Irvine Tax Attorney and CPA
Irvine, California in Orange County is one of the most diverse areas in the world from an economic standpoint. Orange County is home to entertainment corporations, health care and research businesses, educational systems, high tech, software and many other interesting industries.
As an Irvine resident, you may be involved in a variety of businesses, drawing income from traditional and non-traditional sources. This can result in confusing tax situations that may require the services of a tax attorney Orange County team.
Occasionally, you may run into a tax situation where you receive notification of an audit. Both businesses and individual taxpayers could be subject to an audit from federal or state tax authorities.
The Best Tax Attorney in Irvine
The audit process can be overwhelming. Not only do you have to worry about huge potential additional taxes, interest and financial penalties, but you could face criminal tax prosecution in certain cases. You need to vigorously defend yourself during a tax audit, something a Tax Attorney can perform on your behalf.
If you are facing a tax audit, require tax planning, or need any similar type of service, contact the Tax Law Offices of David W. Klasing today for help. Rely on our experience as a tax attorney in Orange County and Irvine to help you work through any tax situation.
Complying with California and federal tax codes is often a challenging endeavor for Irvine and Orange County residents. This is especially true for business owners, property owners, high net worth individuals, independent contractors, dual citizens, individuals who are going through the process of divorce, and a host of other taxpayers who have unique tax concerns.
Without careful and strategic management, even a seemingly straightforward tax matter, such as an amended return or scheduled correspondence audit with the IRS, can have a myriad of unexpected financial and legal consequences. Therefore, it is crucial to work with an experienced Tax Attorney in Irvine, like the Orange County Tax Lawyers and CPAs at the Tax Law Office of David W. Klasing. Proudly serving businesses and individual taxpayers throughout Orange County, our award-winning team is dedicated to providing diligent, cutting-edge, client-focused service across a broad array of civil, criminal, state, federal, domestic and international tax matters.
Table of Contents
- Tax Audit Situations in Orange County
- Audit Appeals and Tax Litigation
- IRS Audit Representation
- California Franchise Tax Board (FTB) Audit Representation
- California Employment Development Department (EDD) Audit Representation
- ICalifornia Department of Tax and Fee Administration (CDTFA) Audit Representation
- California and Federal Employment Taxes
- International Tax Attorneys in Irvine
- Irvine Criminal Tax Defense Lawyers
- Finding Tax Help in Orange County and Irvine
IRS, CDTFA, EDD, and FTB Tax Audit Lawyers in Irvine & Orange County CA
At least four different agencies conduct tax audits of California businesses and residents. These agencies are the Internal Revenue Service (IRS), which audits federal returns and other tax forms, and a collection of California tax authorities: The Franchise Tax Board (FTB), the Employment Development Department (EDD), and the California Department of Tax and Fee Administration (CDTFA). These agencies now administer the tax laws once enforced by the California Board of Equalization (BOE).
Any of these agencies can schedule a tax audit at any time – sometimes due to random selection, but more often, triggered by discrepancies or anomalies in the taxpayer’s records, such as failing to file returns, making luxury purchases that far exceed reported income, or padding business expenses in order to claim deductions improperly. Likewise, businesses are more likely to be audited if they primarily conduct their transactions in cash.
In addition to having years of experience as a dually licensed Tax Lawyer and CPA in Irvine, our founder and principal attorney, David W. Klasing, possesses over 15 years of experience as former public auditor, enabling our tax team to navigate the audit process with precision and skill. Types of federal and California tax audits in which we provide representation include:
Irvine Audit Appeals and Tax Litigation
Administrative or procedural errors can lead to incorrect outcomes when tax audits conclude. Unfortunately, this can leave a taxpayer facing a costly tax bill, including penalties and interest, for which he or she should not technically be liable where the governmental agency got either the facts or the law wrong. Thankfully, at both the state and federal levels, taxpayers have the right to dispute, or “appeal,” the results of tax audits. This applies to IRS audits, FTB audits, and all other types of tax audits in California. At the federal level, audit appeals are handled by the IRS’ Office of Appeals, for which the California equivalent is the Office of Tax Appeals (OTA).
