4900 California Ave 2nd floor, Bakersfield, CA 93309
Bakersfield Tax Law Offices
For any of your tax planning compliance and controversy needs in Bakersfield, 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 (661) 432-1480 or 800-681-1295 or contact us online today to schedule a reduce rate initial consultation at our Bakersfield tax law offices, or at one of our other convenient locations across Southern California.
4900 California Ave, Bakersfield, CA 93309
Bakersfield Tax Attorney and CPA
For those who live and work in Bakersfield, the various local, state and federal tax regulations can be a bit overwhelming, necessitating the need for a tax attorney based in Bakersfield. As a taxpayer, you may primarily deal with federal and state tax regulations here, but you also may have some local taxes to pay.
If you find yourself confused by the various tax situations you’re facing, the last thing you want to do is complete tax forms without fully understanding what you are doing. And don’t just assume state and federal tax forms require the same information, as they may be significantly different, which causes further confusion for some Bakersfield taxpayers.
If you make a mistake in these forms, you could be subject to an audit, which could lead to penalties, back taxes, and interest payments. In certain cases, you could end up facing criminal tax charges.
When you need tax services in Bakersfield, contact the Tax Law Offices of David W. Klasing today to schedule a 10-minute call with an experienced tax attorney. As an Attorney-CPA, we offer all of the above tax services in Bakersfield and more.
One of The Best Tax Attorneys in Bakersfield
The Tax Cuts and Jobs Act (TCJA) of 2017 sought to bring clarity and simplicity to a notoriously elaborate Tax Code. However, even after extensive reforms, federal tax laws continue to cause confusion for millions of taxpayers – confusion which is only compounded by additional layers of local, state, and international tax regulations. Unfortunately, misunderstanding U.S. or California tax regulations can place a Bakersfield taxpayer, the taxpayer’s family, or the taxpayer’s business into financial or legal jeopardy. Agencies like the Franchise Tax Board (FTB) or Internal Revenue Service (IRS) may audit the taxpayer, assess penalties and interest, or even refer the taxpayer to other government agencies, such as the Department of Justice (DOJ), for criminal prosecution for willful tax evasion or other offenses.
If you are need help with a state, federal, or international tax issue, the wisest course of action is to contact a Bakersfield tax lawyer or attorney-CPA for immediate assistance. For a reduced-rate consultation about professional tax services in Bakersfield, California, contact the Tax Law Office of David W. Klasing online, or call our tax firm at (800) 681-1295 today.
International Tax Help in Bakersfield, CA
Over the past decade, the IRS has set an agency-wide priority to crack down on offshore tax evasion, which is the practice of intentionally concealing global income, foreign bank accounts, or other foreign assets in other nations or territories. These nations and territories are often, though not always, well-known tax havens such as Luxembourg, Switzerland, Bermuda, the Cayman Islands, or Singapore.
Regardless of whether the offshore location is considered to be a tax haven, the account holder generally has a requirement to disclose the foreign account(s) and foreign taxable income contained therein. With extensive experience working with California residents who have foreign accounts, citizens who are working or living abroad, and U.S. expats, our offshore lawyers in Bakersfield can help to ensure that you have met, in the safest possible manner, your obligations to report global income to the IRS. These obligations, which may be triggered if the foreign income exceeded $10,000 or $50,000 at any time during the tax year, may include the following:
- Filing a Foreign Bank Account Report, commonly known as the “FBAR” (FinCEN Form 114)
- Filing Form 8938 (Statement of Specified Foreign Financial Assets)
- Filing Form 5471 (Information Return of U.S. Persons with Respect to Certain Foreign Corporations)
Because the Offshore Voluntary Disclosure Program (OVDP) is coming to an end in 2018, it is urgent for noncompliant taxpayers to explore their disclosure options as soon as possible. Contact our international tax attorneys for prompt assistance.
Bakersfield Business Tax Attorneys for Employment and Payroll Taxes
As a business owner, you have responsibilities that do not concern most other taxpayers. First, you must ensure that your business is using the Tax Code in a way that supports the long-term financial growth of the company. Second, you must ensure that you are properly withholding, matching, and depositing payroll taxes, which are also referred to as “FICA taxes” or “trust fund taxes.” You must also take care to properly classify your workers as employees or independent contractors, ensure that any retirement plans or pensions you offer comply with ERISA (the Employee Retirement Income Security Act), determine how the company will change ownership when you are no longer at its helm, ensure compliance with California sales tax laws, and make other business and estate planning decisions that are impacted by state and/or federal tax regulations.
Our Bakersfield business tax lawyers have assisted numerous employers, investors, entrepreneurs, and shareholders with the tax planning aspects of business entity selection, business succession planning, lawfully utilizing tax havens for companies, and related matters. We provide payroll and employment tax representation in California for corporations, limited liability companies (LLCs), partnerships, sole proprietorships, non-profit organizations, clerical or religious organizations, and more.
IRS, FTB, CDTFA (BOE) and EDD Audit Defense in Bakersfield, CA
A tax audit, also known as an “examination,” can be initiated by the IRS, FTB CDTFA (BOE) or EDD depending on whether the issue in question pertains to federal taxes, such as an IRS audit for federal income tax evasion, or state taxes, such as a California sales tax audit for evasion of sales tax. Tax audit procedures vary depending on factors like why the audit is being conducted, what type of audit is being conducted (e.g. field audits versus desk audits), and the nature and severity of the issue or error underlying the audit (e.g. a negligent or purposeful and substantial understatement of income).
While these factors vary, one variable never changes: that the auditor’s goal is to uncover any crime or error, however minor, that may have occurred in your past. Depending on the issue, the statute of limitations may give the auditor three years, six years, or unlimited time to examine your records.
An audit may result in assessment of additional penalties, or even a criminal tax investigation. It is therefore crucial to be represented by an FTB tax audit lawyer or IRS tax audit lawyer from the very beginning of the audit process, starting with the first notification you receive from the state or federal government. Other than general FTB and IRS tax audits, additional types of audits we handle include:
IRS Audit Representation
One of the first questions that your Bakersfield dual-licensed Tax Attorney and CPA will ask you when you reach out about your impending audit is about the type of audit the IRSFTB, CDTFA & EDD is planning. Audits come in three different forms: correspondence audits, office audits, and field audits. Each of these forms of audit carry different timeline expectations and connotations of severity and thoroughness. You can tell which type of audit you are facing based on what the IRS says in the letter they send to notify you of the audit.
Every audit is a tiresome, time-consuming affair. However, the least intrusive form of an audit available is ordinarily a correspondence audit. These are also sometimes referred to as mail audits. For a correspondence audit, you will receive a letter from the auditor asking for more information, such as records and documents. You will reply to the auditor’s requests through mail, phone, or electronically. A tax attorney can help you reconstruct your records and reply to these requests accurately to avoid any further penalties or repercussions. It is still very important to hire and attorney if you are not being treated fairly or you have cheated on your return and you wish to avoid criminal prosecution.
If there are no additional issues presented and the taxpayer cooperates thoroughly, the process of a correspondence audit can take between three to six months from start to finish. The IRS routinely ignores taxpayer correspondence and will eventually send you a 90-day letter. If you do not file a tax court petition with 90 days of receiving the 90-day letter the assessment will become legally due and collectible even if based on faulty law or facts.
When dealing with an office audit, your notice letter will request that you bring records and documents into an IRS, FTB, CDTFA & EDD office for the auditor to review in person. The letter will also indicate the date and location of your office audit. You should always hire a dual licensed Tax Lawyer & CPA to accompany you to any meeting with the IRS, FTB, CDTFA & EDD so that you are not doing anything to further jeopardize yourself. A dual licensed Tax Attorney & CPA will endeavor to protect constitutional rights, your net worth, and your very liberty. Office audits are intended in part to be intimidating to their targets. Seventy percent of communication is nonverbal, and the auditor will be watching your body language very carefully. Having an attorney make an appearance on your behalf will save you an incredible amount of stress.
A field audit is by far the most serious type of audit. When a field audit is employed, IRS, FTB, CDTFA & EDD agents will often attempt to visit your place of business or your home to look through your books and documents themselves. They will also be attempting to explore your history of reported income versus their assessment of your standard of living and business success. These audits are usually reserved for cases where the taxpayer’s filings require assessment of complex revenue streams, serious civil assessments are suspected, or potentially criminal penalties for fraud are being considered. If the IRS does not receive the compliance that it is seeking from a correspondence or office audit, it may subsequently institute a field audit to further assess the issues with which it is concerned. It is vital that you contact an experienced tax attorney as soon as you find out a field audit is to occur.
Frequently, a field audit is accompanied by substantial risk for the audited taxpayer. It is even more dangerous if the audit is also an eggshell or reverse eggshell audit. Our dual licensed Tax Attorneys & CPAs are most effective when we are involved as soon as possible. Even if an audit ends with no major issues, the likelihood of major risk is too great to chance not hiring legal counsel.
Bakersfield Eggshell Audits
Eggshell audits present unique risks than more typical audit types. In an eggshell audit, the taxpayer knows information that could be construed as a material misrepresentation on their tax return. The auditor does not know this information. This situation is fragile for the taxpayer because one wrong step could mean admitting to a tax crime. A successful eggshell audit defense entails providing the IRS representative with responsive answers and documentation without providing excessive information that could incriminate the taxpayer, as well as potentially repairing any underpayments or misstatements on tax returns.
International companies or taxpayers with offshore assets are at particular risk for these audits. In recent years, the IRS has focused more on taxpayers likely to have offshore accounts or assets that are not reported on tax returns. In such cases, the auditor may ask general questions regarding the tax returns but not specific questions that would uncover issues on the tax return.
These audits are especially risky because the taxpayer must respond appropriately to the auditor and avoid an intentional omission or misrepresentation, which is a fine line to walk. Taxpayers will want to protect themselves from revealing information not specifically asked for. However, being too protective of this information could create elevated consequences. Since many eggshell audits are only civil investigations, the taxpayer might feel uncomfortable asserting their right to remain silent without tipping their hand and admitting they know something the IRS does not. If the IRS asks a direct question and the answer is incriminating, you are given an awkward choice between pleading the fifth, lying, withholding information, or telling the truth – all of which could potentially lead to criminal liability. Hiring our dual-licensed Tax Attorneys & CPAs will allow us to advise on appropriate responses to IRS requests.
Generally, there are three potential outcomes of an eggshell audit. The first is the most beneficial scenario in which the auditor does not discover any issues and ends the audit. Risk-tolerant taxpayers may want to take their chances and proceed with an eggshell audit without counsel while hoping for this outcome. That approach is not advised. Responding to an audit while avoiding potential landmine issues is a delicate matter that would heavily benefit from experienced legal counsel.
The second outcome is where the auditor discovered a misrepresentation or omission, but our attorneys have convinced the IRS that the matter can be resolved without a criminal tax investigation. This situation allows a dual licensed Tax Attorney & CPA to shine. The IRS does not have the resources to refer every civil audit for criminal tax investigation. If the matter is adequately resolved with recommendations from a civil audit, further criminal liability is avoided. Our attorneys can work with IRS representatives to remedy deficiencies and convince them that criminal consequences are unnecessary.
The third outcome of an eggshell audit is where the auditor refers the case to a criminal investigation. This is the most severe outcome and bears the most significant consequences. It is highly advised that our dual-licensed Tax Attorneys & CPAs are engaged in this instance to provide a criminal tax defense strategy.
Bakersfield Reverse Eggshell Audits
Reverse eggshell audits are usually the most dangerous types of IRS audits. In this instance, the IRS auditor knows or has reason to believe information that could indicate criminal liability, but the taxpayer is not aware that this information is known. This situation leads to a civil audit that contains covert criminal suspicions. The audits are extremely dangerous as taxpayers are ordinarily unaware that they are under a criminal tax investigation disguised as a civil tax audit. Unfortunately, that does not mean these audits are rare. It can be very hard to prove that a civil audit has criminal tax undertones, so a criminal tax defense attorney is absolutely critical to carefully navigate these circumstances.
Intentional misrepresentations or omissions can be the kiss of death in a reverse eggshell audit. Auditors will ask direct questions to which they already know the answer. The auditor will infer intentional deception if a taxpayer explicitly lies or does not disclose an important fact.
Using a lawyer to respond to the IRS can help ensure adequate responses are given. In this case, predicting what information the auditor knows is beneficial. Foreign accounts or assets may not be explicitly asked about, but if the auditor knows about these accounts or assets, failing to disclose them could cause problems. An attorney can inform the taxpayer of any international agreements that allow foreign governments to report such information to the U.S. or other sources of information that imply these foreign accounts or assets. Understanding what the auditor knows can help taxpayers respond to inquiries truthfully and fully.
Defending Against High-Risk Audits
A key strategy to address eggshell and reverse eggshell audits is to carefully and precisely respond to requests from the IRS. There is no criminal investigation at the audit stage yet, but one could be likely. This means that responses to the audit must adequately answer the question while not incriminating the taxpayer. Taxpayers should strike a balance between being truthful and providing too much information.
For example, an auditor could ask, “What internal accounting controls does the company have in place?” An adequate response could be, “We have an internal auditing department that adheres to federal and state auditing requirements.” An excessive response would be to go on describing the particulars of the internal auditing process. If an IRS representative has additional questions, they will ask them. Developing responsive responses to responsive questions while not providing excess information is a skill that our dual-licensed Tax Attorneys & CPAs can assist with developing.
A reverse eggshell audit, which is also a field audit, is a huge challenge to defend. Business field audits often involve interviews with employees covering a myriad of topics. Preparing these employees to respond appropriately to IRS questions is crucial to avoid excessive disclosure, and an attorney can assist with this process.
Bakersfield IRS, FTB, CDTFA (BOE) and EDD Audit Appeals Representation
It rarely is the case that a taxpayer both agrees with a Federal or California auditor’s conclusions and voluntarily consents to paying the resulting additional tax, penalties and interest. Taxpayers often disagree with an auditor’s findings, and can often find themselves financially unable to pay the additional tax, penalties and interest or other fines that have been assessed or proposed. Taxpayers that outright disagree with an auditor’s findings and wish to challenge or protest the outcome of the audit need experienced and practical representation to obtain optimal results.
The Federal and California audit appeals process is complicated, and rarely successful for the unrepresented taxpayer. It is also governed by unforgiving deadlines and procedural requirements. A tax audit attorney can help you avoid these pitfalls while giving you a better chance of successfully protesting the audit’s outcome, especially where the law and fact are squarely on your side. A Bakersfield tax lawyer can provide FTB, CDTFA (BOE), EDD or IRS appeals representation to dispute the auditor’s findings – potentially resulting in a significantly lower tax bill. An appeals attorney may be able to help the taxpayer avoid the early impositions of a State or Federal levy, tax lien, or tax garnishment where an audit goes uncontested until the end of the appeals or litigation process or by negotiating an installment agreement or offer in compromise (OIC) at the conclusion of the appeals / litigation process.
California Franchise Tax Board (FTB) Audit Representation
In addition to federal income tax filing requirements, every citizen of California that is required to file a federal return must ordinarily file state entity and personal income tax return as well. The California Franchise Tax Board (FTB) also conducts independent audits related to your state income tax filings. Sometimes, you may owe money to the state even though you did not owe money to the IRS due to the differences between state and federal tax laws. Differences between federal and California tax laws can often spark FTB audits.
The FTB also conducts independent audits if they believe potential fraud occurred on your returns. An audit by the FTB should be treated just as seriously as one by the IRS as California prosecutes tax crimes regularly. A tax attorney can help you prepare and reconstruct the necessary documents and can prevent your case from going criminal and appeal / fight any tax, penalties or interest that you believe to be unfair or incorrect and can help negotiate a reasonable payment plan for any money you ultimately do owe.
California Employment Development Department (EDD) Audit Representation
The California Employment Development Department (EDD) conducts audits related to payroll taxes that businesses are required to pay. Employers are required to take a certain amount in payroll taxes out of each employee’s paycheck and remit them to the proper state and federal agencies. If you fail to collect such taxes or fail to properly remit them, you could face back taxes as well as potential fines and penalties.
The most common issue in EDD audits relates to the classification of workers as employees vs. independent contractors especially considering California’s recent new legislation in AB5. Employers are required to collect and remit payroll taxes from employees but not from independent contractors who work for them. There are many complex rules governing who can and cannot be an independent contractor in California. A tax attorney can help you properly classify your employees and to prove to the EDD that any misclassifications you made were unintentional.
California Department of Tax and Fee Administration (CDTFA) Audit Representation
The California Department of Tax and Fee Administration (CDTFA) conducts audits related to the improper collection or remittance of California sales taxes. The rules regarding how much a business must charge in sales tax vary depending on the locality and the type of product you are selling. CDTFA often conducts random audits of businesses where sales tax issues are common, such as the restaurant and bar industry. Its not a matter of if you will be audited, it’s a matter of when. The CDTFA is famous for placing a hold on any escrow proceeds and holding them hostage while they very slowly complete a sales tax audit on any business sold in California.
These types of audits are very invasive, as the auditor will want to look at your entire history of sales to make sure you are not failing to collect sales taxes when you should be and can be your worst nightmare if you’re in the habit of pocketing cash sales. They will also look at scenarios where you are collecting sales taxes but not properly remitting them to the state. Serious penalties and even criminal tax charges can apply if the CDTFA determines you have been deliberately underpaying sales taxes. The CDTFA will also compare the sales your report for sales tax purposes to the sales your report for income tax purposes and will resort to a markup audit if they do not believe your records reflect cash sales. A tax lawyer will be able to help you prepare a defense and file any necessary documents, such as a petition challenging an incorrect finding, in a timely manner so that you do not lose your right to appeal.
Bakersfield Criminal Tax Defense Lawyers
A high-risk tax audit, known as an “egg shell audit” – has the potential to result in Federal and or California criminal tax charges. Formal charges may be filed by state or federal prosecutors using either an indictment or an information, depending on the circumstances. The taxpayer may be under IRS criminal investigation for weeks, months, or even longer before any charges are filed. The moment you become aware, or merely suspect, a criminal tax audit or investigation into yourself or your business is the moment you should contact a Bakersfield tax defense lawyer for guidance on which steps to take – and avoid taking – as the government develops its civil or criminal tax case against you.
Keep in mind that most tax crimes are federal felonies, which tend to carry some of the harshest possible penalties in the U.S. judicial system. Tax fraud punishments can include criminal tax fines, IRS restitution, imprisonment, supervised release after the offender leaves prison, and, in cases involving CPAs, other taxpayer advocates, or anyone under California’s Business and Professions code, (Doctor’s Lawyers, Dentists, Architects, Actuaries, Engineers ect.) potential career-ending professional disciplinary actions. To provide an example, the tax evasion penalty can include a fine of up to $100,000 (or up to $500,000 for corporations), up to five years in prison, and payment for the cost of prosecution.
A tax evasion attorney in Bakersfield may be able to, at worst, mitigate or, at best, outright avoid the civil and or criminal tax penalties you are facing. However, each moment you delay makes it harder to fight the charges successfully. Contact an IRS tax attorney right away if you suspect you are being audited or investigated in a scenario where you could potentially be charged with tax evasion (attempt to evade or defeat tax), payroll tax fraud (willful failure to collect or pay over tax), willful failure to file a return (owing “back taxes”), making false statements, interfering with the administration of Internal Revenue laws, or other tax crimes in California.
How Do I Choose a dual licensed Tax Attorney & CPA in Bakersfield?
Tax issues often come in multiples. When a client initially seeks out a Tax Lawyer to help them with one issue, they commonly may find that the single issue affects them in a variety of ways. They may also discover underlying issues of which they weren’t previously aware. When this happens, you will want to address all of the issues as soon as possible. However, not every Law or CPA firm can provide all the services that you need.
Tax Lawyers may specialize in one area, like tax preparation & planning or criminal tax defense. If you have concerns that your tax law firm does not cover, you may be forced to seek out an additional source of representation. This can cause higher fees, delays in the representation process, ego battles, territorialism and costly miscommunications between representation sources that can cause you even more harm.
Another mistake that many taxpayers make when seeking representation is not confining their search to services in their area. While the attorney’s location might not restrict them from providing you advice, it may mean that the attorney is not familiar with the specific state tax regulations that affect you individually. It may also be difficult for a Tax Attorney who is farther away to attend proceedings like office audits and hearings in person by your side. David Klasing is an instrument rated private pilot and owns a very fast yet economical airplane. He can be in Bakersfield in a little over an hour once airborne and does not charge for travel time.
For all the above reasons, Bakersfield taxpayers would be best served by reaching out to the Tax Law Offices of David W. Klasing for all their tax matters. Our dual-licensed Tax Attorneys and CPAs have experience in a wide range of multidisciplinary tax matters, meaning that you won’t have to look further than us for every facet of your tax needs. We also provide services to our clients throughout the State of California, including Bakersfield, and can provide you with California specific tax advice and representation.
Bakersfield Tax Attorneys for Businesses and Individuals
Armed with more than 20 years of combined experience providing thousands of taxpayers with sophisticated tax services ranging from bookkeeping and accounting to tax planning for foreign companies to Bitcoin tax issues to divorce tax issues, the award-winning team of Tax Attorneys and CPAs at the Tax Law Office of David W. Klasing is committed to delivering unparalleled client service with an emphasis on upholding your rights, protecting your wealth, and minimizing your losses. For a confidential, reduced-rate initial consultation with our knowledgeable team of tax professionals, call us at (661) 432-1480 or (800) 681-1295 or make an appointment online to visit our Bakersfield office at the address below:
4900 California Avenue
Tower B, 2nd Floor
Bakersfield, CA 93309l
Helpful Tax Law Q and A Library: https://klasing-associates.com/law-library/
Why Hire a Dual Certified Bakersfield Tax Attorney and CPA?
<a href="https://klasing-associates.com/tax-attorney/bakersfield-tax-attorney/"><img src="https://klasing-associates.com/wp-content/uploads/2020/07/Why-Hire-a-Dually-Certified-Tax-Attorney-and-CPA-Infographic.png" width="600px" /></a>