Awards & Recognition
Sacramento, the vibrant capital of California, is celebrated for its unique blend of urban energy and natural beauty. Nestled in the heart of Northern California, Sacramento boasts a rich history, diverse culture, and a thriving economy. As a hub of rapid economic growth, Sacramento is home to many startups and well-established corporations, contributing to the city’s dynamic financial landscape. Guidance through the complex federal and California tax laws is crucial for these enterprises, as adherence to them is not only mandatory but pivotal in safeguarding them from severe legal repercussions.
What is a Voluntary Disclosure, and Why Do I Need it?
Voluntary disclosure is a process whereby the client’s tax attorney approaches the IRS Criminal Investigation Division or relevant California State Taxing Authority (where appropriate) and acknowledges that their client has cheated in some way on their taxes and wants to remedy the situation. This is achieved by amending the previously filed fraudulent return and making payments of taxes and penalties owed in exchange for the IRS passing on criminal tax prosecution.
If you or your business have inadvertently failed to fulfill IRS or California state tax obligations, engaged in intentional tax omissions, overstatements, or understatements, or willfully committed tax fraud—be it through failure to file foreign information returns or evasion of U.S. income tax on offshore income—there is a pathway to redemption. This avenue is accessible through domestic or offshore voluntary disclosure.
To put it simply, if you’re in Sacramento 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. It provides a systematic and secure avenue to rectify their tax status while avoiding criminal tax prosecution.
The IRS Criminal Investigations Office (IRS-CI) has often looked favorably upon taxpayers who come forward, engage in complete disclosure, and agree to pay an oft-reduced penalty because it lightens their load, makes their lives a bit easier, and enhances voluntary compliance. Voluntary disclosure is a Criminal Tax Defense Attorney’s essential tool in ensuring that you do not end up behind bars for what you may view as a series of simple mistakes. However, no taxpayer should attempt to undertake voluntary disclosure without the guidance of an Experienced Criminal Tax Defense Attorney.
Does California State Have a Voluntary Disclosure Program?
Like the IRS for federal tax obligation, 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 Sacramento 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.
For in-state taxpayers, sales tax voluntary disclosure is only available for purchasers within California who are not otherwise required to hold a seller’s permit. To qualify, individuals must meet specific criteria, including residency or location within California without prior registration with the CDTFA, absence of previous filings of Individual Use Tax Returns, and a demonstration of reasonable cause for non-payment or filing delays. Additionally, purchases must not involve vehicles, vessels, or aircraft; the application must be submitted voluntarily.
For out-of-state businesses operating in Sacramento, The FTB’s Voluntary Disclosure Program provides a method to avoid penalties for delinquent or amended filings where honest mistakes prevented timely compliance. Legislative expansions have broadened its scope to encompass trusts with California beneficiaries and nonresident partners from out-of-state partnerships. Applicants must submit Form FTB 4935 via mail, accompanied by pertinent documentation explaining the nature of non-compliance. Notably, ineligible parties include those registered with the California Secretary of State who have ever filed a return with the State of California or received a notice to file a return in California.
How Can the Tax Law Offices of David W. Klasing Help Me?
At the Tax Law offices of David W. Klasing, our Sacramento, CA Voluntary Disclosure Attorneys & CPAs navigate the complexities of various IRS and California state voluntary disclosures, including domestic, offshore, CDTFA (BOE), and FTB voluntary disclosures, streamlined procedures, and delinquent FBAR and international information return submission procedures. If you have financial accounts abroad, ensure you report the assets correctly – and avoid costly tax penalties – by working with our Sacramento Foreign Account Tax Compliance Attorneys & CPAs.
As long as a Sacramento 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 or California state tax non-compliance through a domestic or offshore voluntary disclosure before the IRS or the California state agency 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.
Who is David W. Klasing?
At the helm of our firm is David W. Klasing, who holds dual California licenses, allowing him to practice both as an attorney and a certified public accountant specializing in taxation, estate planning, and business law. With an “A” rating from the Better Business Bureau and a perfect 10.0 AVVO rating, David has proactively helped clients through IRS and California Voluntary Disclosure Practice to avoid high-risk tax audits, clandestine criminal tax investigations, and costly tax litigations.
