Los Angeles Tax Attorney + Accountant for California or Federal Tax Audits of Aerospace Companies
Southern California boasts a robust aerospace industry, as it has since the early-mid twentieth century. According to the Los Angeles County Economic Development Corporation, L.A. County alone contains “over 50,000 people who are employed in the aerospace and defense industry cluster – making L.A. County a leader in the nation for aerospace and defense employment.”
Home to standard-setting industry giants like Northrop Grumman, Boeing, and Lockheed, Los Angeles is an exciting launch-point for engineers, researchers, entrepreneurs, and investors within the aerospace field. However, California’s complex regulations can make successful tax compliance a challenge for individuals or business owners, with errors frequently leading to income, sales, or employment tax audits. Atop state tax laws, the Internal Revenue Code (IRC) adds another layer of regulation, creating more opportunities – but also more hazards – for aerospace companies in California. If your business has been chosen for a tax audit, get zealous support and aggressive defense by contacting the Tax Law Office of David W. Klasing, where we are award-winning Los Angeles tax lawyers and accountants with over 20 years of combined experience.
What Types of Issues Are Commonly Encountered in Aerospace Industry Tax Audits?
The IRS has published a series of industry-specific audit technique guides. Though aimed at auditors rather than taxpayers facing audit, the guides still illuminate the sorts of issues or regulations auditors tend to focus on when examining aerospace entities. For instance, the IRS Aerospace Industry Research Credit Audit Technique Guide – which, though last revised in 2005, remains current as of late 2019 – places a heavy emphasis on 26 U.S. Code § 41 (pertaining to credit for increasing research activities) and 26 U.S. Code § 174 (pertaining to research and experimental expenditures).
Of course, it is not always industry-specific issues which precipitate an IRS audit. Commonplace tax compliance issues, such as unfiled returns or underreported business income, can also lead to an examination – or to an IRS criminal tax investigation, if there are indicators of tax fraud called badges of fraud in the client’s fact pattern.
Be forewarned that auditors may probe into virtually any aspect of your business’ daily operations and financial activities, from your contracting and development activities to your bank and credit card statements. If you bank or do business with international entities, such as foreign banks or investors, expect the IRS to scrutinize your records in search of undisclosed offshore accounts & unreported offshore taxable income. Our guide to surviving an audit will help you prepare more effectively, but there is no substitute for the benefits of professional representation by an IRS tax attorney.
State + Federal Tax Audit Defense Lawyers for Aerospace Companies
The Tax Law Office of David W. Klasing provides a wide array of audit defense services, ensuring that you receive dedicated legal representation anchored by more than 20 years of audit representation experience, including over a decade of public accounting auditing experience. Whether you are located in the L.A. area, in another region of California, or even a different state or country, we can assist you with the following types of audits:
- Civil tax audits
- Criminal tax audits
- Employment and payroll tax audits
- Income tax audits
- Federal tax audits
- Foreign account tax audits (such as FBAR audits)
- Sales tax audits
- State tax audits
- Worker classification audits
We represent individuals and businesses from all corners of the aerospace industry, including the manufacturers of radar and satellite systems, aircraft frames and engines, and avionics instruments.
IRS vs. California Tax Audits (CDTFA, FTB, EDD)
The IRS conducts federal income, sales, and employment tax audits – sometimes due to random selection, but more frequently, because an error, omission, or discrepancy has been detected on a taxpayer’s tax or information returns. The IRS works closely with the U.S. Department of Justice (DOJ), whose Tax Division prosecutes federal tax crimes when evidence of willful tax evasion exists. After the discovery of fraud at an aerospace company, such as the Omni aerospace fraud, felony or misdemeanor charges may be filed, depending on the nature of the alleged offense.
When a tax violation involves a state tax, such as California sales tax, the audit will be performed by the appropriate state agency rather than the IRS. There are three agencies that conduct audits in California, any of which our office can assist you with:
- The Franchise Tax Board (FTB), which is responsible for California income tax audits
- The California Department of Tax and Fee Administration (CDTFA), which is responsible for California sales tax audits
- The Employment Development Department (EDD), which is responsible for California employment tax audits
Los Angeles Audit Appeals Attorneys Representing Aerospace Engineers
You should understand your appeal rights, which are explained extensively in IRS Publication 5, if you disagree with the outcome of a federal or state tax audit. If you believe that U.S. or California taxes were assessed in error, or that penalties and/or interest were improperly imposed, you may protest the decision by filing an appeal, provided you satisfy state or federal criteria.
The procedures for appealing the results of a tax audit vary from agency to agency. For instance, there are different rules for how to appeal a CDTFA audit versus how to appeal an FTB audit. Our IRS audit appeals attorneys can prepare and file your letter of protest, and if necessary, are ready to stand behind you in tax litigation against the IRS, CDTFA, or FTB.
L.A. Tax Lawyer + Accountant for Aerospace Firms
A tax audit endangers you, your firm, and your career, putting you at risk for costly civil penalties or even a criminal tax investigation. If your business has been chosen for an aerospace industry tax audit in California, get cutting-edge, dedicated defense from the Los Angeles tax attorneys at the Tax Law Office of David W. Klasing. Contact us online right away to schedule a reduced rate appointment or call our L.A. tax office at (310) 492-5583 for 24/7 assistance.
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.