One of The Best Tax Attorneys in Oakland

With a bustling population of over 400,000 residents, Oakland is one of the largest and busiest centers of trade in the San Francisco region. It’s also one of the largest ports in the country, with tens of billions of dollars in cargo passing through the port each year. But while the city of Oakland may be an economic powerhouse, even its most affluent residents can face intense financial pressures due to the unintended consequences of state or federal tax regulations and civil / criminal tax enforcement.

Supported by over 20 years of combined experience, the Oakland tax attorneys and CPAs at the Tax Law Office of David W. Klasing are dedicated to helping local residents and business owners resolve their tax issues efficiently. With tax offices conveniently located in downtown Oakland near Lincoln University and the historic Fox Theater, we provide state, federal, international, civil and criminal tax defense, personal, and corporate tax services to individuals and business entities throughout the Oakland region.

IRS Audit Representation in Oakland, CA

One of the most important services the Tax Law Offices of David W. Klasing provides to our clients is audit representation. Audits are invasive and time-consuming processes that are happening at a higher rate than ever before. Even an honest mistake on a tax return can result in penalties and interest if that mistake is a material misrepresentation.

If you are facing an audit, the first step our dual-licensed Tax Lawyers and CPAs will take is to identify the type of audit the government is conducting. There are several types of audits, each with different ramifications: correspondence audits, office audits, field audits, eggshell audits, and reverse eggshell audits.

The first three types of audits differ in how they are conducted. The final two categories are unofficial names for audits where information is known by one party but not the other. Eggshell and reverse eggshell audits are particularly risky and would greatly benefit from legal counsel and financial advice. Our Dual-Licensed Tax Lawyers and CPAs offer experience and knowledge that can help guide you or your business through whatever challenges such audits present.

Correspondence Audits

The least invasive form of government audit, correspondence audits (also referred to as “mail audits”) take place entirely through traditional mail, e-mail, fax, and phone conversations. Assuming you cooperate with the government’s requests for more information, you likely will never have to directly confront IRS agents in person, and your case may be resolved in roughly three to six months.

Office Audits

If the government institutes an office audit, you will have to appear at a local IRS field office with all requested documentation that supports the financials in question. The location, as well as the date of the audit, will be indicated on the notice the IRS sends to inform you of the audit. You can have your dual licensed Tax Lawyer & CPA present at the office audit to assist you in your cooperation and to ensure that you are being dealt with fairly. Compliance with an office audit’s requests usually leads to resolution within three to six months of the taxpayer’s visit date.

Field Audits

Field audits are the most invasive and serious form of tax inquiry that the government can make. The government may attempt to conduct their investigation at your personal residence, place of business, or both, depending on the nature of the information sought. Field audits are typically only used where criminal behavior may be suspected or the nature of the financial situation makes the audit substantially more complicated. Field audits may take more than a year to resolve.

Field audits offer unique challenges to a business that correspondence and office audits do not. During a field audit, the IRS agent will review financial records, interview employees, and tour the office or company facilities. While it is expected that an IRS audit will require reviewing financial records, the other sources of information are more of a surprise and require additional preparation.

When a taxpayer responds to questions or documentation requests, it is important to be responsive while providing only necessary information. If such requests are in writing or given in advance, it is easier to work with your Dual Licensed Tax Lawyer & CPA to prepare adequate responses and identify risk areas. Oral employee interviews make controlling the amount of information given more difficult.

Auditors are trained to ask open-ended questions that can draw out long explanations. These responses may then generate additional questions and information the auditor did not know to ask about specifically. An attorney can direct each expected interviewee to only answer the exact question asked. This can help avoid excessive disclosure. Many employees are helpful by nature, which can drive them to overexplain. Our Dual Licensed Tax Lawyers& CPAs can work with expected interviewees to prepare them for expected lines of questioning and provide feedback on their responses. Such preparation and legal counsel can help stem the flood of information that an unprepared employee might tell the IRS while allowing them to be responsive.

In addition to helping a business effectively prepare for a field audit, an attorney should be present during the audit and at every interview. The presence of our Dual Licensed Tax Lawyers & CPAs provides the opportunity to evaluate any possible ulterior motives of the auditor. The IRS may collect evidence for a potential criminal tax liability investigation without informing the taxpayer. In this instance, the attorney can suggest actions to protect the taxpayer’s constitutional rights.

