Awards & Recognition
IRS tax compliance is a daunting subject, particularly for taxpayers whose tax planning considerations are complicated by matters like buying a home, owning a domestic or offshore business, working overseas, or receiving an inheritance. Successful tax compliance is likely to prove especially challenging for taxpayers in 2019, which is the first year when most provisions of the federal tax reform bill, the Tax Cuts and Jobs Act (TCJA), will take effect. If you live or do business in Oakland, you will also need to be mindful not only of federal tax laws, but also California’s tax regulations, which are enforced by government organizations that include the Franchise Tax Board (FTB), the California Department of Tax and Fee Administration (CDTFA), and the Employment Development Department (EDD).
At the Tax Law Office of David W. Klasing, our Oakland tax lawyers have decades of experience helping individuals and business entities understand and fulfill their tax responsibilities. Our encyclopedic tax knowledge, which is bolstered by more than a decade of auditing experience, extends to the local, state, federal, and international levels, enabling our team to provide effective, precision guidance in all types of personal and corporate tax issues. Whether your tax compliance questions involve federal income taxes, California employment taxes, foreign account reporting requirements, the Supreme Court’s recent sales tax ruling for online retailers, or a different type of tax issue, rely on our award-winning Tax Attorneys and CPAs to guide you through the applicable laws with clarity, care, and precision.
California and Federal IRS Tax Compliance
Different taxpayers are necessarily affected by different tax laws. For example, business owners must concern themselves with payroll tax compliance, while small online merchants, such as Etsy sellers, may be impacted by some recent changes to the way sales and use tax is regulated. No matter what sorts of tax issues you need help navigating, our diligent tax compliance attorneys are here to make it easier and more cost-effective.
Income Tax Compliance
Most Oakland residents are required to file personal income tax returns, including federal tax returns and California tax returns. Federal returns are reviewed by the IRS, while California returns are reviewed by the FTB. If you fail to file a return, underreport your income, omit sources of income, are late in filing, are late in paying, or fail to pay taxes outright, you may be audited – and penalized – by state or federal tax authorities.
Whether you have questions about filing your next return, or you need to address a previous error, our Oakland tax planning attorneys can help you prepare for the future – or correct mistakes from the past. We can help you get caught up on tax filings, mitigate the tax penalties for not filing, and assist you with domestic or offshore voluntary disclosures where necessary to mitigate criminal tax exposure by reaching out to the IRS before they have opened an audit or criminal tax investigation against you or your business.
Payroll Tax Compliance
Payroll taxes are also known as “trust fund taxes” or “FICA taxes,” in reference to the Federal Insurance Contribution Act. They include Social Security taxes, Medicare taxes, and in some cases, the Additional Medicare Tax (AMT). Employers are generally responsible for collecting and remitting these taxes to the government, in addition to paying unemployment taxes as required under the Federal Unemployment Tax Act, or FUTA (not to be confused with FICA).
Employers must exercise caution to appropriately classify workers as either “employees” or “independent contractors,” because this directly impacts the employer’s duties with regard to payroll and unemployment taxes. Intentional misclassification of workers is a violation of the law, making strict compliance essential.
Sales Tax Compliance
In 2018, the United States Supreme Court made a controversial ruling, South Dakota v. Wayfair, Inc., with important tax repercussions for online merchants. As a result of the Wayfair ruling, U.S. states – including California – now have increased powers to collect sales tax from internet sellers. This ruling has created financial turbulence for thousands of small online merchants, while simultaneously causing a spike in sales tax audits. The Oakland tax audit lawyers at the Tax Law Office of David W. Klasing can prepare and defend your business, while walking you through the steps you must take to ensure your compliance going forward.
Foreign Account Reporting Compliance: FBAR, FATCA, and Voluntary Disclosures
You may be surprised to learn that your U.S. income is not the only income you must report to the U.S. government. If you qualify as a U.S. tax resident, you are required to report your worldwide taxable income and provide appropriate foreign information reporting. Regardless of whether you are a citizen, a resident, or a non-resident, you are also required to comply with any foreign or domestic income and information reporting laws that apply to you, which means that you may need to disclose offshore bank accounts, mutual funds, and even Bitcoin wallets. Depending on your circumstances, the laws that might impact you include:
- The Bank Secrecy Act (BSA), under which certain citizens and resident aliens must report foreign income using a form called the FBAR (Foreign Bank Account Report)
- The Foreign Account Tax Compliance Act (FATCA), which requires certain citizens, resident aliens, and non-resident aliens to file Form 8938 (Statement of Specified Foreign Financial Assets)
Filing an FBAR
U.S. citizens and resident aliens are generally required to file the FBAR if their combined offshore assets, such as the contents of a checking or savings account, exceeded $10,000 in value during the calendar year. In addition to individual taxpayers, this also applies to certain entities, trusts, and estates. The FBAR, which is also called FinCEN Form 114, must be filed online using the official BSA E-Filing System.
Willful or even negligent failures to comply with FBAR requirements can trigger substantial penalties, including a fine of up to $10,000 (per accidental violation) or $100,000 (per willful violation). As an alternative to the $100,000 fine, a fine of up to 50% of the unreported account balance may be imposed. Due to these severe penalties, taxpayers with offshore income are urged to seek counsel from an FBAR attorney to assess their compliance.
FATCA Reporting: Form 8938
If you have global income, you may be required to comply with FATCA in addition to the aforementioned FBAR regulations. Under FATCA, certain taxpayers are required to disclose offshore assets that exceed predetermined monetary thresholds: for example, a threshold of $50,000, on the final day of the tax year, for unmarried taxpayers. To comply with FATCA successfully, affected taxpayers must file Form 8938. The initial failure to do so may result in a fine of up to $10,000 – which can increase by as much as $50,000 for continued noncompliance.
Voluntary Disclosure Programs
As you may already be aware, the IRS officially terminated its long-running Offshore Voluntary Disclosure Program (OVDP) in late 2018. However, there are still alternative options for voluntary disclosure which continue to remain open to eligible taxpayers.
Some of these programs focus on taxpayers who reside in the United States, while others focus on taxpayers living abroad. Likewise, certain disclosure procedures are administered by the IRS, while other programs are operated at the state level. An example from the latter category is the California Voluntary Disclosure Program, which is specifically designed for out-of-state individuals and businesses that have had past compliance failures with California taxes, such as California sales tax issues.
With the OVDP now inaccessible, taxpayers with offshore accounts must weigh other possibilities, such as filing an amended return, filing a delinquent FBAR, or following the new IRS voluntary disclosure procedures. Whether you need to disclose foreign or U.S.-source income, our taxpayer advocates can help you evaluate the options thoroughly, identifying a strategy to effectively seek penalty reductions while minimizing the risk of criminal prosecution.
Oakland Tax Compliance Lawyers and CPAs for Businesses and Individuals
Proudly serving the city of Oakland, the Tax Law Office of David W. Klasing is a dedicated team of domestic and international tax lawyers and CPAs under the leadership of former auditor and dually licensed Attorney-CPA David W. Klasing, founder of our tax firm. Equipped with more than 20 years of experience in all aspects of California, federal, and international tax law, our skilled and proficient tax professionals are ready to answer all of your questions. If you have any doubts or concerns as to whether you have complied with tax laws correctly, allows us to help you identify the issues – and take the right steps to meet your goals and minimize any exposure to additional tax, penalties, interest and minimize the probability criminal tax prosecution in appropriate circumstances.
Contact our tax firm online for a reduced-rate consultation. You can also call our Oakland office at (510) 764-1020 or call our main office at (800) 681-1295. Please note that in-person meetings at our Oakland location are by appointment only.
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:
