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In Santa Barbara, businesses that collect sales tax from their customers are entrusted with remitting those taxes back to the California Department of Tax and Fee Administration (CDTFA), formerly known as the State Board of Equalization (BOE). Any discrepancies, such as failing to pay collected taxes or having revenue that’s not appropriately taxed, can trigger a California sales tax audit by the CDTFA. Given the significance of sales tax, which accounts for over 80% of the Department of Tax & Fee Administration (CDTFA) revenue collection, California state tax audits are standard, especially for businesses in specific high-risk industries. If you find your business selected for a California sales tax audit, it would be wise to remain composed and promptly contact our dual-licensed Santa Barbara Sales Tax Attorneys & CPAs.
Sales tax audits by the CDTFA can be intrusive and require large amounts of records. If the CDTFA believes you owe back taxes, working out a settlement at the audit stage may be in your best interest. At the Tax Law Offices of David W. Klasing, our seasoned tax attorneys have decades of experience negotiating with the CDTFA and helping to bring our clients’ cases to a successful conclusion. Call 805-200-4053 or schedule a reduced-rate initial consultation here at our Santa Barbara office or one of our other convenient locations across Southern California.
Whether it’s assisting online vendors with California’s evolving sales tax regulations or steadfastly supporting businesses during high-risk IRS audits, our strategic interventions aim to curtail your tax liabilities and safeguard you from potential civil or criminal tax repercussions. From meticulously managing amended tax returns to handling intricate IRS home, office, correspondence, eggshell, or reverse eggshell tax audits, we always place your interests at the forefront, ensuring minimized risks and solutions tailored to your needs.
Overview of a Sales Tax Audit in Santa Barbara
A sales tax audit aims to determine whether a taxpayer has paid the state the correct sales tax amount. In California, the California Department of Tax and Fee Administration (CDTFA) conducts these audits to discover revenue that has not been correctly taxed or where sales tax was collected but not remitted. These audits promote compliance with California state tax laws and serve as a means to increase state revenue. Most California companies are audited periodically.
Audit Guidelines and Procedures
- Governing Policies: Audits by the CDTFA are governed by policies and procedures outlined in an annual audit publication;
- Access to Guidelines: The audit guidelines, along with recent changes to sales and use tax audits, can be accessed on the CDTFA’s website;
- Audit Period: A typical sales tax audit covers a three-year look-back period.
Role of the Auditor
A CDTFA auditor conducts sales tax audits to determine a business’s compliance with its tax obligations. The auditor’s tasks include:
- Impartial Evaluation: Working impartially to assess whether the business has made under or overpayments of sales taxes;
- Reference to Records: Referring to the records a business owner must keep and provide per Regulation 1698 Records;
- Requesting Third-Party Records: If necessary, request records from government agencies or other businesses, such as wholesalers.
How Will The Tax Law Offices of David W. Klasing Help Me Prepare for a Sales Tax Audit?
Business owners should retain business records for at least the preceding four years to prepare for a CDTFA audit. Typically, the CDTFA will notify the business before conducting an audit, allowing preparation time. At the Tax Law Offices of David W. Klasing, we can assist in several critical areas to ensure you’re adequately prepared for a sales tax audit:
Audit Notice
Receiving an audit notice can be overwhelming, even for sophisticated business owners. Many might panic or take rash actions, while others may deny the existence of a problem. Both approaches can cause more harm than good. The audit notice will state the reasons behind the audit, but it is always advisable to meet with an experienced tax lawyer before contacting the agent. We can help you understand the notice and strategize your response;
Audit Response Filing Timing
The audit notice will contain information about the amount of time you have to reply. Our experienced dual-licensed Santa Barbara Sales Tax Attorney & CPAs will assist you in preparing and filing a response before your time has elapsed, ensuring that you meet all deadlines and present your case effectively.
Books and Records
Business owners must ensure that their books and records are accurate and complete when filing a sales tax return, as filing may trigger an audit. Insufficient books and records often form the basis of severe tax problems. While it is ideal to review your documents before an audit request is received, our attorneys can still work with you to prepare for an audit if you have already received notice. We will help you gather and organize the necessary documentation to support your sales tax filings;
Initial Notification
During the initial telephone call or in-person notification, the auditor will ask about the type of business, the extent of operations, and the type of records kept. We can guide you on how to respond to these inquiries and what information to provide;
Record Preparation
The auditor will inform the business of the records that should be available for the sales tax audit. We will ensure that all required documents are gathered and adequately presented;
Representation
If you wish to have an attorney, accountant, or other authorized representative handle the audit on your behalf, inform the auditor, provide contact information, and allow your representative to manage these and other questions. At the Tax Law Offices of David W. Klasing, we have decades of experience representing clients during audits and can handle all interactions with the auditor to protect your interests.
Expertise in Internet Sales Tax for Santa Barbara Businesses
With recent overhauls in sales tax laws, especially after the U.S. Supreme Court’s in Wayfair granting states more power to enforce compliance over online sellers, it would be wise to have our dual-licensed Santa Barbara, CA Internet Sales Tax Attorney + CPA by your side. From internet sales tax audit representation to small business tax planning and bookkeeping services, we possess the experience to answer your business tax questions and help you achieve your goals. Our expertise spans from understanding the sales tax nexus and differentiating between sales and use tax to assisting with the complexities introduced by internet sales. Trust our Santa Barbara Sales Tax Audit Attorneys to provide comprehensive sales tax advisory and representation, ensuring your business thrives in Santa Barbara’s complex regulatory environment.
Santa Barbara Sales Tax Lawyer and CPA for Audit and Appeals Representation
At the Tax Law Office of David W. Klasing, our innovative, forward-thinking team of dual-licensed Sales Tax Audit Attorneys and CPAs provides sales and use tax audit and appeals representation, criminal tax defense representation, and business bookkeeping and tax planning and compliance services for all kinds of businesses statewide. Whether you are facing a sales or use tax audit, are concerned about criminal tax exposure, or have questions about best practices for bookkeeping and accounting, tax planning, or tax compliance, rely on our dual-licensed California Tax Lawyers and CPAs for clear and trustworthy guidance. David W. Klasing is a dually licensed tax attorney and CPA with decades of experience as a former auditor, having worked for various public accounting firms. As such, he can often accurately anticipate auditors’ approach and craft a strategy to meet these challenges. He employs his unmatched education and experience to fiercely advocate for our clients in their sales tax audit challenges.
Our commitment to providing above-and-beyond tax audit defense representation is evident in our A+ BBB rating and glowing testimonials. With competitive billing rates, a team of nationally recognized and highly qualified dual-licensed Attorney CPAs, and a dedication to achieving optimal results for each client, the Tax Law Offices of David W. Klasing stands as a beacon of excellence in addressing IRS and California state tax concerns. To schedule a reduced-rate initial consultation regarding your audit or criminal tax investigation/prosecution, call our Santa Barbara office at 805-200-4053 or 800-681-1295 or schedule online today.
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; and Washington, D.C.
Our Santa Barbara office is conveniently located at:
7 W Figueroa St #300,
Santa Barbara, CA 93101
805-200-4053
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