Eggshell Audits

Eggshell audits are named because the taxpayer and their advisors are metaphorically walking on eggshells during the audit. This kind of audit occurs when the taxpayer knows potentially damaging information that the auditor does not. Typically, this kind of damaging information is a material, potentially fraudulent, misrepresentation of data on a tax return. A material misrepresentation could be the intentional or inadvertent understatement of income, the overstatement of deductions, the use of an incorrect or inappropriate credit, or some other error or omission that significantly understates tax liability for the year at issue. It may be tempting to try to prevent the IRS from discovering these errors; however, intentional nondisclosure or lying to an IRS agent can generate significant civil penalties and potential criminal tax charges.

The best strategy to prevent an eggshell audit from happening is to prevent tax noncompliance. Businesses should be diligent when preparing tax returns and maintaining financial records. Our Dual Licensed Tax Lawyers & CPAs can provide advice for any questions that arise or unsustainable tax law positions that at present are undetected. Seeking advice before a tax return is filed can save time, expense, and loss of peace of mind that commonly occur in a subsequent eggshell audit.

If you have discovered that your business is facing an eggshell audit, you should seek legal counsel quickly to mitigate the civil and criminal risks such an audit creates. Regardless of whether the error or omission in your tax returns was intentional or accidental, there are options to correct the issue instead of chancing the IRS uncovering it. Our Dual Licensed Tax Lawyers & CPAs can interact with the auditors on your behalf and guide your business through the voluntary disclosure process.

Reverse Eggshell Audits

A reverse eggshell audit is the flip side of an eggshell audit. In this case, the auditor has information the taxpayer does not know they possess. Usually, the criminal investigation division will know or suspect tax fraud and use what appears to be a civil audit to collect information that will be passed on to a criminal tax investigator. A civil and criminal tax investigation can also occur concurrently, with the civil investigation cloaking the criminal one.

These types of audits expose a taxpayer to criminal tax liability without notification and affectively limit their ability to utilize the constitutional protections against unreasonable searches and seizures and against self-incrimination to defend themselves. Typically, if a taxpayer is made aware they are under criminal tax investigation, they will hire a criminal tax defense attorney who will advise invoking the constitutional right to remain silent to avoid self-incrimination and strive to prevent unreasonable searches and seizures. However, if a taxpayer is unaware that a criminal tax investigation is occurring, they will ordinarily be much less guarded with their words. Here, the auditor may be feeding evidence to an undisclosed criminal tax investigator under the guise of a legitimate civil audit.

While this practice may not seem fair, it is legal and increasingly common. Reverse eggshell audits are best addressed when identified quickly so you can mitigate any risk. Fortunately, there are some things an auditor may do or questions that may be asked that serve as a bellwether of a reverse eggshell audit. Our Dual Licensed Tax Lawyers & CPAs are very familiar with the circumstances of routine audits and can recognize when something is out of the ordinary. At that point, we can question the auditor to discern whether they are looking for evidence of criminal tax fraud. The moment a criminal tax investigation is suspected, we can provide advice for your defense and take steps to protect your rights. Hiring an experienced attorney to assist with your audit can be hugely beneficial in identifying where hidden risk is present.

Advantages and Disadvantages of Hiring a Tax Attorney vs. a CPA

Tax issues can be extremely complicated and can involve multiple different facets. Sometimes, it might not be clear whether your interests would be best served by hiring a Certified Public Accountant (CPA) or a Tax Attorney. While each has a unique skillset, they also overlap in many areas related to the filing of tax returns and issues related to IRS audits. In order to give yourself the broadest range of knowledge, education, and experience, your best bet when looking for tax advice is to retain a skilled dual licensed Tax Attorney and CPA like those at the Tax Law Offices of David W. Klasing.

Advantages of Hiring a CPA

CPAs are considered the best of the best in the field of accounting due to the broad knowledge they acquire from their education, including training in auditing, tax laws, bookkeeping, and business law, planning and strategy. They go through an extensive licensure process, where they must complete the necessary education and pass a difficult exam, among other requirements. Aside from basic accounting functions related to your taxes, they can help you keep the type of clean and complete records required to minimize the damages caused by an IRS audit, and can help you fill out and file your tax returns and related forms accurately and completely. CPAs are also skilled at keep or interpreting your financial records to identify problem areas that need improvement and save you potential headaches down the line.

