Awards & Recognition
Like IRS auditors, California state tax auditors are trained to seek out and identify numerous tax fraud indicators and other informational discrepancies in your tax documents. The Franchise Tax Board (FTB) and other California tax agencies, including the California Department of Tax and Fee Administration (CDTFA) and the Employment Development Department (EDD), may audit you or your business for excessive claiming of credits or deductions, underpayments of state taxes, underreported income, unfiled or delinquent tax or information returns, and unreported sources of income. This is far from exhaustive, and many other potential triggers exist for a California state tax audit.
Whether you are a longtime resident of Santa Barbara, are a local business owner, or recently moved to Santa Barbara from another state or country and aren’t sure of your filing obligations, turn to the Tax Law Office of David W. Klasing for comprehensive personal and business tax support. To arrange a reduced-rate consultation, contact us online here or call our Santa Barbara tax office at (805) 200-4053. We excel in addressing complex, high-risk tax dilemmas. Whether assisting online vendors with California’s evolving sales tax regulations or steadfastly supporting businesses during high-risk California state tax audits, our strategic interventions aim to curtail your tax liabilities and safeguard you from potential civil or criminal tax repercussions.
In addition to having years of experience as a dually licensed Tax Lawyer and CPA in Santa Barbara, our founder and principal attorney, David W. Klasing, possesses decades of experience as a former auditor in public accounting and has represented clients in federal (IRS) and California (FTB, CDTFA (BOE), EDD) audits for nearly three decades, enabling our tax team to navigate the audit process with precision and skill.
How Can I Navigate Sales Tax Audits and Recent Tax Law Changes in Santa Barbara?
Businesses in Santa Barbara, known for its vibrant cultural scene and dynamic economy, must be diligent about accurately remitting sales taxes to the California Department of Tax and Fee Administration (CDTFA). Discrepancies such as failing to remit collected taxes or improperly taxing transactions can trigger California sales tax audits, which are frequent given the significant portion of the state’s revenue derived from sales tax. A sales tax audit can be particularly daunting for businesses in high-risk sectors. If your Santa Barbara business is selected for an audit, it’s crucial to remain calm and promptly seek assistance from our dual-licensed Santa Barbara Sales Tax Attorneys & CPAs. With expertise in navigating the complexities of California’s tax regulations, our team can help ensure that your business is compliant and well-prepared to handle any audit.
In light of recent changes in California sales tax laws, especially following the U.S. Supreme Court’s Wayfair decision, which expanded state authority over online sellers, our dual-licensed Santa Barbara Internet Sales Tax Attorney & CPAs are invaluable. We offer services such as:
- Internet sales tax audit representation
- Small business tax planning
- Bookkeeping
Leveraging our deep understanding of the evolving tax landscape, our attorneys and CPAs are well-versed in the nuances of California sales tax nexus and the distinctions between sales and use tax, providing comprehensive advisory and representation. Additionally, our customizable range of business tax planning services supports corporations, LLCs, partnerships, and sole proprietorships in Santa Barbara, ensuring each business receives targeted, practical guidance tailored to its unique needs. We provide reliable and strategic support, whether you are starting a new business, preparing for an employment tax audit, or appealing a Franchise Tax Board decision. Contact us online here or call our Santa Barbara tax office at (805) 200-4053 today.
How to Handle a California Franchise Tax Board (FTB) Audit
The California Franchise Tax Board (FTB) is responsible for audits related to your California income tax returns. These audits typically focus on:
- Suspected underreporting of income,
- Overstated deductions
The FTB is also informed of the results of any IRS audit and will either:
- Conduct their own audit;
- Piggyback off the federal audit and send you a bill for what you owe to the state, along with additional penalties for not voluntarily amending your state return
Sometimes, the FTB audits on California-specific issues, such as whether you are correctly claiming state residency. Note that:
- Even if an IRS audit shows that you do not owe money to the federal government, you may owe money to the state of California due to differences in state tax laws.
- Our FTB Tax Attorneys can help you understand these state-specific issues and work out a payment plan with the FTB if you indeed owe money.
