaging the services of our Carlsbad Dual Licensed Criminal Defense Attorneys & CPAs at the onset of a high-risk audit / criminal tax investigation will maximize the possibility of a favorable outcome without escalating to criminal tax charges. We have never had a federal or California audit client criminally prosecuted for tax crimes. When facing tax audits from agencies like the IRS, CDTFA, EDD, or FTB, certain red flags, such as destroyed records, underreported income, badges of fraud, or unfiled returns, can intensify the examination, and may lead to high-risk eggshell and reverse eggshell tax audits. As such, residents and businesses must be aware of potential criminal tax violations and the signs indicating that they might be under a more rigorous investigation by the IRS’s Criminal Investigation Division (CID). This is especially so when the taxpayer has a history of blatantly cheating on their federal tax returns and is now under audit and thus fears criminal tax prosecution.

    We will help you avoid being blindsided by a criminal tax investigation, mitigate existing risks, and protect your rights as necessary. In addition to tax deficiency payments plus interest, audits can result in additional financial penalties, criminal tax charges, increased future scrutiny, and, worst-case scenario, prison time. These can be huge consequences for a taxpayer. Do not face these risks alone – ask our dual-licensed Carlsbad Criminal Tax Audit Attorneys & CPAs for help today. We are here to provide aggressive, informed representation in areas including:


    Get Back into Tax Compliance without Facing Criminal Tax Prosecution In Carlsbad

    The IRS conducts many audits every year. Once you have been selected for federal or California state audit and have undisclosed foreign accounts and unreported offshore income-generating assets, your options to get yourself back into compliance become extremely limited, and you could end up facing severe civil and even criminal tax penalties and or criminal tax prosecution, especially if your conduct were willful concerning any non-compliance with income tax or foreign information reporting. If you’re in Carlsbad 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.

    Our dual-licensed Carlsbad Voluntary Disclosure Attorneys and CPAs 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. As long as a taxpayer who has willfully committed tax avoidance (potentially including non-filed foreign information returns coupled with affirmative evasion of U.S. income tax on offshore income) self-reports the federal tax non-compliance 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. We deal with:


    Carlsbad Employment, Payroll, and Business Tax Services

    Employers, business owners, stakeholders, board members, and others have special tax obligations under state and federal tax laws. For example, employers in Carlsbad are generally required to withhold and remit payroll taxes, namely Social Security and Medicare taxes, or be subject to, at best, trust fund recovery penalties and potentially, at worst, criminal tax prosecution where employment taxes are found by the IRS or FTB / EDD to have been willfully evaded.

    If you own or operate a company in Carlsbad, outside of California, or even outside of the United States, it is imperative that you consult with a knowledgeable, skilled, and experienced Carlsbad Corporate Tax Attorney + CPA to ensure that you are fulfilling your legal duties while taking advantage of the Tax Code. Equipped with nearly three decades of experience assisting small, mid-size, and large businesses with all aspects of California state, federal, and international tax planning and compliance, the award-winning tax professionals at the Tax Law Office of David W. Klasing are ready to provide comprehensive guidance, aggressive representation, and an unparalleled level of customer service. If you need advice or assistance concerning employment or business taxes, look to our tax firm for help you can trust. Click on the following to learn more:

    In addition to the myriad (and often confusing) tax requirements to which business owners and business entities are subject, entrepreneurs must also consider the tax ramifications of each and every business decision throughout the life of the entity, beginning with strategic entity selection before the company is even launched. At the Tax Law Office of David W. Klasing, we possess the cutting-edge, up-to-date tax knowledge you need to make the most of every opportunity, including updates to the Tax Code under the Tax Cuts and Jobs Act (TCJA) enacted December 2017. We provide services including, but not limited to, the following:

    Carlsbad IRS, FTB, CDTFA (BOE) and EDD Tax Audit Representation

    Tax audit” may be one of the most dreaded phrases in the English language. However, with a skilled and aggressive California and IRS tax audit attorney negotiating and advocating on your behalf, there is no need to approach the process from a position of fear or anxiety. Not only have we helped thousands of taxpayers emerge from examination with considerably reduced penalties, interest, or other tax liabilities – in addition, our IRS audit and appeals lawyers have also represented countless taxpayers in all stages of the appellate or “protest” process, which is the process of challenging an audit outcome with which you disagree. We stand ready willing and able to litigate any tax issue where the law and facts are squarely on your side, but we have a track record of advantageously settling all our extensive Tax Litigation to date, prior to our clients having to incur the astronomical costs of a trial.

