Oakland, CA Audit Appeals and Litigation Attorney
Audit appeals and tax litigation give Oakland’s taxpayers vital opportunities to protect their wealth when auditors make mistakes, deviate from standards, or violate tax laws. However, while the benefits of an audit appeal or tax action can be immense, so are the difficulties posed by the highly complex and technical nature of both procedures. If you intend to dispute the results of a tax audit or file an action in U.S. Tax Court, make sure that you have guidance from a skilled and experienced tax attorney with a track record of success in these challenging cases.
Oakland Appeals and Tax Litigation Lawyers for IRS, FTB, EDD, and CDTFA Audits
Tax audits can be conducted by state or federal tax agencies. These agencies include the Internal Revenue Service (IRS) and, in California, the Employment Development Department (EDD), the Franchise Tax Board (FTB), and the California Department of Tax and Fee Administration (CDTFA). California taxpayers should note that the CDTFA, which was recently created with the Taxpayer Transparency and Fairness Act of 2017, now performs many of the tax functions previously administered by the Board of Equalization (BOE).
Regardless of which agency performed your audit, you have the right to appeal audit results with which you disagree. However, appeal is not necessarily the final stage of this process. If you disagree with the outcome of your appeal, you may continue to challenge the issue by filing a petition in U.S. Tax Court, initiating tax litigation.
Our Oakland tax attorneys provide assistance with both procedures, and are ready to guide individuals and business entities through all stages of the tax controversy resolution process. We handle audit appeals and tax litigation arising from:
- Business and corporate tax audits
- Car dealership tax audits
- CDTFA tax audits
- Dentist tax audits
- EDD tax audits
- Eggshell audits and reverse eggshell audits
- FBAR audits (Foreign Bank Account Report) and foreign account tax audits
- FTB tax audits
- Income tax audits
- IRS tax audits (correspondence, office, field)
- Payroll (FICA) and employment tax audits
- Real estate tax audits
- Sales and use tax audits
- Veterinary tax audits
- Worker classification audits
Appealing the Results of a California or IRS Tax Audit
There are two key bodies that handle tax appeals at the California and federal levels. The California Office of Tax Appeals (OTA), which was established in 2017, conducts appeals hearings related to many types of state taxes administered by the FTB and CDTFA, including:
- California corporate franchise taxes
- California corporate income taxes
- California fuel excise taxes
- California personal income taxes
- California sales and use taxes
The OTA does not handle appeals related to:
- Employment development taxes
- Excise taxes on alcohol
- Insurance taxes
- Property taxes
If the matter you wish to appeal involves federal taxes – for example, a proposed tax assessment stemming from an audit of your Form 1040 – the initial dispute resolution process will be managed by the IRS through the Office of Appeals (known simply as “Appeals”).
Whether your matter involves state or federal taxes, you must adhere to strict criteria when requesting a tax appeal. To request a tax appeal with the IRS, you must submit a written document known as a “protest letter” or “letter of protest,” which must contain the following:
- Your contact information
- A statement explaining your intent to appeal
- A copy of the IRS notice that you received
- The tax year(s) involved in your matter
- The items you disagree with
- Your reasoning for disagreeing with such items, supported by facts, laws, and other evidence
To request an appeals hearing before the OTA, you must follow similar rules, though the submission materials are referred to as “opening briefs” rather than “protest letters.” Like a letter of protest, an opening brief must include:
- Your contact information
- Your request for a tax appeal, including the facts and laws that support your position
- A copy of the FTB or CDTFA notice you received
Your protest letter must be submitted to the IRS within 30 days of the date indicated on your “30-day letter” (Letter 525). Likewise, your opening brief must generally be submitted by one of the following dates:
- 30 days from the date the Notice of Action was mailed by the FTB
- The date printed on your Notice of Action
- Within 30 days of the date you received your CDTFA decision
Tax Litigation: Suing the IRS in U.S. Tax Court
The appeals process is often, but not always, sufficient for resolving tax controversies. Particularly complex tax issues, such as corporate tax issues, substantial tax debts, and allegations of tax fraud (such as tax evasion), are especially likely to require alternate means of resolution. Though Tax Court is not always the appropriate venue for settling a dispute, litigation may prove necessary in these types of cases. Many successful tax actions will fall into one of two categories:
- Deficiency Actions – You may wish to file a deficiency suit if (1) you have received a deficiency notice from the IRS (2) with which you disagree, and (3) you are able to provide a detailed list of the auditor’s errors. The deficiency notice, or CP3219N Notice (Notice of Deficiency, Increase in Tax and Notice of Your Right to Challenge), is also referred to as the “90-day letter.”
- Refund Actions – You may wish to file a refund action if (1) you have paid a tax debt in full, but (2) believe that you are entitled to a refund, and (3) have already attempted to settle the issue using administrative remedies (e.g. filing Form 1120X (Amended U.S. Corporation Income Tax Return)).
Unsurprisingly, both types of tax actions are subject to strict deadlines. Deficiency suits must generally be filed within 90 days of receiving your IRS deficiency notice, though there is an exception for taxpayers overseas, who have up to 150 days. Likewise, there is a six-month waiting period to file a refund action after (1) receiving a notice of claim disallowance, or (2) submitting the original refund claim.
Oakland Tax Law Offices Serving Northern California
At the Tax Law Offices of David W. Klasing, we are California tax attorneys and CPAs with decades of combined tax experience. Additionally, Mr. Klasing spent more than 10 years as a public auditor, giving our tax firm a unique perspective on the rules and standards auditors must follow.
Whether a taxpayer requires assistance preparing a written protest letter, has questions about the acceptable grounds for a tax appeal, or needs help navigating the deadlines and procedures for bringing an action in Federal or California Tax Court, our dedicated, award-winning team is ready to provide zealous, on-point, strategic support. To discuss your tax controversy confidentially in a reduced-rate consultation with one of our experienced tax professionals, contact our law offices online, call us at (510) 764-1020 or (800) 681-1295.