Awards & Recognition
If you or your small to middle market business has been chosen for a Federal or California tax audit, look to the San Bernardino audit attorneys at the Tax Law Office of David W. Klasing for powerful advocacy. With over three decades of tax audit experience – including more than a decade of auditing experience – our tax attorneys and CPAs pride ourselves on providing responsive, insightful audit representation for businesses and individuals, including expats, non-citizens, and online companies.
Our objective is to protect your rights and support your best interests at all stages of the California audit process, negotiating with auditors to achieve a cost-efficient resolution while bringing you into compliance with federal and state law. Our San Bernardino tax lawyers are also prepared to assist you with the appeals process to challenge an unfair or inaccurate tax assessment, should you disagree with the initial results of your audit. When you need a proactive, knowledgeable tax audit lawyer in San Bernardino, California, depend on the Tax Law Office of David W. Klasing for award-winning service.
How Many Years Can You Be Audited in California?
The IRS is not the only government agency which audits taxpayers. In the state of California, there are several additional tax agencies which also audit businesses and individuals, including the Franchise Tax Board (FTB), the California Department of Tax and Fee Administration (CDTFA), and the Employment Development Department (EDD). Even foreign or out-of-state businesses, including online retailers and internet sellers, may be targeted for a California tax audit if the company does business in the state of California.
The number of years a tax audit may be conducted in California, which is restricted by the statute of limitations, depends on the situation. For example, the FTB is generally permitted up to four years to conduct an audit. However, certain factors can impact the statute of limitations, giving the FTB unlimited time. For instance, this can occur if a business or individual does not file state income tax returns. It is also important for business owners to note that inactive LLCs and corporations which do not file and pay timely taxes risk being dissolved under recently adopted state laws.
Common Reasons for Tax Audits in California
It is important not to panic upon receiving notification of a California tax audit. There are various reasons why you or your small business might have been selected for an examination by the IRS, FTB, EDD, or CDTFA – including random computer selection, owning your own business, or even reporting a high level of income.
In most cases, examinations are initiated because the pertinent tax agency has detected some sort of anomaly, mismatch, or omission which bears further investigation – not only to ensure that the taxpayer has complied with federal and state tax law, but also to determine whether tax fraud has occurred. Indicators (“badges”) of tax evasion that commonly trigger audits or even “eggshell audits” include:
- Claiming a large number of tax credits or business deductions
- Failing to file state tax returns
- Filing late tax returns
- Underreporting or overreporting income
- Using abusive tax shelters
- Using another taxpayer’s personal information
In particular, sales tax audits of online businesses are now becoming more common in California due to a recent court ruling, which our sales tax audit attorneys discuss in depth here. Cash-based businesses, such as convenience stores, are also susceptible to tax audits due to concerns over cash and tax fraud.
What if You Disagree with the Results of an IRS, FTB, EDD, or CDTFA Audit?
If an auditor makes mathematical errors, incorrectly applies tax regulations, or deviates from accepted auditing standards, he or she can reach flawed conclusions that cost the taxpayer money. If you believe that the IRS, FTB, CDTFA, or EDD proposed an incorrect tax assessment, or incorrectly applied penalties or interest charges, you can dispute the results of your audit through mediation, the appeals process, or if necessary, tax litigation. Our California tax attorneys can help you prepare the strongest possible legal arguments for your IRS, CDTFA, EDD, or FTB tax audit appeal, assembling a comprehensive tax court petition, or letter of protest in support of your claim.
The Tax Law Office of David W. Klasing has successfully assisted numerous taxpayers file appeals with the IRS Appeals Office and the CDTFA’s, BOE and EDD’s Office of Tax Appeals (OTA), which, since its creation in 2017, has assumed many of the duties formerly handled by the Board of Equalization (BOE), which previously oversaw tax appeals in California prior to the Taxpayer Transparency and Fairness Act of 2017. However, the BOE remains responsible for certain appeals involving California property taxes.
San Bernardino Tax Lawyers and CPAs for IRS, EDD, CDTFA, and FTB Audits
IRS, FTB, EDD, and CDTFA tax audits proceed along complex guidelines that make it challenging for even well-prepared taxpayers to represent themselves successfully. You are at greater risk of being fined, unfairly charged interest, or potentially even being incarcerated if you approach a federal or state tax audit without skilled representation. Working with an experienced tax lawyer makes the process easier and more efficient, while also affording you the protection of the attorney-client privilege, which can prove invaluable during a sensitive audit.
To discuss a tax audit in California, or the procedures for appealing an audit’s outcome, contact the Tax Law Offices of David W. Klasing online for a reduced-rate consultation. You can also reach us by calling our San Bernardino tax office at (909) 991-7557, or our main office in Irvine at (800) 681-1295. Please note meetings at our San Bernardino location are by appointment only.
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.
