Awards & Recognition
Operating a childcare business requires hard work, long hours, and a commitment to providing families with the highest level of service possible. It also requires careful tax planning, along with sound bookkeeping and accounting practices. Inefficient or outdated accounting systems can cost your company valuable opportunities, while the failure to comply with state or federal tax laws places your business in danger of civil fines, a tax audit, or even an IRS criminal tax investigation.
Protect your business and nurture its growth by working with the Santa Barbara tax attorneys at the Tax Law Office of David W. Klasing. Providing service to LLCs, partnerships, corporations, nonprofit organizations, and individuals, we deliver award-winning, 24-hour tax and accounting services for home daycares, live-in nannies, au pairs, babysitters, and other professional childcare providers. Whether you need help preparing for an IRS audit, disputing the results of an audit, fighting back against criminal tax charges, starting your own daycare business, exploring childcare tax credits and deductions, or simply filing your income tax returns, our tax lawyers and CPAs are standing by to provide guidance.
Santa Barbara Tax Audit Lawyers for Home Daycare Providers
Our Santa Barbara tax audit lawyers provide dedicated legal representation in state and federal audits. We represent daycare providers before the Internal Revenue Service (IRS), Franchise Tax Board (FTB), California Department of Tax and Fee Administration (CDTFA), and Employment Development Department (EDD), in addition to the IRS Independent Office of Appeals and California Office of Tax Appeals (OTA). Our childcare provider tax audit lawyers can assist you with:
- Correspondence audits
- Criminal tax audits
- Desk audits (office audits)
- Field audits
- Foreign account tax audits
- State or federal employment tax audits
- State or federal income tax audits
- Worker classification audits
See our Employment Tax Law Q and A Library
Why Did the IRS, FTB, CDTFA, or EDD Choose My Childcare Business for a Tax Audit?
Childcare and daycare providers are frequently targeted for income tax audits – not only by the Internal Revenue Service, but also by state taxing authorities, such as the FTB, which administers California’s corporate and personal income tax regulations. Receiving cash payments, owning your own business, or failing to register your business all increase your risk of an audit, placing many home daycare operators in jeopardy. Widespread fraud involving the Child Tax Credit and similar tax credits has also attracted an increased level of scrutiny from taxing authorities.
Needless to say, tax errors or violations bring the risk of an audit even higher. For example, you are likely to be audited if you have unfiled tax returns, owe state or federal back taxes, have unreported or underreported income, have unreported foreign bank accounts, failed to classify one or more of your workers properly, and/or repeatedly filed late (“delinquent”) returns. The improper claiming of tax credits and deductions is another common audit trigger for small businesses.See our Non-Filer Q and A Library See our 2011 OVDI Q and A Library
See our FBAR Compliance and Disclosure Q and A Library
Can You Be Charged with Tax Evasion or Other Crimes Because of a Civil Tax Audit?
Yes. In fact, a significant portion of criminal tax cases begin with civil tax audits, with smaller numbers originating from tax fraud referrals or other sources of information. If an auditor (“revenue agent”) uncovers indicators of tax fraud (“badges of fraud”) during the examination of an individual or business entity, he or she will terminate the audit and refer the case to the IRS Criminal Investigation division (IRS-CI), whose agents (“special agents”) may use investigative methods such as:
- Contacting third parties (such as banks)
- Issuing subpoenas
- Obtaining search warrants for the taxpayer’s home, place of business, or other location where financial records are stored
- Placing the taxpayer under surveillance
If IRS-CI determines that there is evidence of tax evasion or tax fraud, the case may be referred for criminal prosecution. At the federal level, most cases are prosecuted by the Tax Division of the United States Department of Justice (DOJ).
Note: As long as a taxpayer that has willfully committed tax crimes self-reports the tax fraud (including a pattern of non-filed returns) through a domestic or offshore voluntary disclosure before the IRS has started an audit or criminal tax prosecution, the taxpayer can be successfully brought back into tax compliance and receive a nearly guaranteed pass on criminal tax prosecution and simultaneously receive a break on the civil penalties that would otherwise apply. It is imperative that you hire an experienced and reputable tax defense attorney to take you through the voluntary disclosure process. As uniquely qualified and extensively experienced Criminal Tax Defense Tax Attorneys, Kovel CPAs and EAs, our firm provides a one stop shop to efficiently achieve the optimal and predictable results. See our Testimonials to see what our clients have to say about us!
How Do I Appeal the Results of a California or Federal Tax Audit if I Disagree with the Outcome?
Auditors occasionally make errors or overlook vital pieces of information, which can lead to improper findings by the IRS, FTB, or other taxing authorities. If you believe that the results of your audit are incorrect, you can dispute your auditor’s findings by requesting appeals.
Taxpayers may appeal the results of both state and federal tax audits. To request an appeal, the taxpayer must provide the appropriate taxing authority with an “opening brief” or “protest letter,” which sets forth the taxpayer’s argument along factual, objective lines. Legal statutes, court rulings, and IRS documents can all be used to help support the taxpayer’s argument. In certain situations, the taxpayer may file a petition in U.S. Tax Court, essentially suing the IRS.
A tax litigation attorney or IRS appeals lawyer should represent you in either process. The audit and litigation cycle is exceedingly difficult for pro se taxpayers to navigate successfully, but having competent legal counsel improves the odds of obtaining a favorable outcome.See our Tax Litigation Q and A Library See our IRS Appeals Q and A Library
Santa Barbara Tax Lawyer + CPA for Childcare Providers and Daycare Centers
At the Tax Law Office of David W. Klasing, we have more than 20 years of experience working with childcare and daycare providers. Our business tax lawyers and CPAs serve local businesses in Santa Barbara, “foreign” (out-of-state) companies that do business in California, and multinational entities that have complex international tax compliance requirements. Contact us online right away to set up a reduced rate appointment, or call the Tax Law Office of David W. Klasing in Santa Barbara at (805) 200-4053. Please note meetings at our Santa Barbara location are by appointment only.See our Entity Selection Q and A Library
See our Business Purchases and Sales Q and A Library
See our Business Succession Q and A Library
Note: If you have concerns about the privacy of our initial or subsequent communication and are unable to easily travel to our Irvine / Orange County Main Office, consider scheduling a GoToMeeting to safely and securely establish an initial or maintain an existing attorney client relationship. With end-to-end encryption, strong passwords and top-rated reliability, no one is messing with your meeting. To schedule a reduced rate initial consultation via GoToMeeting follow this link. Call our office and request a GoToMeeting if you are an existing client. We are generally happy to travel to any of our appointment only satellite offices for a subsequent meeting in appropriate circumstances once a relationship is established via a signed engagement letter and the payment of an initial retainer or where enough retainer is available where a current client to cover the reasonable travel time and time required for the meeting.
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