Advantages of Hiring a Tax Attorney

Tax Attorneys are, first and foremost, Attorneys, meaning they have graduated from law school, passed the bar exam, and fulfilled the multitude of other requirements for licensure as an Attorney, such as taking continuing education courses each year. Unlike a CPA whose focus and skill will be in the area of preparing and filing tax forms and compiling and keeping records, a Tax Attorney’s focus will typically be on dispute resolution and keeping or bringing you back into compliance with the law. They will be superior and indispensable at providing representation during adversarial proceedings, such as an audit or especially during a criminal tax investigation because they are intimately familiar with Tax Law and your rights and obligations under it as well as the use and implementation of the best defenses to willful and non-willful tax violations.

Perhaps the most crucial advantage of hiring a Tax Attorney as opposed to a non-attorney CPA is the attorney-client privilege. This privilege applies to all conversations between you and your Attorney during your legal representation, as well as to employees in the office of the attorney like a paralegal or an accountant / CPA. If a Kovel letter is issued, the attorney-client privilege will apply to any accountants brought in to consult on your case provided they did not prepare or provide tax advice on the tax returns at issue and they are assisting your attorney to provide a legal service. This privilege is broad and will typically prevent an Attorney or someone working under their control from revealing privileged communications with the authorities without your permission or being forced to testifying against you like the CPA that prepared the returns at issue often is.

Accountant-client privilege is nowhere near as broad or sacrosanct. For this reason, you often hear stories of CPAs who realize they could face criminal tax charges for aiding in preparing a fraudulent tax return, flipping on their clients and turning state’s witness against them. They have their own reputation to preserve. With an Attorney, this is almost certainly not going to happen if they did not prepare or provide tax advice on the returns at issue. Anytime potential criminal tax liability might even remotely be an issue, speaking with a Tax Attorney under the attorney-client privilege is always the way to go.

How Do I Choose a Tax Attorney or CPA in Oakland, CA?

When you are searching for legal representation to help you handle your tax issues in Oakland, you will want your choice to be able to handle not just the issues of immediate concern, but what they could ultimately become, or any issues you may be facing that you are not even aware of yet. Tax law is a broad field, and not every lawyer or CPA can simultaneously handle every issue that may arise, such as tax preparation, strategizing to legally reducing ongoing taxation or providing civil audit to criminal tax investigation and prosecution defense.

By selecting to partner with a dual licensed Tax Attorney and CPA who can handle all the situations you might face, you create a one-stop shop that can streamline your case. This way, you won’t have to find (and pay) different representation to help you if your case expands past what your initial choice can handle. Not every firm is cut out to handle your entire case, and ego battles, territorialism and errors in communication between representation services can cause issues that you would not have encountered otherwise.

You will also want a source of tax law counsel that is local to you. This is helpful not just for understanding the state and municipal tax issues that apply to you specifically, but also for the purposes of physical representation at proceedings like office and field audits, hearings, and filing reviews.

The dual-licensed Oakland Tax Attorneys and CPAs at the Tax Law Offices of David W. Klasing are your answer to these concerns. Our firm takes an interdisciplinary approach to our clients’ tax needs, providing them with thorough and resourceful representation regardless of the issues they find themselves facing. We provide our services to clients throughout the State of California, including those in the City of Oakland.

Our Skilled Dual Licensed Oakland Tax Attorneys and CPAs Offer the Best of Both Worlds

There are numerous advantages to hiring a dual-licensed Tax Attorney and CPA to consult regarding tax planning and any potential tax issues that have or could arise. However, it can be time-consuming and prohibitively expensive to engage two different firms for advice regarding the same subject. For this reason, our experienced Dual Licensed San Jose Tax Attorneys and CPAs at the Tax Law Offices of David. W. Klasing offer you the best of both worlds for a reasonable price. Our committed tax professionals have simultaneously licensed Tax Attorneys and Certified Public Accountants and bring with them the wealth of education, experience and judgment that comes with it. We can both help you organize or reconstruct your records and file your domestic or international tax returns and offer skilled tax controversy representation if you are dealing with a federal of state audit or criminal tax investigation.