Tax Attorney California Accountant for Childcare Companies
Like other types of businesses, childcare providers have unique needs when it comes to tax planning, bookkeeping, and accounting. Beholden to an intricate network of state and federal tax regulations, childcare providers are responsible not only for the safety of children, but also, for timely and accurate reporting. Failure to comply with the law can lead to an IRS tax audit, or to an audit performed by one of California’s tax agencies, such as the Franchise Tax Board (FTB), which audits business income tax returns. Such an audit could lead to expensive civil penalties, or, if indicators of tax fraud are apparent, even a criminal IRS investigation. Even if your business is in compliance with the law, you may be overlooking valuable opportunities that are buried within the tax code. An experienced tax lawyer or accountant can provide your business with sound financial guidance, while defending you vigorously in the event of a civil or criminal tax audit.
Your business works to protect and support children. Now, let our tax firm work to protect and support your business. Led by dually certified attorney-CPA David W. Klasing, the award-winning team at the Tax Law Office of David W. Klasing consists of California tax attorneys and CPAs who possess decades of experience representing LLCs, corporations, and other types of entities in federal tax audits, California tax audits, state and IRS audit appeals, and criminal tax investigations. Additionally, we provide bookkeeping and accounting services, along with tax preparation services for childcare companies statewide. Whether you operate a daycare center, a preschool program, a residential home for children, or you are a nanny, babysitter, or au pair, we can provide nuanced tax guidance tailored to your niche in the industry.
State + Federal Tax Audit Attorneys for Childcare Providers in California
California or IRS tax audits, such as California employment tax audits, can be triggered by any number of factors, ranging from home much income your business reports, to how the business is structured, to the source of the company’s income. However, audits are frequently initiated because the IRS has detected a discrepancy or problem among the taxpayer’s forms, such as income that has not been reported properly. The IRS culls information from foreign and domestic banking institutions, anonymous referrals, and other sources, comparing the data against the taxpayer’s reported income and assets to determine whether an examination – or criminal tax investigation – may be warranted. For example, an audit, eggshell audit or criminal tax investigation might be initiated if:
- The taxpayer’s bank statements do not match with his or her reported income
- A tax whistleblower reports suspected fraud
- The taxpayer repeatedly fails to file or pay timely taxes
- The taxpayer improperly claims home daycare tax deductions
- IRS software identifies other statistical anomalies
We can defend your interests and negotiate on your behalf if your business has been selected for a California or IRS tax audit of any kind, including a payroll tax audit, worker classification audit, business income tax audit, or a tax audit pertaining to niche tax issues, such as cryptocurrency, FBAR, and cash transactions.
IRS + California Tax Audit Representation (EDD, CDTFA, FTB)
How to file taxes as a childcare provider is not always clear or straightforward. Unfortunately, even a small mistake can trigger a tax audit. Though statistics fluctuate, the IRS typically audits anywhere from 500,000 to 1 million taxpayers each year, many of which are business entities such as daycare providers. Self-employed individuals are at even greater statistical risk.
In addition to filing your federal taxes correctly with the IRS, it is critically important that you understand how to report a daycare to the state if you:
- Operate a childcare business in California
- Operate an out-of-state (“foreign”) business that has California-source income; operates a branch in California; employs workers in California; or has other financial connections to the state of California (referred to as “nexus”)
The following three agencies enforce business taxes in California – and where necessary, perform audits:
- The Franchise Tax Board (FTB), which audits California personal and corporate income tax returns
- The Employment Development Department (EDD), which audits California employment tax returns
- The California Department of Tax and Fee Administration (CDTFA), which audits sales and other state tax returns
Our IRS tax attorneys represent childcare and daycare providers in federal tax audits, FTB tax audits, EDD tax audits, and CDTFA tax audits, in addition to appeals, mediation, and tax litigation. If you disagree with the outcome of a California or IRS audit, we can guide you through the appropriate procedures to contest (“appeal”) the auditor’s initial findings.
California Tax Lawyer + Accountant for Daycare Businesses + Babysitters
At the Tax Law Office of David W. Klasing, we are accustomed to dealing with the tax regulations that impact daycare providers, nannies, babysitters, and related professions. Our business tax lawyers and CPAs have many years of experience representing childcare providers in state and federal tax audits, in addition to providing IRS and OTA (California) appeals representation. We work strategically to limit your criminal tax exposure, but are prepared to defend you aggressively administratively or in court if you are investigated or charged with tax evasion, payroll tax fraud, or related offenses. We also provide an array of tax filing services, preventing disputes or investigations before they arise by ensuring your forms are submitted accurately and on time.
Let an attorney or CPA from the Tax Law Office of David W. Klasing be your childcare provider tax guide. We can protect you during an audit, file your business tax returns, help you take advantage of deductions for daycare businesses, or provide other services personalized to your company’s needs. With tax offices located throughout Northern and Southern California, we are conveniently positioned to serve childcare businesses statewide. Contact us online to get started or call the Tax Law Office of David W. Klasing at (800) 681-1295 for a reduced-rate consultation.
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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