We also represent taxpayers in tax court, where tax litigation may be necessary to resolve issues that were not successfully addressed on appeal. We can help businesses and taxpayers file tax deficiency actions, tax refund actions, and other types of lawsuits against state or federal tax authorities.

What if I Disagree with the Results of an IRS, FTB, CDTFA, or EDD Tax Audit?

The bad news is that an FTB, EDD, CDTFA, or IRS tax audit is likely to result in an unwanted outcome for the taxpayer – typically interest, tax assessments, and/or civil penalties. The good news is that taxpayers have the right to dispute such outcomes, though strict criteria must be met in order for the taxpayer to prevail. Due to the stringent requirements and complex tax laws surrounding an appeal, it is always in a taxpayer’s best interests to consult with a tax attorney before proceeding.

If the issue to be appealed involves a federal tax issue, the taxpayer should contact the IRS Office of Appeals by filing what’s known as a “written protest” or “protest letter” or a Tax Court Petition depending on your case’s individual facts and circumstances. The protest letter or Tax Court Petition serves two main purposes:

• Summarizing the issues at hand – Law and or Facts in dispute
• Notifying the IRS of your wish to appeal / litigate the audit’s outcome

It’s important to understand that your protest / litigation will not be successful unless your objection is thoroughly supported by facts, legal statutes, or case law. In other words, the IRS will reject objections that are based on constitutional arguments, religious beliefs, or other personal beliefs. Additionally, your protest letter must meet strict deadlines: it may be filed no later than 30 days after the date indicated on the notice informing you of the right to appeal or within 90 days of the notice of deficiency.

If the issue to be appealed involves a California tax issue, the taxpayer should contact not the IRS, but the Office of Tax Appeals (OTA), which is a state agency. The OTA, which assumed many former duties of the Board of Equalization (BOE) following the Taxpayer Transparency and Fairness Act of 2017, handles appeals related to FTB and CDTFA decisions – for instance, a state income tax assessment proposed by the FTB. Similar to IRS procedures for appealing, OTA procedures require taxpayers to submit factual explanations supporting their positions, as well as copies of pertinent FTB/CDTFA notices and relevant financial documents (such as bank statements).

Resolving Your Tax Dispute in Court

The IRS Office of Appeals manages to resolve approximately 100,000 tax disputes every year. However, appealing your tax audit’s results is not a guarantee of resolving the controversy successfully. In some cases – particularly those involving suspected tax fraud, corporate tax issues, or substantial delinquencies – the taxpayer must change his or her legal strategy, shifting gears from dispute resolution to aggressive litigation in state or federal tax court. When taxpayers attempt to resolve their disputes through lawsuits against tax authorities, it is known as “tax litigation.” To initiate a case, the taxpayer must petition the appropriate tax court within 90 days of receiving Letter 531 (Notice of Deficiency), colloquially known as the “90-day letter.” If the taxpayer was located overseas when he or she received the notice, the deadline extends from 90 days to 150 days. Your tax litigation attorney can ensure that you file the appropriate legal documents in a timely fashion with the correct court and will work tirelessly to build a comprehensive case supported by thorough evidence.