    The IRS routinely conducts audits on individual, business, trust, estate and offshore federal information and tax returns. Many IRS audits are conducted at random, but the vast majority are conducted because a computerized statistical review of your tax returns triggered an audit. Issues that may trigger an audit include suspicion of underpaid taxes, suspicion of underreporting of assets and income, and suspicion that you are claiming excess exemptions, credits or deductions for which you do not actually qualify. While a typical IRS audit can look back over 3 years of your tax returns and related documents, sometimes the IRS will be permitted to look back 6 years or even back to the dawn of time.

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    Types of IRS, FTB, EDD & CDTFA Audits

    When you receive your notice letter indicating the California or Federal government’s plans to audit you or your small to middle market business, you will discover which type of audit the IRS, FTB, EDD or CDTFA will use. There are three basic types of audits: correspondence audits, office audits, and field audits. Each is conducted differently and comes with varying implications of severity. There are also two types of clandestine audits where criminal tax exposure is an issue: eggshell audits and reverse eggshell audits. These especially risky audits are defined by one party knowing or suspecting incriminating information the other party does not know. Taxpayers should be particularly cautious if a suspected eggshell audit or reverse eggshell audit is occurring since such cases can quickly be referred for criminal tax investigation & prosecution.

    Correspondence Audits

    Correspondence audits, or “mail audits,” occur remotely, making them the least invasive form of government tax inquiry. You will receive a letter from the IRS, FTB, EDD or CDTFA asking you to provide information such as financial records and documents to substantiate the positions taken on your tax returns You then send this information to the agents through a mix of traditional mail, e-mail, fax, and telephone communication. A tax lawyer can help you organize or even reconstruct your records and can work to correct any mistakes made on the original returns in a manner that keeps the audit about money and not about potential jail time. If resolved appropriately, correspondence audits usually last no longer than three to six months.

    Office Audits

    An office audit is different from a correspondence audit in that the letter you receive will ask you to bring the requested documents and records into an IRS, FTB, EDD or CDTFA office for review. You will also likely be interviewed by IRS agents, which can be trying and stressful without the presence of legal counsel. You should consult with a dual licensed Tax Attorney & CPA who can help you prepare and accompany you to this meeting, or better yet, appear on your behalf, where they will be able to use their experience to make your case. Similar to correspondence audits, office audits usually conclude within three to six months of your visit date.

    Field Audits

    A field audit is the by far the most serious type of audit and is often reserved for cases where serious civil and even potential criminal tax charges are possibly being considered. In a field audit, the agents will come to your home or place of work to review your records in person. They will often attempt to reconcile your perceived standard of living against your return filing pattern. Field audits are particularly common in situations where multiple business entities complicate the government’s assessment. These processes may last over a year. Field audits involve more than a simple review of the business or financial records. The IRS may interview employees of a business they are auditing or request to tour facilities belonging to that business. Since the IRS will have access to a large amount of information from multiple sources, it can be difficult to control what information the IRS discovers. To minimize the damage and get your case resolved as soon as possible, you should contact a tax lawyer as soon as you learn of the government’s plans to institute a field audit against you.

    An office audit is like a correspondence audit, except the letter you receive will ask you to bring the requested documents and records into an IRS office for review. You will also be interviewed if you do not hire a representative. You should consult with a Tax Attorney who can help you prepare and accompany you to this meeting, or better yet, appear on your behalf, where they will be able to use their experience to negotiate on your behalf. A field audit is the by far the most serious type of audit and is often reserved for cases where serious civil and even potential criminal tax charges are possibly being considered. In a field audit, the agents will come to your home or place of work to review your records in person. They will often attempt to reconcile your perceived standard of living back against your return filing pattern. You should contact a Tax Lawyer as soon as you learn of the possibility of a field audit occurring.