Here is what truly sets him apart: Amidst an estimated 1.1 million attorneys and 560k CPAs in the US, only 24k professionals simultaneously carry both licenses. Among those, a mere fraction—approximately 3,000—have additionally earned a master’s in taxation. David W. Klasing is part of this select group, bringing his unparalleled education, credentials, and experience to zealously serve our clients in their tax-compliance needs.
How will I Know When to Make a Voluntary Disclosure?
Timely voluntary disclosure is pivotal for its efficacy. To qualify, disclosures must precede the commencement of an IRS examination, notification of an impending IRS audit, or provision of information by third-party whistleblowers to the IRS. Time sensitivity underscores the importance of careful consideration before filing, especially concerning circumstances where disclosures might be ineffective, such as with illegal source income. Taxpayers must meticulously assess their behaviors and potential interpretations by IRS examiners, weighing whether a “noisy” disclosure involving the criminal investigation division or a “quiet” disclosure through amended returns is more suitable for their situation.
Opting for a noisy disclosure involves contacting the criminal investigation division from the outset. In contrast, a quiet disclosure entails filing five years of amended returns with the client’s average service center. While the latter may help avoid the costs and stress of an audit typical with a noisy disclosure, it could be seen as an admission of guilt without the anticipated immunity from criminal tax prosecution. Given these complexities, seeking guidance from experienced criminal tax defense counsel is paramount before deciding on the approach to voluntary disclosure.
At the Tax Law Offices of David W. Klasing, we will help you determine when you are eligible for a voluntary disclosure. We will contact the IRS with your information and do a “pre-check” to see if you can enter the program. The voluntary disclosure can begin once you are accepted in the pre-check stage. If you are not accepted, it may mean that a criminal tax investigation has already started.
Hence, It is imperative that you 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 in 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 a voluntary disclosure.
Can I Make a Voluntary Disclosure to the DOJ Tax Division?
In light of recent changes, there’s an essential update to the Voluntary Disclosure Practice. The new Department of Justice Tax Division’s Voluntary Disclosure Policy encourages entities, including but not limited to partnerships, government entities, and unincorporated associations, to make voluntary disclosures to the Tax Division, even if they believe the government may already be aware of the misconduct. While full benefits of voluntary disclosure might not always be available in such cases, some benefits can still be realized, reducing potential penalties. This policy does not, however, apply to sole proprietorships.
Furthermore, the policy states that any voluntary self-disclosure related to matters arising under the Internal Revenue laws must be made to the Tax Division. While this might initially seem to suggest a shift from the traditional practice of making disclosures to the IRS, it’s essential to understand that the policy does not explicitly exclude the IRS from the process. Other legal provisions indicate that voluntary disclosures to the IRS under its established practices will still be considered valid.
Our experienced team of dual-licensed Criminal Tax Defense Attorneys and CPAs will expertly guide you through the complexities of the DOJ Tax Division’s Corporate Voluntary Self-Disclosure Policy and the IRS Voluntary Disclosure Practice. We understand the nuances of the policy’s scope, including the types of entities it covers, and can help you make informed decisions on the best course of action. Our team has decades of experience helping clients whose tax returns were false or misleading to correct these issues through the various voluntary disclosure programs offered by the IRS and the state of California.
As uniquely qualified and extensively experienced Criminal Tax Defense Tax Attorneys & Kovel CPAs, 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!
Get Help with Your Case Today in Sacramento
For any tax compliance and controversy needs in Sacramento, contact us at The Tax Law Offices of David W. Klasing today. Our experienced Tax Lawyers offer a reduced-rate initial consultation on new cases or engagements. Call us at (888) 637-7690, contact us online, or reach our Sacramento office directly at +1 916-290-6625 today to schedule a reduced rate initial consultation at our Sacramento tax law offices or one of our other convenient locations across Northern California.
In addition to our fully staffed 19,700 square foot penthouse office in Irvine, the Tax Law Offices of David W. Klasing has unstaffed (conference room only) satellite offices in Los Angeles, San Bernardino, Santa Barbara, Panorama City, Oxnard, San Diego, Bakersfield, San Jose, San Francisco, Oakland, Carlsbad, Sacramento, Las Vegas, Nevada; Salt Lake City, Utah; Phoenix, Arizona, Albuquerque, New Mexico. We also have virtual offices in New York, New York; Austin, Texas; Miami, Florida, and Washington, D.C.
Our Sacramento office is conveniently located at:
180 Promenade Cir Suite 300,
Sacramento, CA 95834
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