San Diego, CA Tax Audit Lawyer
If you have been chosen for an audit in San Diego, make sure that you are represented by a tax attorney with a long track record of success in tax audit defense. Not only have the San Diego audit lawyers at the Tax Law Office of David W. Klasing represented thousands of individuals and businesses in these matters – in addition, our founding attorney is himself a former auditor, bringing our practice an unparalleled level of insight into audit defense and tax appeals and litigation.
Whether the audit pertains to employment tax, sales tax, income tax, undisclosed foreign bank accounts and non-reported foreign income, worker classification, or other issues, our San Diego tax audit attorneys can enter at any stage of the process to help you prepare, negotiate with your auditors, and if necessary, defend you against potential criminal tax allegations. We can also work to minimize any tax, penalties and interest you may ultimately be facing, and are prepared to protest, appeal and or litigate vigorously if the auditor makes a mistake or oversteps his or her authority based on the unique facts or the tax law underlying your audit.
How to Handle an IRS, FTB, EDD, or CDTFA (formerly known as the BOE) Tax Audit in San Diego
If you are selected for an audit, you will receive one of various letters that are used by the Internal Revenue Service (IRS), the California Franchise Tax Board (FTB), the California Employment Development Department (EDD), and the California Department of Tax and Fee Administration (CDTFA) to notify taxpayers. The notice you will receive depends partially on the nature of the audit. For example, the IRS will issue Form CP06 if the purpose of the audit is to confirm the accuracy of your return while Form CP75 is used for audits arising from the Earned Income Tax Credit (EITC).
Regardless of whether a tax audit is being overseen by the IRS, the FTB, the EDD, or the CDTFA – a new agency formerly known as the Board of Equalization (BOE), whose duties have been largely assumed by the CDTFA with support from the Office of Tax Appeals (OTA) – it is vital that the taxpayer is prepared, has available the appropriate financial documentation, and has a clear understanding of his or her legal rights during the audit. Due to the complexity of the Federal and California Tax Code – and the gravity of the consequences for intentional noncompliance – it is unwise to enter an audit without appointing a personal representative, such as a tax audit defense attorney or better yet, a dually licensed Attorney-CPA, to act on your behalf. If you have received an audit notification, your first step should be contacting a San Diego tax audit attorney, who will be able to facilitate the process for you while ensuring that excessive tax, penalties and interest are not improperly assessed.
Eggshell Audits and Criminal Tax Investigation Representation
Audits can be categorized in various ways: for example, IRS tax audits versus FTB tax audits. Some audits target individuals, while others focus on business entities – most often, C corporations and sole proprietorships. Audits can also follow different formats: namely the field audit (in which the auditor travels to the taxpayer’s home and/or business to investigate), the correspondence audit (in which auditor and taxpayer communicate by exchanging documents in the mail), and the office audit (in which the taxpayer travels to an IRS field office, such as the field office located on Front Street in downtown San Diego).
Another, lesser known, but highly dangerous type of audit is called an “eggshell audit.” Stated simply, an eggshell audit is an audit involving substantial reporting errors on one or more of your tax returns resulting in a substantial amount of tax due that the government could potentially suspect was caused by a willful intent to evade an assessment of tax. For example, you may be selected for an eggshell audit because you reported dramatically less income than you earned, or because you wrongfully claimed a tax credit that you did not legally qualify to receive.
During an eggshell audit, the auditor will be paying special attention to indicators known as “badges” of fraud: indicators that the taxpayer intentionally violated the Tax Code. Examples of badges of fraud include the lack (or destruction) of supporting taxpayer records, a pattern of failure to file tax returns, and the intentional concealment of offshore income generating assets or businesses along with the non-disclosure of offshore bank accounts and the non-filing of required offshore information or tax returns.
If the auditor discovers that fraud has occurred, what began as a civil audit can turn criminal, plunging the taxpayer into deeper legal and financial danger. An experienced eggshell audit lawyer in San Diego can reduce the danger by presenting evidence in such a way as to dispel the auditor’s concerns that the taxpayer has engaged in fraud.
San Diego Audit Defense Attorneys for Businesses and Individuals
Finding out that you have been selected for audit is a nerve-wracking experience. This is particularly true for taxpayers who may not have always complied with California or federal tax laws in the past. The discovery of noncompliance can result in stiff penalties, including fines, restitution, and potential for criminal tax prosecution.
Even if you are confident that you have obeyed the laws, it is vital to ensure that you have a knowledgeable advocate looking out for your best interests should the auditor make an error or infringe upon your legal rights as a taxpayer. If the auditor assesses additional tax, penalties and interest your tax attorney can verify whether the amount is correct and help to negotiate an installment plan – or if necessary, dispute the tax assessment aggressively through the appeals process or via tax litigation.
The Tax Code is complex and IRS audit positions are presumptively correct with the courts making taxpayers vulnerable during an audit and forced to shoulder the burden of proof in the appeals / tax litigation process. Get peace of mind that your audit or appeal is in competent hands by hiring a trustworthy and experienced tax audit lawyer in San Diego today. For a reduced-rate consultation, contact the Tax Law Office of David W. Klasing online, or call our tax firm at (619) 780-2538 or (800) 681-1295.
San Diego Tax Law Offices
For any of your tax planning compliance and controversy needs in San Diego, contact the Lawyers at The Tax Law Offices of David W. Klasing today. Our experienced Tax Lawyers offer a reduced-rate consultation on new cases or engagements. Call (619) 780-2538 or 800-681-1295 or contact us online today to schedule a reduce rate initial consultation at our San Diego tax law offices, or at one of our other convenient locations across Southern California.