    For information about other aspects of the audit process, readers may be interested in our related audit articles, which explore topics such as:

    Eggshell Audits

    An eggshell audit occurs when the taxpayer, and potentially their representative, is aware of intentional material misstatements on a tax return under audit, but the IRS representative is unaware. This puts them in a delicate position where they need to walk on eggshells, metaphorically, to avoid facing criminal tax investigation & prosecution.

    For example, assume your 2020 tax returns have been selected for an audit. While reviewing the requested documentation, you realize that the tax preparer understated your annual income by over $100,000. In this situation, the auditor is not suspicious yet; they are performing a routine audit and not searching specifically for understated income. Unfortunately, you are aware that there is material understatement in the return that could be viewed as fraudulent by the auditor.

    Fortunately, in the example above, the understatement was not intentional, but there still could be consequences when the error is discovered. In cases of mere negligence, the taxpayer can face a 20% negligence penalty. In cases where willful intent is found, the taxpayer could face a 75% fraud penalty and potential jail time. When such widely differing potential ramifications are on the line, it is prudent to quickly address misstatements found in tax returns, regardless of whether they were intentional or not.

    During an audit, the IRS representative will look for any intentionally false information or truthful omission on a tax return that affects a filer’s true accurate and complete tax liability. Many issues could catch an auditor’s attention. Understatements of income, overstatements of deductions, inappropriately claiming tax credits, or not disclosing offshore accounts are a few common issues that will catch the auditor’s attention and potentially result in a criminal tax referral. The IRS has paid particular attention in recent years to undisclosed offshore accounts especially where the taxable income was consistently deposited to it but erroneously or intentionally went unreported for U.S. tax purposes. If you have money or income generating assets & businesses being deposited to undeclared offshore accounts, seeking counsel on any required omitted foreign information and income tax noncompliance will prevent potential criminal tax exposure that would surely arise where discovered in a subsequent audit as long as you are willing to knock on the governments door before they knock on yours.

    Additionally, an unintended criminal tax admission will provide clear cause for the auditor to refer your case for criminal tax investigation. Eggshell audits present this risk since the taxpayer will have information that the IRS does not. It will be crucial to respond fully to IRS requests while avoiding unnecessary details that could incriminate you. A tax audit attorney can help you avoid this scenario by counseling you on appropriate responses to IRS inquiries.

    What can a taxpayer do if an eggshell audit is suspected? The first step is to engage our dual-licensed Tax Attorneys & CPAs and disclose your concerns safely under the attorney client privilege. Your attorney is under a duty of loyalty to help you as a client, so they must understand all relevant facts. Complete candor is the best route to ensure your attorney has all relevant information. When your tax preparer is at fault for the problems on your tax return, distancing yourself from that preparer would be beneficial as they are likely to be government witness number one in any subsequent criminal tax prosecution. Your attorney will analyze your circumstances and the evidence at issue and work with you to determine the appropriate next steps.

    Reverse Eggshell Audits

    An eggshell audit is “reversed” when the IRS has information regarding potential tax fraud, but the taxpayer does not know this. An IRS revenue agent must usually halt a civil audit when they find clear indications of fraud. With increasing frequency criminal tax investigations are disguised as civil tax audits. In such a case, the IRS auditor will attempt to collect criminal tax evidence and pass it on to the undisclosed criminal tax investigator or civil fraud advisor without the taxpayer’s, or their representative’s knowledge.

    A key challenge with reverse eggshell audits is identifying one. Our dual-licensed Tax Attorneys & CPAs have assisted many clients with IRS audits and can easily spot the warning signs. A few common signs that criminal fraud is suspected are listed below.

    • The IRS agent might begin asking why certain decisions were made. Lines of questioning that ask about the taxpayer’s intent signify that criminal tax fraud is suspected and is being investigated;
    • The civil audit will be suspended when it has not yet been concluded. The auditor may become suddenly and inexplicably unreachable;
    • The IRS agent may conduct a net worth analysis. A net worth analysis compares your estimated net worth with the calculated net worth based on your tax returns. A net worth analysis is a significant risk during a field audit where the auditor visits the taxpayer’s home or business. If your actual standard of living exceeds the income stated on your tax return, the IRS will suspect unreported income;
    • The auditor may ask for excessive documentation or make numerous copies of the documentation provided;
    • The IRS agent may reach out to third parties, like a bank or a business supplier, without notifying the taxpayer;
    • The IRS agent may begin making audio or video recordings of audit interviews, and
    • The taxpayer may receive a summons for an appearance or records. A formal summons instead of a simple request signifies a more serious criminal investigation.

