Awards & Recognition
While the IRS audits federal income tax returns, California has several tax agencies of its own, which conduct state tax audits independently from the Internal Revenue Service. State tax agencies that conduct audits in California include the Franchise Tax Board (FTB), the California Department of Tax and Fee Administration (CDTFA), and the Employment Development Department (EDD). If you or your business has been chosen for a California tax audit by the FTB, CDFTA, EDD, or other state agencies, you risk costly tax assessments, interest charges, and civil penalties – or even referral for criminal tax prosecution. You should discuss the situation with a San Bernardino California tax audit lawyer & CPA immediately.
In the bustling and vibrant city of San Bernardino, navigating the complex landscape of California state tax laws requires exceptional expertise. In the heart of one of the world’s leading financial and cultural centers, where innovation and commerce flourish, the FTB, CDTFA, and EDD maintain vigilant oversight. Having an experienced strategic ally is crucial. San Francisco’s unique economic environment presents distinct state tax challenges, necessitating an attorney who is deeply attuned to the city’s pulse and the intricacies of California’s tax system.
At the Tax Law Office of David W. Klasing, our dual-licensed California State Tax Attorneys in San Bernardino will help your understanding of the stages of an audit, criminal tax investigation, tax crime indictment, and prosecution, as well as the red flags that may pique the interest of the IRS or the California Franchise Tax Board (FTB), California Department of Tax and Fee Administration (CDTFA) and the Employment Development Department (EDD) and trigger the entire sequence. In addition to preparing for your audit and negotiating on your behalf throughout the examination process, we also provide California tax appeals representation. If you disagree with the results of your audit, our attorneys can help you challenge the outcome, vigorously disputing improper penalties, interest charges, or proposed tax assessments. Call us today at (888) 564-1409, contact us online, or reach our San Bernardino office directly at (415) 287-6568 for your reduced-rate initial tax consultation.
How Does the EDD Handle Payroll Tax Compliance and Worker Classification Issues?
The California Employment Development Department (EDD) deals with issues related to the state payroll tax regulations and California employment tax. Employers must take payroll taxes out of their employees’ checks and hold the money in trust to eventually turn over to the appropriate state or federal agency. Payroll tax issues can come up in federal audits in addition to audits by the EDD. If you are not taking the proper amount out of your employees’ paychecks or failing to turn the money held in trust over as required, you could face civil or criminal tax penalties.
Most of the issues in these audits relate to disputes about whether an individual is an employee or an independent contractor. Payroll taxes are not required to be taken out of checks paid to independent contractors. There are various ways that the California state calculates who is and is not an independent contractor. Our experienced San Bernardino Tax Audit Attorney+CPA can help gather evidence to show the EDD you have correctly classified workers as independent contractors.
Note: with the passing of AB5, worker classification audits are on the rise.
What Types of Employer Fraud Does the EDD Investigate and Prosecute?
The EDD actively investigates and prosecutes instances of payroll tax evasion and related fraudulent activities. Some specific examples of employer fraud that are criminally prosecutable by the EDD include:
- Assisting others in filing false Unemployment Insurance claims;
- Paying employees “under the table” or failing to report their wages appropriately to the EDD;
- Neglecting to report the hiring of new employees and incorrectly reporting their start dates;
- Withholding taxes from employee wages but not reporting these wages or remitting the payroll taxes to the EDD and other relevant agencies;
- Demonstrating a pattern of opening and closing accounts with the EDD, leaving unpaid tax balances, often with each employer registration under different business and owner names;
- Making false statements to the State Compensation Insurance Fund to reduce Workers’ Compensation Insurance costs;
- Providing misleading information to disqualify current or former workers from benefits they are entitled to.
Whether you are concerned about a criminal tax investigation, need assistance preparing for a payroll tax audit, or simply wish to review your company’s payroll tax procedures for accuracy and efficiency, rely on our dual-licensed California employment tax attorneys and CPAs at the Tax Law Office of David W. Klasing in San Bernardino for award-winning support.
What Should I Do If I’m Facing an FTB Tax Audit in San Bernardino?
FTB tax audits generally arise from issues with taxpayers’ California personal income tax or business tax returns. For example, the taxpayer might have claimed an expired tax credit or utilized an abusive tax shelter. Other common “problem areas” that trigger state audits include unfiled California income tax returns, delinquent returns, and the underreporting of income. Our FTB tax audit lawyers have experience representing all types of taxpayers against the Franchise Tax Board, including individuals, C corporations, S corporations, LLCs, partnerships, nonprofit organizations, freelancers, and independent contractors.
Our experienced dual-licensed San Bernardino FTB Tax Attorney & CPAs will work to resolve any issues associated with an FTB audit before it becomes problematic. We will also help negotiate an installment plan if you are found to owe money to the FTB as well as in:
How Can I Navigate a CDTFA Tax Audit for Sales and Use Tax Compliance in San Bernardino?
CDTFA tax audits frequently involve sales and use tax issues, particularly concerning internet sales tax compliance – a recent consequence of the Supreme Court’s 2018 ruling in South Dakota v. Wayfair, Inc. Our experienced dual-licensed San Bernardino Sales Tax Attorneys & CPAs will help you collect the proper documents and communicate with the CDFTA on your behalf. Once the audit is complete, we can challenge any issue we see at the exit interview with the auditor and their supervisor. If the CDTFA closes the case and sends a Notice of Determination, we will help you file a petition within 30 days to challenge it. If the petition is not filed promptly, you must pay whatever amount they have determined you owe, and your business could face severe collection-related consequences.
If you think the results of an audit are incorrect and wish to dispute the findings, we will walk you through the process for appealing an audit and act on your behalf throughout, ensuring you file the appropriate paperwork, meet all legal deadlines, and satisfy other criteria for making a robust appeal. We stand ready, willing, and able to litigate a Federal or California tax issue, should it become necessary. However, in our experience, most issues can be settled before an expensive trial.
How Long Can You Be Audited in California?
Many taxpayers know that, depending on the circumstances, typically, the IRS has three to six years to audit a taxpayer, with some exceptions. However, different statutes of limitations apply in the state of California. The Franchise Tax Board can potentially initiate an examination for up to four years, giving the state an additional 12 months. Moreover, either a state or federal tax audit may be commenced at any time in cases where the taxpayer has allegedly committed tax fraud and/or has failed to file income tax returns. The FTB and IRS may communicate information throughout the auditing period, meaning an FTB audit could lead to an IRS tax audit or vice versa.
California State Tax Audit and Appeals Attorneys in San Bernardino
If you or your business was chosen for an FTB tax audit, CDTFA tax audit, or EDD tax audit, you must take swift action to protect your rights and thoroughly prepare for the examination. At the Tax Law Office of David W. Klasing, our dual-licensed Tax Audit Defense Attorneys and CPAs have nearly three decades of experience representing taxpayers in FTB tax audits, CDTFA tax audits, and other types of California audits in San Bernardino. Additionally, our founder, David W. Klasing, has over a decade of public auditing experience, positioning our award-winning tax firm to deliver strategic, intelligent, and effective representation throughout all stages of the auditing process.
If you have been notified of an upcoming state tax audit in San Bernardino or wish to dispute the results of a California tax audit that has already been completed, contact us at the Tax Law Office of David W. Klasing online here or by calling our San Bernardino office at (909) 991-7557. Please note that our San Bernardino office is by appointment only.
Our San Bernardino Office is Conveniently Located at:
473 E Carnegie Dr #200
San Bernardino, CA 92408
(909) 991-7557
