Awards & Recognition
When an IRS audit concludes, you do not have to accept the results unquestioningly. Instead, you can either agree or disagree with the examination’s findings. If you agree, you can sign the appropriate form and pay what you owe to complete the process. But if you disagree, you can appeal the initial decision and bring the matter to federal or California state courts. In Orange County, tax litigation can involve civil and latent criminal tax matters. It can be heard in venues that include the U.S. Tax Court, U.S. District Court, U.S. Bankruptcy Court, and California Superior Court. Tax controversies can arise when a federal or California tax agency, such as the IRS, FTB, EDD, or CDTFA, believes tax is owed on some level, and a taxpayer or company may feel otherwise. Similarly, a tax dispute can ensue when taxpayers believe a refund is owed.
Tax litigation is the process by which questions involving civil tax disputes that can involve potential latent criminal tax matters are presented, reviewed, and decided in the appropriate venue. When you face criminal tax exposure or need guidance regarding a civil tax audit, eggshell audit, reverse eggshell audit or criminal tax investigation, consulting an experienced Tax Litigation Attorney with extensive criminal defense tax training and experience is invaluable. Being well-informed and prepared can make all the difference in resolving these issues. During the auditing and appeals processes and any subsequent tax court litigation that may arise, you have the right to be represented by a qualified dual licensed Tax Attorney-CPA familiar with the legal and financial complexities of tax matters.
David W. Klasing, a dual-licensed attorney-CPA having earned a Master’s in tax, is among an elite group of approximately 3,000 professionals in the country possessing similar credentials. With 1.1 million attorneys, 560K CPAs, and only 24K dual-licensed attorney-CPAs nationwide, David’s unique skill set sets him apart from the competition. He served as Past Chair of the OCBA Tax Committee, Past Chair of the California Bar Tax Procedure and Litigation Committee, and Past Education Chair of the American Society of Attorney CPAs. David has over 20 years of experience helping taxpayers minimize their liabilities while efficiently resolving IRS disputes. His long history of wins for clients, impeccable ethical standards, and honesty make him a reliable choice for representation. To arrange an initial consultation with an Orange County tax litigation attorney at the Tax Law Offices of David W. Klasing, call us at (800) 681-1295 today.
Is Mediation or Litigation Right for You?
Tax Litigation is an aggressive measure that can be an obvious, decisive, and effective method of resolving ongoing IRS disagreements. However, this process also has the potential to become a costly and time-consuming endeavor. Therefore, before selecting litigation as your legal strategy, you may want to consider the less drastic mediation alternative.
Mediation effectively takes the opposite approach of litigation by encouraging participants to work together toward their own mutually agreeable solution with the help and guidance of a qualified mediator. Mediation grants participants more significant personal input and tends to be more informal, rapid, and cost-effective than litigating a case. Another important distinction is that while a judge’s decision is legally binding, a mediation plan is not.
The Appeals Office offers several different mediation options as part of the Alternative Dispute Resolution (ADR) program. Depending on your classification as a taxpayer and which stage of the IRS process you have reached, you may be an ideal candidate for the following:
- Compliance Assurance Process (CAP): Pre-Filing stage, available to international and large businesses;
- Early Referral: Examination stage, available to international and large businesses, small businesses, self-employed taxpayers, and tax-exempt and government entities;
- Fast Track Mediation: Collection stage, available to small businesses and self-employed taxpayers;
- Fast Track Settlement: See Early Referral guidelines;
- Post-Appeals Mediation: Appeals stage, available to international and large businesses, small businesses, self-employed taxpayers, and tax-exempt and government entities.
In addition to mediation, the IRS Appeals process can be a viable option for resolving tax disputes without litigation. The California Office of Appeals also offers a similar approach for state tax disputes. It’s essential to understand the differences between the expedited appeals process and the regular appeals process when considering your options.
The expedited appeals process typically involves the auditor, their manager, and an appeals officer. However, this method may be less effective because the auditor and their manager are emotionally invested in the audit results, often leading to a negotiation power imbalance in the governments favor.
On the other hand, the regular appeals process is initiated by filing a tax court petition. It involves an independent review of the taxpayer’s case by an appeals officer not involved in the initial audit. The IRS auditor and their manager are not directly involved in this process. The appeals officer will independently consider the taxpayer’s arguments and supporting evidence, attempting to reach a resolution that also weighs the hazards of litigation for the IRS in the client’s specific situation. If the appeals process does not result in a solution, the taxpayer has a second opportunity to settle with IRS Chief Counsel’s office on the Tax Court steps.
Similarly, the California Office of Appeals offers a similar process for resolving state tax disputes. This independent, impartial body reviews tax controversies involving the California Franchise Tax Board (FTB), Employment Development Department (EDD), and California Department of Tax and Fee Administration (CDTFA). Like the IRS Appeals process, the California Office of Tax Appeals (OTA) provides a less adversarial and more cost-effective alternative to litigation, enabling taxpayers and tax agencies to resolve disagreements through a structured administrative process.
Our Orange County dual-licensed tax litigation Attorneys & CPAs at the Tax Law Offices of David W. Klasing are committed to helping taxpayers navigate the complexities of tax deficiency disputes and tax refund litigation. Considering the IRS’s 98% settlement rate, reaching a mutually acceptable solution outside of court is often the most efficient and cost-effective approach for both parties. Our strategic approach to tax litigation prioritizes resolving disputes through negotiation, and other alternatives to litigation whenever possible. We take pride in our track record of successfully negotiating settlements with the IRS and other tax agencies and our commitment to providing personalized and effective representation for our clients.