    Reverse eggshell audits are increasing in frequency as opposed to traditional criminal tax investigations because when taxpayers are not notified that they are under criminal tax investigation they cannot adequately defend against the allegations or utilize constitutional protections that are available to potentially remove the evidence from consideration by criminal tax defense counsel. Taxpayers that are read Miranda like warnings by agents wearing guns and badges from the IRS Criminal Investigations division will ordinarily hire competent criminal tax defense counsel. To compound this risk even more, Taxpayers that believe they are only facing a standard civil tax audit will quite often have the original preparer represent them in the audit. The original preparer will either be complicit in the fraud and will thus have a motivation to bury the client in an attempt to stay out of jail themselves or will bury the client in an attempt to protect their own reputation if they were not complicit in the fraud.

    Hiring our dual-licensed Tax Attorneys & CPAs at the beginning of an audit allows us to monitor the audit and look for signs of a potential clandestine criminal tax investigation. We excel at defending against allegations of criminal tax fraud and to the date of this writing have not had an audit client face federal or state criminal tax charges. In cases of eggshell or reverse eggshell audits, the audit can evolve into criminal tax issues very quickly. Using our dual licensed Tax Audit Attorneys & CPAs to quickly identify criminal tax exposure and then mitigate the risk created by them is your absolute best chance at keeping the audit about money and not about jail time.

    Our dual-licensed Carlsbad Tax Evasion Defense Attorneys and IRS Tax Fraud Defense Attorneys & CPAs have vast experience handling most types of potential misdemeanor and felony tax evasion charges, including federal income tax evasion, state income tax evasion, employment tax evasion, sales tax evasion, corporate tax evasion, cryptocurrency and Bitcoin tax evasionoffshore tax evasion, and divorce tax evasion. We can also provide assistance with related tax matters, such as unfiled or delinquent tax returns, undisclosed foreign accounts and related foreign taxable income, and tax preparer liability. For a reduced-rate initial consultation, call our Carlsbad tax office at (760) 338-7035 or contact the Tax Law Office of David W. Klasing online here.

    California Franchise Tax Board (FTB) Audit Representation

    The California Franchise Tax Board conducts audits related to state income tax filings. Most of these “audits” are independent audits. In addition, the FTB receives the results of any federal audit of your tax returns and uses that information to assess whether you owe back taxes to the state. Due to the differences between California state and federal tax laws, it is often the case that you might owe money to the state even if the IRS found in their audit that you do not owe any back taxes to the federal government.

    There are a multitude of California state-specific issues that can result in an independent tax audit by the FTB. FTB audits can result in serious fines and penalties and should not be taken any less seriously than an audit by the IRS. A Tax Attorney can help you reconstruct the necessary records, fight any findings that you believe are incorrect, and work out a payment plan with the FTB for any money that you do owe.

    If you disagree with the results of an FTB audit, you may challenge or “protest” the outcome. If FTB has contacted you and you are aware that you made false statements or used inaccurate reporting techniques when filing your taxes, do not face the audit alone. Our experienced dual-licensed Carlsbad FTB Audit Appeals Attorneys and CPAs will act as a barrier and stop the examining agent from inferring criminal admissions/confessions from your actions and words.

    It is never prudent to ignore an FTB notice, even if you disagree with its findings or are unsure precisely what the notice is in reference to. Contrary to being forgotten, interest on any unpaid tax debts will simply continue accruing until your debt is satisfied. Click on the following to learn more:

    California Employment Development Department (EDD) Audit Representation

    While the IRS also engages in audits related to federal payroll taxes, audits related to California state payroll taxes are conducted by the California Development Department (EDD). Employers are required to withhold California payroll taxes out of each employee’s check, along with federal payroll taxes, and to hold them in trust until remitting them to the proper agencies. If you fail to take out payroll taxes or take them out of employees’ checks and fail to remit them to California, you could face serious civil tax penalties and even risk federal or California criminal tax prosecution.

    The most common issue investigated during an EDD audit is whether you are properly classifying your workers as employees vs. independent contractors. While you are required to take state payroll taxes out for employees, you are not required to do so for independent contractors. However, there are tight restrictions around who can be classified as an independent contractor to prevent fraud. An experienced Tax Attorney can help you properly classify those who work for you and can work to mitigate any potential damage from misclassifying workers in the past. Our experienced dual-licensed Carlsbad EDD Tax Audit Attorneys & CPAs can help gather evidence to show the EDD you have properly classified workers as independent contractors.

    Note: with the passing of AB5 in 2019, worker classification audits are on the rise Issues that can increase the odds of facing an employment tax audit or exacerbate the consequences of such an audit include:

    California Department of Tax and Fee Administration (CDTFA) Audit Representation

    Audits related to withholding and remittance of California sales taxes are conducted by the California Department of Tax and Fee Administration (CDTFA). Underpaying of sales taxes is quite common, especially because how much sales tax you are required to charge can be confusing. It often varies depending on what kind of product you are selling, and especially for online purchases, where the buyer lives. The CDTFA is known to conduct random field audits of certain cash-based businesses like, bars, restaurants, and liquor stores, where cash based sales and consequently sales taxes are often underreported or undercharged.

    These audits may require a lot of effort on your part and can encompasses an audit of most of your business records, including potentially producing records of all your sales and purchases, bank statements, federal and state income tax returns, point of sale records, etc. It is vital that you retain a skilled Tax Attorney to help you organize and if necessary reconstruct these records and work to mitigate the damage from any records that are missing or do not line up with what you reported to the state. There are also specific deadlines that must be followed if challenging a finding by the CDTFA and a Tax Lawyer will be able to keep on top of these for you.

    Recently, the CDTFA issued updated guidance on protocols and procedures for disputing, or “appealing,” CDTFA determinations. Though the CDTFA makes efforts 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 CDTFA Audit Attorneys & CPAs before filing an appeal or petition for redetermination due to the legal and financial complexity involved. We can help you appeal IRS and California state tax audit decisions involving:

    IRS, FTB, EDD and CDTFA (BOE) Audit and Appeals Representation in Carlsbad

    Tax audits, which are also called “examinations,” can be conducted by federal agencies such as the IRS, or by California state tax authorities. In California, the Franchise Tax Board (FTB) reviews state income tax returns and administers state tax income tax laws in accordance with the California Revenue and Taxation Code.

    Audits carry several dangers for taxpayers. Of course, there is the possibility that additional tax, penalties and interest will be assessed, increasing the taxpayer’s tax obligations. Of even greater concern is the possibility that the IRS, FTB, EDD or CDTFA will detect willful misstatements or omissions in the taxpayer’s tax filings, leading to at best additional tax, penalties and interest, and at worst, the potential for criminal tax prosecution. The greatest danger lies in a type of audit known as a high risk “egg shell audit,” which is an audit of a tax return that contains egregious errors, such as significantly understated income.

    Our IRS Tax Audit Lawyers can prepare you for an audit, negotiate with the IRS on your behalf throughout the audit process, and, if you are dissatisfied with the results of the audit, potentially aid you in “appeals,” or the process of challenging an auditor’s findings and where necessary, Tax Litigation. Both state (FTB) and federal (IRS) audits may be appealed, though strict procedural rules apply. Our IRS Audit and Appeals Lawyers or FTB Tax Audit Lawyers are happy to answer your questions about California state or federal tax appeals, the rules for appealing an audit, and other audit-related issues, including worker classification auditsCalifornia and federal employment tax auditsforeign account auditsCalifornia sales tax audits, and more. Additionally, our Bitcoin tax attorneys can represent you in a cryptocurrency audit if you have been affected by the recent Coinbase summons.

