Bakersfield, CA Tax Audit Lawyer
If you have received a notice informing you of an upcoming audit by the Internal Revenue Service (IRS), the California Franchise Tax Board (FTB), the California Department of Tax and Fee Administration (CDTFA) (formerly known as the Board of Equalization or BOE), or the California Employment Development Department (EDD), you are in jeopardy of, at best, having additional tax assessed, being ordered to pay civil penalties and interest, or, at worst, being investigated for tax crimes. Due to the high level of legal and financial jeopardy that is typically involved in an income tax audit, it is crucial to enter the process from a position of strength, being adequately prepared with a meticulous attention to detail.
The Bakersfield, California tax audit attorneys and CPAs at our nationally recognized, award-winning tax practice are led by founding attorney David W. Klasing, a former public auditor. We understand audit methodology from the inside out, including vulnerable points for taxpayers and how to address them effectively. When you are represented by a tax attorney or attorney-CPA from the Tax Law Office of David W. Klasing, you can approach the audit process with confidence and peace of mind knowing that your best interests will be zealously protected. We have handled thousands of state and federal tax audits arising from issues ranging from unfiled tax returns to undeclared foreign accounts to misclassified workers and are ready to put our extensive experience to work representing you or your business.
Why Am I Being Audited by the IRS, FTB, CDTFA, or EDD?
There are a number of reasons you or your business could have been chosen for a state or federal audit. Though some taxpayers are selected purely at random by computer algorithms or are chosen solely because they earn a high level of income, most audits are rooted in known or suspected problems that the auditor is instructed to probe and verify. These problems often relate to one or more of the following:
- Claiming exemptions, deductions, and/or credits you did not qualify for
- Concealing income or assets, including those located overseas (e.g. foreign bank accounts)
- Failing to attach certain schedules to your tax returns
- Failing to file tax returns
- Failing to turn withheld payroll taxes (FICA taxes) over to the appropriate agency
- Misclassifying workers to avoid payroll tax obligations
- Padding your business expenses
- Paying workers “under the table” (in cash) to avoid payroll tax obligations
- Understating your income
- Using outdated, inaccurate, or stolen identifying information
The purpose of the audit is to obtain information about the problem, to determine whether the taxpayer made the error intentionally (which constitutes fraud), and finally, to impose penalties and/or assess additional tax, penalties and interest as appropriate.
How to Prepare for a Tax Audit
The most important step you can take to prepare for your audit is to hire an accomplished, knowledgeable, and experienced tax attorney who is qualified to represent individual taxpayers and business entities in California and in federal tax audits. Your audit lawyer can help to compile and examine the documentation needed, coach you on what to expect at each meeting, and speak on your behalf when the auditor’s questioning becomes confusing, misleading, threatening, or otherwise violates tax laws or IRS rules. Your attorney can work to prevent you from incriminating yourself, explain and safeguard your legal rights, research cases and statutes that are pertinent to your case, and if necessary, appeal (dispute) the results of the audit by filing a written protest with the appropriate agency, such as the IRS Office of Appeals or California’s Office of Tax Appeals (OTA) or through Tax Litigation.
Eggshell Audits and Criminal Tax Defense Representation
There are several types of IRS audits, including:
- Correspondence Audits – You will send documents to the auditor as requested via mail.
- Field Audits – The auditor will request access to your home and/or place of business to scrutinize your records.
- Office Audits – The audit will be conducted at an IRS field office.
While all types of audits carry varying levels of risk, one of the most dangerous audits for the taxpayer is the “eggshell” audit. Though some correspondence audits can be quickly resolved with a short explanation or the submission of a missing document, eggshell audits are more extensive, as they are only performed in cases where the auditing agency suspects the taxpayer of filing a fraudulent tax return. The audit triggers listed above, such as underreporting income or padding business costs, are sometimes referred to as “badges of fraud” because they are intentional actions that the government associates with taxpayer actions to purposefully evade paying his or her true tax liability.
Because eggshell audits specifically probe suspected tax fraud, they have a high likelihood of resulting in civil fraud penalties, prosecution resulting from an audit-related criminal tax investigation, or, in the worst-case scenario, both. Our tax team includes experienced criminal tax defense attorneys and CPAs who have successfully defended high-stakes felony tax cases, enabling us to build a robust tactical defense no matter how seemingly “hopeless” the charges resulting from an eggshell audit appear or better yet, avoiding the case going criminal in the first place.
Bakersfield, CA Tax Audit Attorneys Representing Individuals and Businesses
You will be facing an experienced auditor who is professionally trained in tax law – and whose goal is to uncover the slightest evidence of noncompliance. In plain terms, the auditor does not have your best interests at heart. Thus, it is imperative to be well-prepared and to take the process seriously, even if you are confident that you are in total compliance with state and federal tax laws for all tax years in question.
If you or your business is facing a state or federal tax audit, arm yourself with a skilled audit lawyer & CPA with a long record of success in defending taxpayers. (See our Client Testimonials) Schedule your reduced-rate consultation by contacting the Tax Law Office of David W. Klasing online, or by calling (800) 681-1295 or (661) 432-1480.
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.