To begin the appeals process, the taxpayer must first notify the appropriate agency of the controversy which he or she intends to dispute. This is accomplished through a written collection of documents, called a “protest letter” or, if directed to the OTA, “opening brief,” containing information such as:
- The taxpayer’s contact information
- The issue the taxpayer wishes to dispute, such as the proposed assessment of additional tax
- The legal and/or factual basis for disputing the audit’s results, such as tax-related statutes or legal precedents
Note that in some cases, it may be possible to avoid appeals by resolving the issue at mediation, which is faster and less formal. Conversely, there are also cases in which the dispute must proceed beyond appeals, going to Federal or California Tax Court for litigation before a judge. Our audit appeals attorneys and tax litigation attorneys are highly experienced in resolving complex tax controversies, and will either aggressively pursue the strategy optimally suited to your case or inform you at the outset that the law and facts are not on your side and recommend other collection type alternatives rather than tax appeals or litigation.
IRS Audit Representation
The IRS conducts audits related to federal income as to both personal and “ordinarily” all related business tax returns. Reasons for an audit can vary, and sometimes they are conducted randomly. Often, the IRS will suspect you of underreporting income or claiming false exemptions. They are permitted to look back at 3 years of your records, and in severe cases can look back even further.
There are three different ways that the IRS might choose to conduct an audit. The first is known as a correspondence audit. You will receive a letter in the mail asking to supply certain documents and records to back up the information reported on your tax returns. You will communicate with the auditor and supply the requested records through the mail, over the phone, or electronically. A tax lawyer can help you prepare the documents and deal with any discrepancies the IRS may find.
An office audit occurs in one of the IRS offices, where you will meet with the auditor in person. You should retain a lawyer to help you prepare for this meeting and to accompany you to the IRS office or better yet, take your place entirely (where possible). A field audit is the most serious type of audit. This is when the auditor will attempt to come to your home or office to look through all of your records. If you get a letter indicating that a field audit will be occurring, you should contact an experienced tax lawyer immediately, as these audits often lead to severe civil or criminal penalties if discrepancies are found. Counsel can quite often meet with the auditor instead of the taxpayer. Its never good to have an auditor in your home wondering how you are able to afford your demonstrated lifestyle where your history of tax filing will not support it.
California Franchise Tax Board (FTB) Audit Representation
The California Franchise Tax Board (FTB) conducts audits related to issues with California personal and business income tax return filings. The FTB conducts audits independent of the IRS when there is a suspicion that you are in violation of California-specific tax requirements. The IRS and the FTB have different rules in certain areas and it is important that both sets of guidelines are followed. An experienced tax attorney can help you prepare your records and deal with any underreporting that occurred. If you are found to owe money, the lawyer can work out a payment plan with the FTB.
California Employment Development Department (EDD) Audit Representation
Payroll taxes are under the purview of the California Employment Development Department (EDD). If you receive notice that you are being audited by the EDD, they are likely looking into whether you properly collected and remitted state payroll taxes and have properly classified your employees as opposed to improperly using independent contractors. Employers are required to withhold both state and federal payroll taxes out of their employees’ checks. If they fail to collect these or collect them and fail to remit them to the proper agency, you may be required to pay back taxes and further fines or penalties.
The biggest issue that results in audits by the EDD is the improper classification of employees as independent contractors especially after California passed AB5. While employers are required to collect payroll taxes from employees’ checks, they are not required to do the same for independent contractors. The rules about who does and does not qualify as an independent contractor are very complex. A tax lawyer can help you understand whether you classified properly and, if you did not, can work with the EDD to sort out the issue without leading to civil or criminal penalties being imposed.
California Department of Tax and Fee Administration (CDTFA) Audit Representation
The California Department of Tax and Fee Administration (CDTFA) conducts audits related to issues with the collecting and remitting of state sales taxes by businesses. What sales tax a business is required to charge can vary depending on what county or municipality in which they are located as well as the type of product they sell. An audit can be random, especially if you own a business such as a bar or restaurant where sales taxes are often underreported. It can also be based on a suspicion that you underreporting sales, are not charging proper sales tax or are charging sales tax and not remitting the money to the state.