    With nearly three decades of experience assisting taxpayers in minimizing liabilities and efficiently resolving IRS disputes, David’s unique skill set grants our team a strategic edge in representing clients before protest or appeals officers, the chief counsel’s office, or U.S. Tax Court. We have a great track record of substantially improving our client’s overall tax situations through our protest, appeals, and litigation practice. Suppose we do not believe you will benefit from our representation. In that case, we will decline to take on the engagement. We always place our client’s needs for transparent, honest, fair, and zealous appeals and tax litigation representation over our inherent need to make a profit.

    Click on the following IRS Appeals FAQs to learn more:

    Facing IRS or California State Tax Disputes in Carlsbad?

    When it comes to tax litigation disputes in Carlsbad, taxpayers may find themselves facing complex and challenging legal issues. In such cases, it is essential to hire a tax litigation attorney who possesses a unique combination of tax knowledge and litigation ability. In addition to the U.S. Tax Court, tax litigation in Carlsbad involves the United States District Court, the United States Court of Federal Claims, the California Office of Tax Appeals, and various California tax agencies. It is a complex and challenging process that demands the expertise of professionals who understand the intricacies of tax law and accounting principles. Our dual-licensed Carlsbad Tax Litigation Attorneys and CPAs at the Tax Law Offices of David W. Klasing provide indispensable representation and guidance for taxpayers involved in disputes with federal and California tax authorities. With a comprehensive understanding of tax law, regulations, court procedures, and accounting practices, our team ensures that you receive strategic and effective representation tailored to your unique circumstances and navigate the complexities of tax litigation with confidence and precision.

    Our seasoned dual licensed Carlsbad, CA Audit Appeals and Litigation Attorneys are dedicated to providing unparalleled representation in IRS and California state tax disputes. We have maintained a record of never losing in federal tax court and only take cases we believe we will winWe will not take your case if we don’t believe we’ll win. By filing a tax court petition, you are likely to significantly improve your situation, especially when tax penalties and interest reduction substantially exceed litigation costs. Our approach involves two stages: first, with appeals, and then, we get a second bite at the appley via negotiation with IRS chief counsel. To date, we’ve never had to step foot in tax court, thus sparing our clients the most costly aspect of litigation. With the IRS’s 98% settlement rate, litigation is ordinarily avoided, which is advantageous for both parties.

    We have extensive knowledge and experience dealing with various federal and California state tax issues. This incorporates representing clients in cases involving IRS audits, disputes with the CDTFA, EDD, BOE, and FTB, claims for refund, tax collection defense, innocent spouse relief, criminal tax defense, and more. As one of the top tax law firms in the nation, we are consistently ranked and awarded for our exceptional service and expertise in tax controversy and litigation. Our attorneys are recognized leaders and authorities in the field, with numerous media mentions and leadership positions. With our help, you can trust that your tax disputes will be resolved with a customized strategy tailored to your needs. We prioritize protecting your rights and interests throughout the litigation and strive to provide the best representation in all tax controversies. Contact our tax firm online today for a reduced-rate initial consultation. You can also call our Carlsbad office at (760) 338-7035 or contact our main office at (800) 681-1295. Our services include representing the client in the following:

    Struggling with Cryptocurrency Taxation in Carlsbad?

    As of 2024, the Internal Revenue Service (IRS) has significantly intensified its efforts to ensure compliance in cryptocurrency reporting, focusing especially on large amounts of unreported income. This enhanced focus can be attributed to the increasing mainstream acceptance and usage of digital assets, which necessitates more robust regulatory oversight to ensure tax compliance. As part of its “Operation Hidden Treasure,” the IRS has been intensifying its efforts to monitor and enforce tax compliance on cryptocurrency transactions. The complexity arises mainly due to the perceived anonymity associated with many crypto wallets, making it challenging to track and tax transactions between unknown parties. To overcome this obstacle, the IRS has been effectively utilizing John Doe summonses. This legal instrument allows the IRS to petition a federal court to compel exchanges to release user information. This information is crucial for the IRS to determine the identity of U.S. taxpayers who may have failed to report their earnings from cryptocurrency transactions.