If you disagree with the results of an FTB audit, you may challenge or “protest” the outcome. If FTB has contacted you and you know you made false statements or used inaccurate reporting techniques when filing your taxes, do not face the audit alone. Our experienced dual-licensed FTB Audit Appeals Attorneys and CPAs will act as a barrier and stop the examining agent from inferring criminal admissions/confessions from your actions and words. To speak with our Santa Barbara Tax Audit Lawyers and CPAs in a reduced-rate consultation, call (805) 200-4053 or (888) 640-3408 or contact the Tax Law Office of David W. Klasing online.
What Should I Do if My Business Faces an EDD Audit in Santa Barbara?
The California Employment Development Department (EDD) primarily ensures that businesses pay proper payroll taxes. Businesses are required to:
- Withhold payroll and income taxes from their employees’ checks;
- Remit these taxes to the appropriate government agency
If you fail to withhold the correct amount or remit the taxes properly, you could be charged back taxes and associated penalties.
Many EDD audits are related to whether an individual should be classified as an employee or an independent contractor. Key points include:
- Employers must withhold payroll and income taxes for employees but not for independent contractors;
- The EDD often challenges the classification of individuals as independent contractors if they believe they should be classified as employees;
- The process of determining the correct classification can be quite complex.
At the Tax Law Offices of David W. Klasing, we will help you prove that you have been classifying workers correctly or assist with damage control if you have not. Our experienced dual-licensed EDD Tax Audit Attorneys & CPAs can help gather evidence to show the EDD you have appropriately classified workers as independent contractors. We are experienced in working with both state and federal auditors and can successfully navigate the challenges an audit presents. To schedule a reduced-rate consultation with one of our experienced tax professionals, call 888-640-3408 or contact us online today.
How to Handle a CDTFA Audit in Santa Barbara
The California Department of Tax and Fee Administration (CDTFA) conducts audits primarily focused on sales tax issues for businesses. If your Santa Barbara business is selected for a CDTFA audit, it may be due to:
- Failing to charge the correct amount of sales tax;
- Charging sales tax but failing to remit it to the state government as required
The CDTFA will request access to all your books and sales records to verify that your reported sales and taxes match your transactions. They also send undercover officers into businesses to check if sales tax is being charged properly. This is particularly common to cash-based firms suspected of cash skimming or using zapper programs.
Why is a CDTFA Audit So Complex?
A CDTFA audit can be one of a business owner’s most complex and stressful experiences. This type of audit requires:
- Providing extensive records
- Explaining your business practices in detail
An experienced tax attorney can help you prepare for dealing with the CDTFA, ensuring that all necessary documentation is filed timely and correctly. For instance, if the original auditor closes the case and issues a Notice of Determination indicating that you owe money, you must file a petition to challenge this within 30 days, or the Notice will become final.
Recent Updates and Appeals
The CDTFA has recently updated its guidance on protocols and procedures for disputing, or “appealing,” CDTFA determinations. Despite their efforts to provide clear instructions for taxpayers, handling an appeal without professional tax representation is not advisable. These cases’ legal and financial complexities make it crucial to consult with experienced dual-licensed CDTFA Audit Attorneys & CPAs. They can guide you through filing an appeal or petition for redetermination, helping to protect your interests and navigate the intricate regulatory framework.
Additional Services We Offer
We provide a range of services to help you manage tax-related issues, including:
- Tax Debt Relief
- Bankruptcy
- Innocent Spouse Relief
- Offers in Compromise (OIC)
- Assistance for Non-Filers
Contact Our Santa Barbara Office Today for all IRS, FTB, CDTFA, and EDD Tax Audit Needs
An FTB, EDD, or CDTFA tax audit can spell financial peril for you and your business. Take steps to protect yourself by consulting with an award-winning tax audit and appeals lawyer serving Santa Barbara, CA. We are always ready to deliver the counsel and guidance your business requires. To set up a reduced-rate appointment, contact the Tax Law Office of David W. Klasing online or call our Santa Barbara tax office today at (805) 200-4053.
Our Santa Barbara Office is Conveniently Located at:
7 W Figueroa St.
Santa Barbara, CA 93101
(805) 200-4053