These types of audits can be very invasive, as the CDTFA will want to look over your entire history of sales and purchases. A skilled tax law attorney can help you gather the records and documents that the CDTFA will require and can ensure that any protest to challenge the conclusions of an audit are filed within the proper 30-day window. A lawyer can also work to mitigate the consequences or negotiate a repayment deal if violations have clearly occurred.
California and Federal Employment Tax Attorneys in Orange County
Business owners, aspiring business owners, independent contractors, and self-employed individuals have unique tax responsibilities with regard to issues such as business entity selection, FICA (payroll) tax compliance, business succession planning, and compliance with California and federal self-employment (SE) tax requirements.
Whether the taxpayer is primarily concerned with starting a new business, passing a family-owned business down to his or her children, ensuring proper classification of workers, planning and complying with international tax and information reporting requirements or conforming to new rules for the collection and remission of sales tax, our Irvine business tax lawyers are prepared to provide the level of guidance that has come to distinguish our firm. Our payroll and employment tax attorneys work with all types of entities throughout Orange County, including:
- C corporations
- Family-run businesses
- Foreign companies with branches in California
- General partnerships
- Limited liability companies (LLCs)
- Limited partnerships (LPs)
- S corporations
- Sole proprietorships
International Tax Attorneys in Irvine, CA
The United States is one of the only countries in the world to impose taxes based on citizenship instead of residency. Under this system of “citizenship-based” taxation, many taxpayers are subject to tax laws of which they are unaware. Examples of taxpayers who may be impacted by international tax law issues include:
- Recent immigrants or frequent business travelers who have income generating assets and bank accounts in other countries
- Taxpayers who have dual citizenship with the United States
- Taxpayers who have recently sent money to the U.S. via wire transfer
- U.S. expats who live and/or work abroad
Taxpayers who belong in these categories are, for example, generally subject to the Bank Secrecy Act (BSA), which requires U.S. citizens and companies to report foreign income and foreign information to the IRS. This foreign information is typically reported by filing FinCEN Form 114 (otherwise known as the Foreign Bank Account Report, or “FBAR”), filing Form 8938 (Statement of Specified Foreign Financial Assets) under the Foreign Account Tax Compliance Act (FATCA), and meeting a multitude of other requirements for international taxpayers. Failure to report global income and omitting foreign information reporting can lead to civil or even criminal penalties, depending on whether such failure was “willful” or constituted tax fraud.
Irvine Criminal Tax Defense Lawyers
Criminal tax charges are generally filed when an audit or IRS criminal tax investigation reveals that a taxpayer has taken deliberate actions to evade his or her tax liabilities. Through sophisticated software – and collaboration with law enforcement, plus any number of state tax authorities – the IRS is increasingly capable of detecting and prosecuting tax fraud. Statistically, these cases have life altering negative outcomes for defendants, making skilled representation absolutely essential.
We understand how frightening it can be to find yourself or your spouse at the heart of a criminal tax investigation. Serving Irvine and Orange County, our criminal tax defense attorneys are committed to protecting your best interests while working to mitigate the civil and criminal penalties you face. We represent taxpayers who have exposure or may be charged with a wide array of misdemeanor and felony tax crimes, including:
- 26 U.S. Code § 7201 – Tax evasion
- 26 U.S. Code § 7203 – Willful failure to file a tax return or pay taxes
- 26 U.S. Code § 7206 – Filing a false return, tax preparer fraud
Contact Our Irvine Tax Offices
Whether you are a first-time homeowner with questions about the tax implications of mortgage interest, an online seller who needs guidance navigating California’s changing sales tax laws, a business owner with tax questions about a potential acquisition, or simply a concerned taxpayer who needs help preparing for an IRS audit, rely on the Tax Law Office of David W. Klasing to provide meticulous yet aggressive legal representation driven by over 20 years of tax & business experience.
Conveniently located in downtown Irvine CA our Orange County tax office serves taxpayers throughout the region. To set up a reduced-rate consultation, call our Irvine office at (949) 681-3502 or (800) 681-1295 or contact us online.