    Our Carlsbad Bitcoin and Virtual Currency Tax Attorney & CPA have extensive experience in all facets of cryptocurrency, from understanding the nuances of airdrops to addressing challenges faced by individuals whose crypto was held with a brokerage that has since folded. The exposure is even more significant for those who’ve ventured offshore with cryptocurrency. However, there’s a silver lining: taxpayers who’ve inadvertently committed tax discrepancies can often self-report through voluntary disclosure, potentially avoiding criminal tax prosecution and benefiting from reduced civil tax penalties. Whether you’re dealing with Bitcoin, Ethereum, Litecoin, or any other virtual currency, call us today at (760) 338-7035 or schedule a reduced-rate initial consultation here, and we will successfully guide you through the record-keeping and reporting procedures required to file a tax return. We will also fight vigorously for those whom the IRS has accused of failure to report and help them stave off more severe civil and criminal tax penalties. Read our story “Tax Fraud is Going Virtual” to know more about virtual tax evasion. For more information, see the following:

    Dual Licensed Carlsbad Sales Tax Attorneys and CPAs

    Businesses in Carlsbad that are responsible for collecting sales tax must ensure they accurately remit these taxes to the California Department of Tax and Fee Administration (CDTFA). Discrepancies, such as failing to remit collected taxes or improperly taxed transactions, can lead to California sales tax audits by the CDTFA. Considering the critical role of sales tax, which forms a significant portion of California’s revenue, sales tax audits are frequent in California, particularly for businesses in high-risk sectors. If your Carlsbad business is selected for a sales tax audit, it’s crucial to stay calm and immediately seek the assistance of our dual-licensed Carlsbad California Sales Tax Audit Attorneys & CPAs.

    Given the recent changes in California sales tax laws, particularly following the U.S. Supreme Court’s decision in Wayfair expanding state authority over online sellers, it’s beneficial to have our dual-licensed Carlsbad Internet Sales Tax Attorneys & CPAs guide you. Our services include internet sales tax audit representation, small business tax planning, and bookkeeping services, leveraging our deep understanding of the evolving business tax landscape. We are well-versed in the intricacies of California sales tax nexus and the differences between sales and use tax. Rely on our Carlsbad Sales Tax Attorneys and CPAs for comprehensive advisory and representation, ensuring that your business navigates and flourishes within California’s complex regulatory framework.

    In Need of Tax & Estate Planning in Carlsbad?

    Our dual-licensed Carlsbad Estate & Income Tax Planning Attorneys and CPAs represent estate planning clients throughout the globe with convenient offices in Irvine, Oxnard, and the surrounding California counties. Our custom estate planning representation ensures that your final wishes are honored and helps you provide for your loved ones in your absence. Combining our financial planning, legal, tax, and accounting skills and knowledge, we are committed to helping you preserve your wealth for future generations. Estate planning is a necessary process that a knowledgeable lawyer can compassionately and effectively handle. Our services include creating tax-efficient estate plans that reflect your goals, assisting with preparing and filing estate tax returns, and offering expert advice on gift tax implications.

    Estate planning involves multiple components, which need to be customized depending on the unique set of facts and circumstances underlying your financial situation, such as the size of your estate, the number of heirs involved, and the complexity and location of your domestic and international assets, including offshore bank accounts. Our skilled California Estate & Income Tax Planning attorneys and supporting staff of CPAs and CPA candidates have decades of experience assisting clients with wills, trusts, advanced healthcare directives, and other estate planning and administration matters. Our Estate Planning services include:

    How Do I Choose a Tax Attorney or CPA in Carlsbad, California?

    If you are searching for legal tax representation, there are several considerations that you must make. You might be looking to resolve questions about past or upcoming tax return filings. Perhaps you have understandable concerns about the recent onset of IRS, FTB, EDD or CDTFA audits. If you discover that you are facing civil or criminal tax charges, you will need someone to prepare your defenses and advocate for you in before the taxing authorities and possibly even eventually in federal or state court.

    There are a number of tax law firms that offer one or two of these services. However, there are a limited few that offer all of them. If you hire a tax lawyer, CPA or law or CPA firm that specializes in one particular area only to discover that you have a number of potential tax issues that need attention, you may need to begin your search all over again. This can cost time and money that you don’t have to waste. Further, communication breakdowns between different firms can lead to your problems becoming even worse.