We have rarely stepped foot in Tax Court, sparing our clients the most expensive part of tax litigation. We firmly believe in exploring alternative means of dispute resolution to serve your best interests. However, if litigation becomes necessary, our experienced tax litigation attorneys will advocate fiercely on your behalf, working tirelessly to achieve the best possible results. Trust us to guide you through the often-challenging landscape of tax disputes and litigation in Orange County.
Challenging an IRS Audit in Tax Court
Mediation is an ideal solution for some taxpayers, but not all. However, there are specific steps you must go through before you can bring your dispute to U.S. Tax Court or the relevant California state tax court.
Suppose you disagree with the results of an IRS audit. In that case, the first step is to hire an experienced Orange County tax litigation attorney totypically file a formal written protest, which should contain information including but not limited to:
- A statement that you wish to appeal the examination findings;
- A list of the proposed items you want to dispute;
- The facts and laws which support your argument;
- An explanation of why you believe the proposed changes are incorrect;
- Any relevant documentation or evidence to support your position;
- A request for an appeals conference, if desired.
Typically speaking, this written protest must be filed within 30 days of the date on the letter containing the audit’s findings, often called the 30-day letter. After an examination, if there are any proposed changes, the IRS agent sends the taxpayer an examination report outlining the changes made to the tax return and a letter notifying the taxpayer of their right to appeal the proposed changes within 30 days. An appeal typically involves a conference with an IRS Appeals Officer and filing the formal written protest stating which offered changes the taxpayer disagrees with and the reasons for the disagreement. If you cannot reach an agreement through Appeals within that time or do not respond, you will receive a 90-day letter or Notice of Deficiency. You then have 90 days to petition the Tax Court for an external review of the findings. If the taxpayer does not respond to this 90-day letter, the amount on the notice of deficiency will be assessed regardless of whether the proposed changes were made in error. However, it should be noted that an appeals officer will often evaluate to determine whether a settlement can provide a resolution before the tax court hears the case.
Suppose your dispute involves an amount less than $50,000, including tax, interest, and penalties. In that case, you may be eligible to use a special set of simplified court procedures, known as the Small Tax Case procedure or “S case.” This process offers a more informal and expedited resolution to your tax dispute. However, if you elect to use the simplified process, you will lose your ability to appeal any decision rendered by the Tax Court.
The Small Tax Case procedure is designed to make the tax court more accessible for taxpayers with minor disputes, allowing them to present their cases without extensive legal knowledge or representation. During these proceedings, the taxpayer and the IRS present their arguments directly to a tax court judge, who will often decide immediately after hearing the case. This streamlined process can benefit taxpayers seeking a quicker resolution to their tax disputes. However, it’s important to remember that choosing the Small Tax Case procedure may not always be the best option, especially if you believe the outcome could be unfavorable and may require an appeal. Consulting with our experienced dual-licensed Tax Attorneys and CPAs can help determine whether the simplified court procedures suit your situation.
If you are engaged in a dispute with the IRS, the experienced litigators at The Tax Law Offices of David W. Klasing can advocate helping resolve the issue. Our dual-licensed tax litigation Attorneys and CPAs represent clients in Orange County and beyond during all phases of the tax dispute process, including audits, litigation before the U.S. Tax Court, trial courts, and appellate courts. Our practice extends beyond federal income tax matters, handling California state and multistate audits, and representing clients before the California Franchise Tax Board, the State Board of Equalization, CDTFA, and the Employment Development Department. We strive to provide our clients with a careful and thoughtful strategy to manage the audit and achieve a successful result, prioritizing settlement when possible and standing ready to defend your rights in administrative hearings or trials when necessary. To set up a reduced-rate initial consultation with an Orange County tax litigation attorney, call us at (949) 681-3502 or (800) 681-1295, or contact us online today.
Orange County Tax Law Offices
Navigating tax disputes can be complex and challenging, but the experienced team at The Tax Law Offices of David W. Klasing is here to guide you through every step. Unlike general litigation firms, which may lack detailed knowledge of tax law and procedure, our dual-licensed tax litigation Attorneys and CPAs specialize in tax controversies, ensuring you receive the highest caliber of representation.
We will primarily focus on alternative dispute resolution methods, such as mediation, negotiation, and IRS Appeals. These enable us to resolve tax disputes efficiently and cost-effectively without litigation whenever possible. To date, we have never stepped foot in Tax Court, sparing our clients the most expensive aspect of litigation. Our in-depth understanding of tax law and familiarity with tax dispute procedures allow us to offer personalized, strategic advice, guiding you through the complexities of audits, tax court proceedings, and California state tax matters.
With a proven track record of successfully negotiating settlements with the IRS and other tax agencies, you can have confidence in our ability to advocate fiercely for your best interests should litigation become necessary. Even a simple mistake or misinterpretation of the tax code can result in litigation, fines, and penalties, making the assistance of a knowledgeable professional crucial for achieving a favorable outcome in your case. We will thoroughly review your case, assess your rights and options by examining your tax returns and financial records, and guide you through IRS or California state tax audits. We will address any notices of deficiency and evaluate the merits and strengths of your case to help you contest a deficiency, pursue a refund, or resolve other tax dispute issues.
For any tax planning compliance and controversy needs in Orange County, contact the dual licensed Attorneys and CPAs at The Tax Law Offices of David W. Klasing today. We offer a reduced-rate consultation on new cases or engagements. Call (949) 681-3502 or 800-681-1295 or contact us online today to schedule a reduced rate initial consultation at our Orange County tax law offices or one of our other convenient locations across Southern California. Our Orange County (main office) is conveniently located at:
2601 Main St. Penthouse Suite