    You will also want the services of a tax law & CPA firm that is local. Enlisting the help of a dual licensed Tax Lawyer & CPA who is close to home is not only more convenient for your in-person representation at audits and hearings, but it also means that the firm will be more familiar with the state and municipal tax regulations that affect you specifically.

    When you bring your tax issues to the attention of the dual-license Tax Attorneys and CPAs at the Tax Law Offices of David W. Klasing, you can avoid these common pitfalls. Our interdisciplinary services provide for all of our clients’ tax law needs, from preparation all the way to criminal tax defense. We operate throughout the State of California, including Carlsbad, making it easy for our clients to get our hands-on assistance when they most need it.

    Our versatile IRS, CDTFA (BOE) EDD and FTB tax audit lawyers are prepared to handle a wide range of state, federal, and issue-specific tax audits, including but not limited to:

    Carlsbad, CA Tax Lawyers Offering Reduced-Rate Consultations

    Whether you need to defend yourself against criminal tax charges in federal court, have questions about choosing the most tax-efficient and liability shielding business structure for your new startup, are concerned about your next steps regarding an undisclosed foreign bank account, need advice on investing in a business or opportunity zone, require guidance on passing an inheritance down to your children, or need legal or financial guidance on other local, state, federal, or international tax matters, including cryptocurrency tax issues, the Tax Law Office of David W. Klasing is fully equipped to resolve the issue with courtesy, efficiency, and the careful attention to detail that your matter demands and deserves.

    To discuss your tax needs confidentially in a reduced-rate initial consultation with our award-winning Carlsbad tax lawyers and CPAs, contact us online, or call (760) 338-7035 or (800) 681-1295 for prompt assistance. Our Appointment Only Carlsbad office is located at the following address:

    701 Palomar Airport Road

    Suite 300

    Carlsbad, California, 92011

    Why Hire a Dual Certified Carlsbad Tax Attorney and CPA?

    Why Hire a Carlsbad Dual Certified Tax Attorney & CPA, Reason #1



    Why Hire a Carlsbad Dual Certified Tax Attorney & CPA, Reason #2

    Managing Liability


    Why Hire a Carlsbad Dual Certified Tax Attorney & CPA, Reason #3

    Negotiation Skills


    Why Hire a Carlsbad Dual Certified Tax Attorney & CPA, Reason #4

    Financial Expertise


    Why Hire a Carlsbad Dual Certified Tax Attorney & CPA, Reason #5

    Avoiding Conflicts


    Why Hire a Carlsbad Dual Certified Tax Attorney & CPA, Reason #6

    Saving Money


    Tax Help Videos

    Representing Clients from U.S. and International Locations Regarding Federal and California Tax Issues

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    Main Office

    Orange County
    2601 Main St. Penthouse Suite
    Irvine, CA 92614
    (949) 681-3502

    Our headquarters is located in Irvine, CA. Our beautiful 19,700 office space is staffed full-time and always available for our clients to meet with our highly qualified and experienced staff of Attorneys, Certified Public Accountants and Enrolled Agents. We also offer virtual consultations and can travel to meet with clients in one of our satellite offices.

    Outside of our 4 hour initial consultation option, we do not charge travel time or travel expenses when traveling to one of our Satellite offices, or surrounding business districts, where it is necessary to meet personally with taxing authority personnel, make court appearances, or any in person meeting deemed necessary for the effective representation of a client. To make this as flexible, efficient, and convenient as possible, David W. Klasing is an Instrument Rated Private Pilot and Utilizes the Firms Cirrus SR22 to service client’s in California and in the Southwest by air. Offices outside these areas are serviced via commercial jet airlines. None of these costs are charged to our clients.

    Satellite Offices

    (310) 492-5583
    (760) 338-7035
    (916) 290-6625
    (415) 287-6568
    (909) 991-7557
    (619) 780-2538
    (661) 432-1480
    (818) 935-6098
    (805) 200-4053
    (510) 764-1020
    (408) 643-0573
    (760) 338-7035
    (602) 975-0296
    New Mexico
    (505) 206-5308
    New York
    (332) 224-8515
    (512) 828-6646
    Washington, DC
    (202) 918-9329
    (702) 997-6465
    (786) 999-8406
    (385) 501-5934